There are only 5 possible reasons for any business problem - Bar Rescue edition

Some folks who know me know that about a thousand years ago I spent a fair bit of time working in the Middle East - in Saudi Arabia to be precise. And these same folks also know that every one of my probably hundreds of stories I have told about my time in Saudi fall into only five major categories - it was really hot, we had to find gray market beer, I played rugby with a wild group of expats, we socialized with the (mostly Irish and Canadian) nurses from the local hospital, and sometimes you had to deal with some scary police/security people.

Every story, no matter how it starts, ends up in one of those five classifications. In fact, over the years I got tired of telling, (and people got tired of listening to) the old tales, and now I just list the five categories. The details of any one event or experience don't really matter all that much anyway. But the categories are still valid.

What made me think about this again was that over the long weekend I caught a few episodes of a marathon one of my favorite reality TV shows - Bar Rescue. If you are not familiar with the show, the basic premise is this: Veteran bar and hospitality consultant and expert Jon Taffer gets summoned to 'rescue' or help fix a bar or bar/restaurant that is failing, and possibly about to go out of business. 

Taffer will bring in a team of experts like a master mixologist, a chef, and designers and construction crews that together help to renovate the bar, motivate and train the owners and staffs, and redesign products and processes in hopes of giving the bar a new start and (hopefully), keeping it in business.

But what's the connection to 'Steve's boring Middle East stories?' you might be asking. 

Well it is this: Just like my dopey stories, every major problem facing the failing business owners in Bar Rescue falls into five categories as well. Sure there may be some subtle differences in specific situations, and most of these disaster bars suffer from multiple problems, but at their canter, they are mostly, remarkably, the same.

Every failing bar's problems fall into one of these five categories, (with some specific manifestations where I can think of some).

1. Lack of leadership from the bar owners - shows up in a few ways on the show, my favorite are the owners that simply get trashed drunk at the bar every night and have no idea what is really happening. Other times the owners are part-time or 'hobby' owners and have other businesses or jobs that keep them from paying enough attention to the failing bar.

2. Terrible hiring decisions - often this is the 'professional' bar manager that has no idea what he/she is doing. Also, lots of 'friends and family' hiring of people that are totally wrong for the jobs they are in or are taking advantage of their relationship with the owner to get away with doing substandard work.

3. Lack of attention to maintenance and upkeep - these are the bars with dead fruit-flies in the bottles, accumulated grease covering everything in the kitchen, and tubs of expired and/or rotting food in the walk-in. It is actually kind of shocking what some of these failing bars have allowed to let happen - at times it even threatens the health and safety of workers and customers.

4. Little or no understanding of the market/customers - time and time again Taffer and his team have to advise and educate the bar owners about the local neighborhood, the main drivers of potential traffic to the bar, and how the bar stacks up against the local competition. Typically in these situations, the bar owners have failed to recognize and adapt to changes - trends, preferences, and expectations of customers that are not the same as they once were back when the bar was more successful.

5. Failure to understand the economics - this one is pretty common the show and manifests itself in a few ways. Sometimes the owners really don't know how much money they are really losing or owe. Sometimes they don't have a good grasp on the financial drivers of their business, like knowing what food or drink items are most profitable. Or they are getting fleeced by staff (or even themselves) by giving away too many free rounds of drinks and not realizing how much that is hurting the business.

Just like my Saudi stories can be pretty easily classified, every failing bar's problems on Bar Rescue can fit into one of the above categories. And the the more interesting thing about Bar Rescue than my stories, is that these bar/business problems are pretty likely the same broad set of categories just about and business faces too.

Issues with leadership at the top. Bad hires, poorly trained staff, people in the wrong roles. Failing to keep track of the basic elements needed for any kind of success. Not keeping up with market and business condition changes. And finally, not watching and understanding the finances. Every problem (pretty much anyway), fits into one of these buckets.

Figure out in which one of these buckets that most of your business problems fit and you, like the Bar Rescue team, will know where to spend your time and energy making things right.

Competing not collaborating - check this before your next leadership retreat

Put enough smart people in the room and you are sure to work out a problem, devise a solution, or otherwise come up with a bunch of great ideas to cure whatever is the crisis du jour at your organization, right?

I mean, it seems like both common sense, and is backed up by most of our personal experiences that if you have a group of intelligent, motivated, and capable folks that at least some kind of solution or direction can be agreed upon. We have all been in these kinds of sessions and meetings - probably hundreds of times. It's not really all that complicated - get the right people together, let them collaborate, and good things generally happen. And usually the 'right' people are ones with some differing yet complementary skills, have a wide range of perspectives, and most of the time, have distinct power levels, either officially or unofficially in the organization. That proverbial mix of generals, captains, and soldiers if you get my drift.

But what happens if the room is filled with only generals - or in your case, a group of leaders who are more or less peers in the organization?

Well, according to a recent study from the University of California and covered in Quartz, it could be that in these 'leaders only' sessions collaboration gives way to competition.

From the Quartz piece:

Corporate boards, the US Congress, and global gatherings like the just-wrapped World Economic Forum in Davos, Switzerland, are all built on a simple theory of problem solving: Get enough smart and powerful people in a room and they’ll figure it out.

This may be misguided. The very traits that compel people toward leadership roles can be obstacles when it comes to collaboration. The result, according to a new study, is that high-powered individuals working in a group can be less creative and effective than a lower-wattage team.

Researchers from the Haas School of Business at the University of California, Berkeley, undertook an experiment with a group of healthcare executives on a leadership retreat. They broke them into groups, presented them with a list of fictional job candidates, and asked them to recommend one to their CEO. The discussions were recorded and evaluated by independent reviewers. 

The higher the concentration of high-ranking executives, the more a group struggled to complete the task. They competed for status, were less focused on the assignment, and tended to share less information with each other. Their collaboration skills had grown rusty with disuse.

There's more to the review in Quartz, and of course you can access the full paper here. But the big 'gotcha' from this kind of research is the reminder that just because you assemble the collective 'best and brightest' in the organization to work through some kind of tough challenge, it does not mean that you can assume everyone in the room won't have their competition and self-preservation antenna way, way up. 

And it is also interesting to note that the researchers found that while individuals power hampered the group's ability to collaborate effectively, it did not detract from any one individual's ability to reason cognitively.  Said differently, the group of leaders studied performed worse collectively that they all would have individually.

Competition at work is sometimes, maybe lots of times, a good thing. It can serve to raise the performance bar in an organization. But be careful what you wish for when you put too many powerful, competitive leaders in a room and expect them to work out the best decisions for the collective.

It's said that power corrupts. It might also be said that too much power in one room amps that power and competitive nature of these people so far that not much good will come from it.

Be careful out there.

Goal alignment sounds boring, but it can get you fired (NBA coaching edition)

My favorite sport is basketball, my favorite league is the NBA, and my favorite team is the New York Knicks.

Yesterday, my beloved Knicks relieved their head coach, Derek Fisher, of his duties about 2/3 of the way through his second season as head coach, with the Knicks currently possessing a 23-31 record, good (or bad) for 12th place in the NBA's Eastern Conference and about 5 games out of the 8th place, and the final playoff spot in the East.

There were various reasons for Knicks' team ownership and management to make the move to release Fisher, but I want to focus on one in particular that has been cited in many of the reports of Fisher's firing. It's a classic HR/Talent Management concept as well - dull sounding goal alignment - the basic, but as we will see overlooked in the Knicks' case, idea that organizational goals should be defined, communicated, and understood throughout and down the organization. Playoffs? Playoffs?

The goal in question that at least partially served as a catalyst for Fisher's demise: for the team to finish in the top 8 places in the Eastern Conference and make the NBA playoffs, one season (and a few new players) removed from last year's franchise worst 17- 65 record, and dead last finish in the East.

Here's an excerpt from one report on the firing on how management and Fisher's boss, Knick team President (and NBA coaching legend), Phil Jackson were disapponted in some recent comments from Fisher regarding the Knick's goal of reaching the playoffs this season:

More importantly, however, ESPN reports that Fisher wasn't developing as a coach quick enough for Knicks management. Some of that pressure may have been because the Knicks, for stretches, looked like a playoff team. Yet in the midst of a rough patch, Fisher, during an interview, said missing the playoffs wouldn't be a "disappointment."

"No. Disappointed in what?" Fisher said in an interview on ESPN radio. "We’re a developing team with a ton of new players. ... We have to be reasonable about who we are and where we are and accept what is and not get caught up in what we should be and allow other people to define what our success is."

Let's unpack that a little, exspecially for folks who don't follow the NBA as much as I do, (everyone).

At the start of the season the Knicks were incorporating several new players, their best player (Carmelo Anthony), was working his way back into form following an injury/surgey last year, and after only 17 wins a yar ago, probably could not have been reasonably expected to compete for a playoff berth this year. Jackson and Fisher, both veterans of the NBA, had to have known this, even if they said different things publicly.

But then a few things broke in the Knicks favor in the first half of the year. Anthony rebounded well from injury and was playing some good basketball, rookie Kristaps Porzingis was MUCH, MUCH better than anyone would have expected, and several new players made contributions to the team. The team was actually in contention for a playoff spot until their recent swoon - losing 9 of their last 10, culminating in the firing of Fisher yesterday.

So the organizational goal at the beginning of the season was probably something along the lines of 'Let's be better than last year, let's develop some new players, and let's figure out which players are not going to cut it.'

About half way in the season, due to some unexpected and better play, at least to Jackson and managment the goal shifted to 'Let's make the playoffs this season.'

But somehow Coach Fisher either didn't get the message, or, didn't buy in to the new goal as one that was reasonable, and one upon which his performance should be evaluated.

Against the first set of goals for the season, even at 23-31, Fisher's performance would have at least been 'acceptable.' The team is better than last year, rookie Porzingis has been a pleasant surprise, and (mostly) Fisher has found a way to be competitive game in and game out.

But against the revised or re-calibrated goal of making the playoffs this season? Well it seems almost certain after losing 9 of 10 that the Knicks are not going to achieve that. Fisher publicly stating that missing that goal 'would not be a disappointment' said to Knicks management that their was a disconnect between what the organization was working towards and what one of its key managers, (Fisher), had in mind. And so Fisher had to go.

It's ok for leaders to change course, set a new goal mid-stream, or ask even more from people who are performing well. But if those folks you are asking to do more and be better are not fully on board? Well then you have pretty different definitions of 'success' in the organization, and that ultimately will drive a wedge between leadership, management, and employees.

Note: I have probably watched 45 or so of the Knicks 54 games this season. I don't think they are a playoff team either.

Netflix ratings and what they might mean for your real-time feedback program

Everyone's favorite entertainment streaming platform/service Netfilix has been in the news plenty lately.

Their most recent earnings announcement was pretty fantastic, their revenues and reach are climbing steadily, and they continue to set the pace, tone, and standard for the modern entertainment experience. Just about everyone who is a Netflix subscriber loves it, and some think that Netflix (and some other services like Hulu and Amazon Prime), might one day ring the death bell for traditional broadcast networks and cable service providers.

Netflix is a case study example of a company that has managed growth, transition, technological change, and even making some strategic blunders to become one of the digital age's most interesting and influential companies. You might recall that Netflix made quite a stir in the HR/Talent Management space with their famous 'Culture Deck' a few years back. That document, which some have called the most important one in all of Silicon Valley, was seen and shared by thousands.

But why I was interested in posting about Netflix this week has nothing to do with their 'culture deck' or consumer cord cutting or the new season of Orange is the New Black. It is for another element of the Netflix approach I find really interesting and relevant to HR and talent management pros today - their approach and attitude about program ratings, the traditional way most TV programs have been judged, and their creators rewarded.

As consumers of TV we are all at least somewhat aware of ratings. They are reported on regularly. We all hear stories about TV's highest rated shows. And we know that when shows are cancelled, the usual reason is low ratings. In the traditional TV model, ratings are closely monitored, are made public and are widely reported on, and are the ultimate form of either validation and success, or rejection and failure. 

Want to know the ratings of any broadcast or cable TV show? That information is not that hard to find.

Want to know the ratings or even the total number of viewers for Netflix shows like Orange or House of Cards? Well, good luck finding out that information. Here is what Netflix thinks about ratings, from a recent piece on Business Insider:

Netflix thinks ratings are bad for television shows, and are a negative force on the talent that produces them.

Last week, executives from the likes of NBC and FX traded barbs with Netflix over ratings transparency.

FX CEO John Landgraf said it’s “ridiculous that we don’t have usage numbers on Netflix," while NBC’s Alan Wurtzel cited data from an outside research company that Netflix’s ratings weren’t all that impressive.

Netflix fired back, not just at NBC’s data, which content chief Ted Sarandos called "remarkably inaccurate," but at the very idea of ratings.

Netflix has always closely guarded its viewership data, so much so that many of its creators don’t even know how well their shows are doing. Tina Fey, who was the co-creator of the Netflix show “Unbreakable Kimmy Schmidt,” said she had no idea how many people were watching the show,according to the Wall Street Journal.

Now Netflix is saying this type of secrecy is actually good for shows. Sarandos said that instant ratings data turns TV into a weekly arms race between networks, and puts “a lot of creative pressure on talent,” Variety reports.

He asserted that the focus on ratings “has been remarkably negative in terms of its effect on shows.”

Quite a bit to take apart from that story but the key for me is not the 'old guard' sniping at Netflix from the NBC exec, but rather the Netflix point of view that a focus on ratings, particularly instant or 'real-time' ratings information is in fact harmful to the creative talent that it is increasingly engaging to produce its content.

It is kind of a remarkable point of view, and in the modern world of digital content delivery and availability of big data and powerful analytical tools, very counter-intuitive. Everything - marketing, politics, sports, and yes even HR and talent management is in an almost lock-step march towards compiling more data, gauging success or failure more discretely, and importantly - providing results and feedback to people much more often.

You can't swing a cat in a room of HR people today and not find at least someone, maybe a few someones, that are scrapping annual performance reviews and shifting towards some kind of alternative program for assessing and hopefully improving employee performance. While these new approaches differ at least some, they almost always have one thing in common - the encouragement of more frequent 'feedback' (if you like 'ratings'), given to employees in the course of a year.

Sure, this 'feedback' is meant to be less formal, more forward-looking, and less frightening than the annual performance review, but strip away the new terms we are using and underneath it all to many employees it is going to feel like you've replaced the dreaded annual performance review with anywhere from 12 to 52 'mini' performance reviews. And that is going to stink worse than any uncomfortable one-hour annual performance review meeting ever did.

The real thing to think about in all this is the effect that feedback/criticism/ratings will have on talented people, especially creative people that are increasingly the difference between organizational success and failure.

Netflix, the paragon of the modern company, culture, and talent engine has decided that less feedback (in form of program ratings), is actually a positive, and beneficial to the creative talent with which it engages, and which it needs to compete and succeed. It thinks for people to do their best, most creative work, they can't be constantly worried, on a week-to-week basis, with ratings and viewer numbers. Netflix is playing the long game.

So what does this mean for you, the HR and talent pro wrestling with these trends and changes in the way 'traditional' performance management has always been done?

It might mean this: Replacing traditional, annual performance reviews with a system that amounts to more frequent, if less formal, performance reviews might be exactly the wrong thing to do if you are trying to get the best, most creative results from your teams.

Or said differently, how many really, really talented people do you know that like to be told how they are doing all of the time?

Reacting to a sudden change in leadership

It's Monday night as I write this and of course just like you I am watching an NBA game and thinking about work, workplaces, and management. 

The game in question is the Spurs vs. Nets and why this particular game is interesting (aside from it involving the always fun to watch Spurs team), is that it is the first game for the Nets following the (kind of) sudden firing of their head coach Lionel Hollins and the re-assignment/demotion of their GM Billy King on Sunday. The Nets players were certainly aware of their 10-27 record and position as one of the league's worst teams, but they would not have had much if any advance warning of the imminent sacking of their coach.From the Nets better days

Fast forward about 36 hours and these Nets have to take the court against the Spurs, one of the NBA's elite franchises, and possessors of a 32-6 record and winners of 5 NBA titles in the last 20 or so years. But the Spurs success is not what matters for my point today, but rather how the Nets players, and by means of extension, any of us react to a sudden change in our own organizational leadership.

The way I see it you, me, the guys playing for the Nets can react one of three possible ways to the news that the boss, the big boss, or the really, really big boss is suddenly gone, and there is a little bit of uncertainty about what is going to happen next.

1. Panic - even though I advised yesterday that in most cases that it is probably too late to panic, some folks inevitably will. In the Nets example, the player's agent will immediately start working the phones, looking for a potential new team for the player and leak stories to the media that the former coach never really gave the player a fair chance or used him in a way that best exploited his talents. For us 'normals', that means an instant LinkedIn profile update and bending the ear of everyone who will listen that the former leader 'never liked me' or 'always had it in for me.' 

2. Enthusiasm - Some players on the Nets will see the change in leadership as a way to get a fresh start, and to try and impress the new leaders with extra effort and diligence to their tasks. These guys are probably ones who felt like for whatever reason they were not able to be their best selves under the old regime. They will in the short term work extra hard, and spend more time talking about the potentially bright future instead of focusing on the disappointments of the past. This reaction is usual reserved for younger players who are in the early stage of their careers and don't have much time or emotional commitment with the outgoing leadership. 

3. Insubordination - The worst of all three potential reactions, and the one that can possibly cause lingering damage, is outright insubordination. Veteran players, especially ones with long-term, guaranteed contracts could consider themselves pretty insulated from any negative consequences and out and out work against the new leadership. This is particularly dangerous because very often the new leaders need the support of the organization's most senior and influential players. But these players, and the similarly long-tenured staff at any organization, often have outsized levels of power inside the group, and any new leader is going to have to find some common ground with them in order to try and fix what needs fixing. 

When there is a sudden, and possible unexpected change in leadership everyone in the organization immediately begins to evaluate their own position, their place in the organization, and the health of the organization overall.

If you are a role player or a favorite of the old regime, it may indeed be time to start working your network and calling in some favors, as your days may be numbered as well. But if you were a solid worker who always thought you could do more but were never given the chance it could be your time to try and step up and fill in some of the leadership and talent vacuum.

If you are the new leader suddenly thrust into power, you'd do well to assess the folks on the team and sort out what group they seem to be falling in with before too long. Some will be with you, some will be against you, and some will just be a mess. It is good to know who is who. 

Either way, these kinds of quick changes in leadership force us to be at least somewhat honest about our own place in the organization, and perhaps more importantly, force us to consider if we have a future with said organization as well. 

Complacency can be a real bastard. It sometimes takes some dramatic change to wake us up.