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Worry all you want about China and its future economic and political impact, but consider this:
Already, China is …
• In Top 3 nations for investment in virtual reality, autonomous vehicles, 3-D printing, robotics, drones and artificial intelligence.
• The world’s largest e-commerce market, with 40% of value of transactions.
• In mobile payments, has 11 times the transaction value of the U.S.
• In 2016, the three huge internet giants in China accounted for 42% of all venture capital investment, compared to the 5% total of Amazon, Facebook, Google and Netflix. They also made 35 overseas deals, compared with 20 by the US biggies.
Source: McKinsey Global Institute
Contrast this performance with the newly-announced government desire to control more and more of what's happening. Indeed, in case you missed it, the government intends to begin "rating" each individual on the level of patriotism he/she shows ... formally including everyone beginning in 2020 ... based on participation in various kinds of government-suggested activities.
This past week, I attended the Manufacturing First Expo sponsored by the N.E.W. Manufacturers Alliance at the KI Center, which had about 100+ exhibitors … and attended several of their presentations/workshops. Among my takeaways:
• Lindquist Machine Co., a 110-employee equipment manufacturer. CEO Mark Kaiser, with consultant Lee Bouche, is in a multi-year effort to create a truly integrated Intentional Culture. The major elements are in, and 2017 is dedicated to getting every employee to understand how to conduct “Crucial Conversations,” using the Patterson/Grenny-authored book of the same name. Many plant floor employees, and even some leaders, aren’t readers or communicators, so it’s sometimes a challenge, but they are persisting. Think of the cultural/morale/performance impact when a entire workforce is being trained in practical communication techniques!
• Some great quotes and points, cited by Lee Bouche:
Employees’ Basic Needs: Respect, Learning, Challenge and Inclusion!
Gruenter/Whitaker: “The culture of any organization is shaped by the worst behavior the leader is willing to tolerate.”
David Couper “Employees work harder for Cause than for Cash!” Pay and benefits don’t make it anymore; they’re threshold.
From the book, Never By Chance, Aligning People and Strategy thru Intentional Leadership: “One of the most important obligations as a leader is to create a compelling vision for the company and then create a culture to achieve that vision.”
• From Melinda Morella-Olson, Imaginasium, on how to reach out to employees:
Have a Careers Page on your website, as Plexus does.
Look at Manitowoc Co.’s “Employer Brand” approach on its website.
• Final Takeaways proposed by the three panelists:
Melinda Morella-Olson: Get a feeler your Employees’ Experience. What’s driving them to come to work every day?
Steve Hirt, Optima: De-Select from your choices. Don’t keep trying to do more just because you can.
Fred Johnson, InitiativeOne: YOU drive the conflict. Have the conversation, but in a spirit of respect and kindness. Don’t let the conflict drive you, creating discomfort.
• NOVO: Physician-Led HealthCare. I’ve seen their signs, but wondered who they are and what they do. Because sick care costs and delivery challenges are such a problem these days, I attended … and founder Kurt Kubiak explained what they’re doing. They began in 2015, after he spent six years with Plexus’ world-class manufacturing (and 6 sigma mentality) and then at Fox Valley Orthopedics. His mission: To speed up the trend towards “price bundling” while providing a more satisfactory patient experience … primarily for self-insured companies. Today, he has bundled price arrangements with specialists in Cardiology, Orthopedics, Hematology/Oncology, and some in primary care and rehab. They develop deals at much lower total costs (30% lower he says) than state averages.
Of interest: To invent employees to use their doctors, they provide cash payments (often $2,000) to the employees … and even pay travel from remoter areas.
It’s a great idea, and a struggle to get inroads … because the major health systems won’t use them and are much slower to embrace the bundled pricing ideas, though they’re making progress.
They also do Workers’ Comp work.
How to make inroads into fully-insured companies, hoping the insurance companies will recognize the cheaper cost structure and reward with lower premiums … or at least lower premium increases? And how would you know?
Ben Fauske, an O/D specialist here in Green Bay, provided these insights at a recent Servant Leadership workshop sponsored by Prophit Marketing and Festival Foods:
- Problem with connecting grandiose mission to what I do: “I save lives … one folded carton at a time!”
- “They are CAVE people … C.A.V.E. … Citizens Against Virtually Everything!”
- Example of a great culture: My family and I were at Disneyland, on a shuttle bus, an the driver was getting exasperated at riders not sitting down, as safety required. Finally, he broke from his “role” and yelled at offenders. When we got off the shuttle, he got off with us. “I apologize. I should not have done that. It was wrong, and I should be held accountable for it. Here is my card and my manager’s card. I want you to know that whatever you write him about what I did, I will verify and I will accept his penalty.”
- He asked attendees, “Why was the worst team you ever worked on the worst?” Responses: Boss had his favorites; too much ego (too much “I”); micromanaging; saying things that were patently untrue; promising things that were never delivered … and a power struggle between team members.
- What got him into O/D work? “After college, I worked for eight bad cultures in eight straight years.” (Wonder where his ninth was?)
Fred Johnson, CEO of Initiative One in Green Bay, at one of his Last Friday seminars, entitled “Soul Leadership” ...
- “Emotional Intelligence is the main thing these days for a leader … and I think there’s something just beyond that, 'Soul Leadership’. It’s where you actually ‘love” the people you work with. Seattle Seahawks coach Pete Carroll, when his teams were at their peak effectiveness, said it’s because they love each other. You are creating an environment where people actually feel loved.”
Some supporting comments:
- After the Great Recession, the percentage of people wanting to leave their companies was at an all-time high, not because of the layoffs … people expected that. It was because during the aftermath, managers/leaders didn’t treat them as adults … not keeping them informed of what the situations were (miserable as they were), “coddling” them, being paternalistic. They felt like “assets” used to protect the bottom-line, not treated as a responsible, reliable, trusted adult team member.
- Millennials, we believe, want a “flow” between their personal and work lives … high inclusion, high relationships … which builds Trust and Commitment. It’s bad when the work culture is such that it is separated from one’s personal life.
- Leadership Development today starts with creating a positive self-awareness that ultimately yields Confidence … confidence that leading the search, asking the questions won’t diminish his/her influence and respect. Getting out of the organization’s way so they can help solve the problems, deal with the challenges.
- Every process can be derailed if people who use/manage it don’t feel valued as a person. As the American Airlines CEO said recently after the United Airlines debacle, “Never let process trump people.”
- Good leaders don’t get “burned out.” They become comfortable with being uncomfortable … and solving the dilemmas that create that discomfort.
- Perfection kills you as a leader. It’s an addiction to order … which can never be made perfect.
From last month’s Harvard Business Review: The CEO Genome Project, starting by analyzing 2,000 CEOs, and in detail 930 of them, on:
What does make CEOs successful? After analyzing all of their data, the researchers found that roughly half of the candidates earning an overall 'A' rating in their database, when evaluated for a CEO job, had distinguished themselves in more than one of four management traits. (Only five percent of the weakest performers, meanwhile, had done the same.) The four were: reaching out to stakeholders; being highly adaptable to change; being reliable and predictable rather than showing exceptional, and perhaps not repeatable, performance; and making fast decisions with conviction, if not necessarily perfect ones.
PS: The study also found that more introverts than extroverts tended to run successful organizations, but barely more.
Then, the in this month’s HBR: Four Characteristics of Successful Performance by CEOs
1. Deciding with Speed and Conviction
2. Engaging for Impact
3. Adapting Proactively
4. Delivering Reliably
It gets confusing.
Chief Executive Magazine just ranked Wisconsin in the Top Ten, after continual progress in recent years. That means we have most of the right policies/programs/mechanisms in place … but doesn’t mean we will have great job growth. That depends on individual entrepreneurs, and Wisconsin by-and-large isn’t a highly entrepreneurial state.
However, our state business tax rate of a flat 7.9% is still one of the highest.
Little known: Our rate of workforce participation at 69% is one of the highest in the country; average is 62%.
On Business Taxation
There is much ado about lowering the Federal business tax rate from 35% to either 15% or 20% … a give-away to the wealthy 1% or less or more. So, what would businesses do with that extra 15% or 20% of profits? Nothing? No. They invest it in further job creation … R&D, commercial development and testing, investing in new equipment and space, hiring and training, marketing, selling and producing. Private businesses are the Golden Goose. What they do is create the jobs with incomes that can be taxed and buy property that can be assessed. So, why not a business tax rate of 0%! It’s been proposed in some drafts. We should consider it. Then, the several trillions of dollars held in foreign countries can be repatriated for investment here … and the practice of producing in the U.S. but selling from countries with lower tax rates can be stymied. Would not the additional individual incomes and property values create taxation that overwhelms the business tax loss … as well as drive further growth? What’s so hard?
$15 Minimum Wage
San Francisco, which adopted the $15 Minimum Wage in 2004, now has a documented 60 restaurants which have closed for reasons primarily attributable to their higher cost structure. As one person said, “You can only charge so much for a tamale.” More and more, government heads are realizing that maintaining a jobs base is more important from an economic development standpoint.
It has been argued, and I agree, that if society wants a family to have a minimum income, then do it through the regular tax base rather than through making an employer less competitive. One vehicle: The Earned Income Credit.
On Phil Hendrickson
Yesterday, I attended the memorial service for Phil Hendrickson, who died at 97 back on March 7. He was a humanitarian, philanthropist, investor, counselor, and a member of TEC III for many years (almost a founding member in 1967) while leading Krueger Furniture (later KI).
The service included lots of stories about things he said regarding how to live one’s life, but this one resonates: “There is always enough to go around, to share. You always have enough to share with, to reward those who helped you succeed.” He said this not only about “giving back,” but how you treat/reward your employees who make your organization successful.
Another one: “Phil, what’s the best advice you ever got?” “Well, to marry Betsy, of course!” (Right answer; they were married for 65 years) “Phil, who gave you that advice?” “Betsy.”
Quotable Quotes from recent TEC speaker Dr. Paul Voss, Georgia State University … side comments during his recent presentation to my TEC members on Culture
A point he made:
-- Culture is HOW you do things that make life worthwhile.
-- HOW We DO ANYTHING Means Everything. Success is not in the What, but the HOW!
Quotes
• “He’s got more degrees than a thermometer.”
• Unknown: “Man gave us Beer, but God gave us Wine!”
• Misguided Maxim: “You can be anything you want to be, if you try hard enough.” “No, you probably can’t be anything you want to be, but you can be a lot more of who you already are!”
• The first marriage of a man adds five years to his life. For a woman, zero.
Our Baggage
Recently, I listened to a school superintendent tell this story:
He asked a long-time teacher with an excellent reputation to visit with him about a possible change in teaching approach based on new research.
The teacher came, bringing a teachers union rep with her.
As he explained the new research to get her reaction, she began to cry.
As he probed as to why, two reasons emerged: First, she felt she was being told that her 15-year-approach to teaching was being discredited, and second, that her worth as a person was thereby diminished.
She didn’t take the knowledge for how he thought he was offering it … as new research, new approaches that could be tested.
His point: As we undertake change based on new experiences, the change will meet barriers deep and varied within the people we are asking to behave differently. His list: Fear of failure, vision of self-worth, need for praise, drive for perfection, and others. Her self-identity was rooted in what she did, how she taught. Perhaps a better approach, he said: Appreciate her for who she is, a committed teacher always looking for improved ways to provide a learning environment. And then suggest the prevalence of new information to consider about technique.
The story was part of a broader presentation sponsored monthly by Fred Johnson and his InitiativeOne organization. Other points made:
By Fred: “From Baldrige days, less than 1% of organizations know and can articulate their Purpose. But when they do, they engage employes more easily and consistently in living their values that move the organization towards that Purpose.” Do you know and articulate your Purpose to your organization … constantly!
Consider: Ask a group of employees what they think your organization’s Purpose is, without hearing each other. Then, compare what they say. Betting each definition is different.
By another speaker: “People are always scanning their work situations to see if they are ‘safe.’ Do your group norms provide an environment where each person is ‘safe’?”
Some recommended books that drive the school system’s own training:
• Connors/Smith’s The Oz Principle and How Did That Happen.
• Dieken’s Talk Less, Say More: Three Habits to Influence Others and Change Your Life Forever.
Wilson Jones, Oshkosh Corp. CEO
He heads a $6 billion, 15,000 employee, 70-country behemoth best known for providing high durability trucks to our military, when actually it’s biggest division, $4 billion, provides cranes and other “access” equipment worldwide … in addition to fire and garbage trucks.
He took over as CEO in January 2016, returning to an organization he served for over a decade before. In his presentation to St. Norbert’s CEO Breakfast & Strategy group, he illustrated that he understands that engaging his workforce takes precedence over any other strategic initiative.
“When I took over, I needed our leadership team to be all about ‘caring leadership,’ and not all of us were. Now, we are.” He said he undertook three initiatives with that team:
First, to lead a culture of Trust and Respect for every employee, which starts with listening.
Second, that we will be Collaborative, not competitive.
Third, that we will Gain Alignment.
“People watch the leadership team, and if we’re not doing it, neither will they. And if we are, we have a better chance.”
His second initiative was to make embracing the Oshkosh Mission paramount. “Everyone needs to know our Why.”
And Third, to install companywide initiatives that “Engage, Develop and Connect” everyone, based on HR studies and assessments, and feedback from Oshkosh employees.
This third initiative has resulted in programs like these:
• Engage: Getting teams to develop programs and awareness of preserving safe working environments, which has cut safety accidents and costs by half. Also, to institute schedule flexibility … “what works for people within each work team.” Might people take undue advantage of that? “If you’re worried about it, they probably will.”
• Develop: He cited a study in 2015 by Deloitte that opined Career Devleopment is more important to employees than compensation, benefits and good work.
He cited guidelines that career development initiatives should be 10% educational (reading, workshops, conferences), 20% exposure (to what works), and 70% experiential (try something, make mistakes, learn). He cited that 65% of employees are taking advantage of training through YOU/Your Oshkosh University.
• Connect: People want to be connected to Each Other, to Customers, and to the Community. Managers develop approaches to create those exposures, and are reviewed and rated on how well they do this for their direct reports.
Great Quote as part of Jones’ presentation, by Mark Twain:
“The two most important days in your life are the day you were born, and the day you find out Why!”
So, why can't people oriented to “liberal” ideas and those oriented to “conservative” ideas respect and talk to each other? Why the “demonizing” that has occurred in the national discourse? Behavioral scholar Jonathan Haidt at the University of Virginia wrote a book, The Righteous Mind, four years ago that provides interesting insights into this dilemma. His views are also encapsulated in a YouTube interview with Bill Moyers at https://vimeo.com/36128360. . His research says that when we look at such emotional topics as political and religious issues that we are intuitively evaluating the topic from a six-point moral foundations framework: Care, Liberty, Fairness, Loyalty, Authority and Sanctity. On a ten-point scale, he said, on average, liberal viewpoints bring the following weights to the evaluation: Care (10), Liberty (7), Fairness (5), Loyalty (2), Authority (2) and Sanctity (2). People with conservative viewpoints generally bring these weights: Care (7), Liberty (7), Fairness (7), Loyalty (7), Authority (7) and Sanctity (7). This is on average. Every individual, on specific issues, can elevate certain of these, and the internal complexity of applying them to real situations increases with age/experience. (Some ask where is the moral element of Equity, so important today. Haidt maintains it is within the Care and Fairness elements; when they get out of whack, it is called inequity.)
It appears most often in Religion and Politics because both involve issues involved with aspiring to very high ideals, to greatness … very emotional … and therefore blind to other views ... his explanation of what is going on today. The only resolution Haidt provides is to sit back and listen to the other views, and consider them in light of the six points. Understand that the other person is not crazy or evil. Where is the person putting emphasis? It takes the personality out of it, and interjects more analysis and consideration.
Among his specific points:• While he started out as a liberal, Haidt now feels that a more conservative view is more in touch with human nature … the need for structure, families, groups, memberships, rivalries (unless they cross the threshold into maniacism). It’s difficult to run an enduring society without Loyalty, Authority and Sanctity, which are given low consideration by liberals because of their heavy emphasis on Caring.• Those ascribed with liberal views, he feels, are more in touch with seeing how society goes awry, where the social system breaks down. Conservatives see more the consequences when the system breaks down.• Capitalism: Yes, we wouldn’t have all that we have without capitalism. It allows the lifestyles that we have. But it has problems that need to be discussed in a nuanced fashion but aren’t. Not by either liberals or conservatives. What is the needed tweaking? The discussion could be couched in the terms of the six points and acknowledging the other’s “direction.” Nuance is important. Staying away from extremes and generalities is critical.Two Big ProblemsHaidt says there are two great problems with today’s discourse: Demonization, and Corruption! Demonization is done by people at the extremes, and makes us weaker. People on the extremes are typically more passionate, less open, frequently very moneyed. They decide elections. Corruption is buying favors for special interests. It’s a common charge that Congress is bought-and-paid-for, responsive to the interests of those who contribute to them.
How to offset these?
Another Haidt Insight:• In our own, cohesive social worlds, we aren’t really attuned to finding the truth, but rather in being part of a complicated social network that maintains our alliances and reputation. We will actually turn hypocrite to make sure our “alliances” think well of and say good things about us.
Ashley Prange, 33, is a millennial who is building Au Naturale Cosmetics here in Green Bay as a refugee from the Nuclear Regulatory Commission in DC. She couldn’t stand it there, and now she’s trying to build a company where people like her can thrive.
As a Millennial who manages and leads millennials, she made these points to a St. Norbert CEO Breakfast & Strategy audience this morning:
• Hey, as Millennials, we have ideas and we’re not bashful about sharing them. We want constant communication about what’s going on. We want an efficient workplace and want to be appreciated. Also, because we work strange hours (be flexible), let’s make it fun, too. And by the way, I’m always looking for a more interesting job.
• One attendee said at his company, an employee can ask for feedback on a project and receive it by tweets immediately. You need to foster/allow full use of technology.
• Ashley said she’s too busy to listen to voice mails, and doesn’t look at emails regularly. She responds to tweets on what she’s working on now.
• On lifestyle: What Boomers did is all being postponed … marriage, kids, houses. There’s too much to do. We want to travel, too. And we don’t have much money, and have lots of college debt. We’re very educated.
• We like workplaces that are very mentally challenging. Don’t be afraid to give us a big assignment; we’ll work hard to understand it and be successful.
• On Millennials as consumers: We care about the ethics behind the products we plan to buy … and will pay more for something that’s environmentally responsible, organic, etc., even though we don’t have much money. Make us feel our ethics are being met. Too, try to create a relationship with us. Have an interactive website … create ways for us to provide feedback to you. Respond to us. Create a dialogue. We want to be loyal, and this does it.
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