Perfect Labor Storm 2.0

Survey Says: Serious Gap In Leadership Effectiveness

A serious gap in leadership effectiveness exists, according to a just released survey by Aon Hewitt. 

While participants from the 1,328 employers nationwide found that leaders play a vital role in meeting business goals (56 percent), meeting profitability targets (56 percent), delivering service (56 percent) and retaining talent (44 percent), only 12 percent of respondents say their leaders are extremely effective at meeting business goals. What’s more, just 14 percent believe their leaders are extremely effective at meeting profitability targets, 17 percent say the same holds true for delivering service and 7 percent believe their leaders are extremely effective at retaining talent.

Since mismanagement and misappropriation of managers and leaders seems to be such a common event at businesses today, it seems like an opportune time to revisit the difference between managers and leaders.
 
Leadership comes with the territory when you own your own business or receive a title. But being in a leadership position does not necessarily make you a leader. Leadership experts say leaders vs. managers are two very different characters, even though most small-business owners consider them the same.

The Peter Principle states that "in a hierarchy every employee tends to rise to his level of incompetence", meaning that employees tend to be promoted until they reach a position at which they cannot work competently. It was formulated by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle. The principle holds that within an organization, members are promoted so long as they work competently. Eventually they are promoted to a position, at which they are no longer competent, and there they remain, being unable to earn further promotions, often times mucking things up. Although The Peter Principle is often referred to in jest, there is often truth in humor.

More often than not we see employees rising through the ranks from entry-level employee to management, then management to leadership roles. These titles are often rewards for extra effort or loyalty along with success in the current position.  But none of these achievements justifies promotion to roles that these employees are ill-equipped to undertake.

What then are the fundamental differences between leaders and managers?

According to Warren Bennis, one of my favorite authorities on leadership, “leaders are people who do the right thing; managers are people who do things right.”  In that vein, a leader always has the full vision in his sights and inspires the organization to follow.  Leaders set the com¬pany strategy.  A leader sets the exam¬ple of how to work and live. But most importantly, an effective leader is concerned beyond the boundaries of self, and directs his or her energy to the very core of the business – its team of employees.  Bennis outlines four themes that generate empowerment, camaraderie, and a sense of belonging. They are:

1. People feel significant.
2. Learning and competence matter.
3. People feel part of the larger community.
4. Work is exciting.

An equally important characteristic according to Ken Blanchard, best-selling author of The Leader Within, is leaders “get honest, unfiltered feedback about how you are doing from the people you lead.'' He further states, ''You cannot effectively lead if you do not know your own values.''

"Managing," on the other hand, implies structure, control, rules, deadlines and efficiency, says Blanchard. A manager will dictate expectations and can some¬times push, some¬times pull and some-times a mix¬ture of both. Managers must have an understanding of the leader’s vision and share the commitment to seek it.

That is not to say that a manager should not exhibit some leadership qualities and to learn skills that define a leader. If managers merely focus on the activities of the followers and fail to engage them in a purpose, that manager will most likely lose the interest of his followers. Loss of interest grows into loss of motivation which can lead to lower productivity.

Ultimately, the term manager typifies the more structured, controlled, analytical, orderly, and rule-oriented end of the continuum, while the term leader denotes a more experimental, visionary,  flexible, and impassioned side. Managers and leaders are not the same. They think differently internally, and behave differently externally.

Survey: DId You Recognize Your Boss on National Boss Day?

Saturday was National Boss Day.  I found it odd that National Boss Day was celebrated on a weekend.  Certainly a lot of people work on the weekends but even more don’t.  And while many stores are open, production lines are running, and transportation is flowing, a lot of bosses aren’t working during a weekend shift. Isn’t that the equivalent of throwing a party and not inviting the guest?

Even more surprising to me was how few people even knew it was National Boss Day.  In the past it seemed like the day received a lot more attention.  I remember when stores prominently pitched purchasing “boss” cards and gifts and business organizations promoted the day in their newsletters and email alerts.  I belong to numerous business organizations including four Chambers of Commerce. I receive dozens of emails weekly announcing events, news, and opportunities.  But not a single one – not one- mentioned National Boss Day in any of their publications during the week leading up to October 16.  That is nearly 180 degrees from what happens when other recognition are promoted such as Administrative Professionals Week or National Nurses Week.

I realize that many of you are thinking, “who cares.”  For some, recognition one week a year after being abused, berated, and mismanaged by a bad boss for the remaining 51 weeks is demeaning and meaningless. Others might relish that fleeting moment in the spotlight just like a child welcomes a band-aid on a gaping wound because it makes him feel better.

So…I’m asking for your help.  Please complete the following survey. It takes seconds…no fooling!  Let us know if you recognized your boss on National Boss Day or if you are a boss, were you recognized?  Click here to complete the survey.  I’ll release the results on or before November 1.

Happy Boss Day! Are You A Good Boss...or A Bad One?

Are you a good boss or a bad boss?

Saturday is National Boss Day and I was interviewed earlier this week about what makes a good boss….and how can employees “manage” their bad boss better. The staff writer, Cindy Stauffer, did an amazing job listening to what I said and writing what I hope is helpful advice for bosses and employees alike.

The article follows and can be viewed at LancasterOnline.com

Depending on your job, you might be smiling.

Or groaning.

Dr. Ira Wolfe understands.

He knows what makes a good boss. In fact, the 59-year-old makes his living giving advice to bosses, trying to help them make their small businesses better.

Wolfe is the president of Success Performance Solutions, which operates out of Lancaster, as well as Maryland and Virginia.

Once a New Holland dentist, now a business guru, Wolfe has been both an employee and a boss.

The son of parents who owned a clothing store in Pennsylvania's coal regions, Wolfe grew up in a household where things such as sales and marketing were regular discussion topics.

Wolfe went into dentistry, moving to Lancaster County to take a position as a dentist with Welsh Mountain Medical & Dental Center and then opening up his own practice in New Holland.

As the years went on, he found himself drawn back to his family roots. He discovered that he most enjoyed the business side of dentistry: the marketing, the employee management, the building of his practice. He started speaking to professional dental groups and, in 1995, he left his practice to focus on business consulting.

In his experiences working with businesses, he said, most bad bosses don't want to be bad.

"Most people in management," he said, "don't wake up in the morning and say, 'What can I do today to make my employee's life miserable?'

"They want the day to go well. If employees are having a bad day, they have a bad day, too."

More often, he said, a bad boss is a person who intends to lead well but doesn't know how.

In this slim economy, they might have risen to their position because of the combination of departments, early retirements or being the cheapest person available for the job.

Now they are in the leader's seat, and they are struggling.

"A lot of their actions are covering up for what they feel they lack," he said.

What can employees do?

"Sometimes it's just sitting down and saying, 'What can I do to make your job better?' " Wolfe said.

If you are toiling under a struggling boss, that might be the last thing you want to hear, Wolfe acknowledged. After all, why is it your responsibility to help your boss be better?

Because there is something in it for you, he said.

By talking to your boss, you might make your life easier by improving his or her management style, which Wolfe said tends to reflect the way the boss personally would want to be managed.

Someone who doesn't like to be micromanaged will not provide a lot of feedback to others, for example. Someone who wants frequent performance updates himself will want to check in often with employees.

Employees need to work with their boss, setting up a schedule of regular check-ins for the hovering manager or regular feedback from the taciturn manager.

And though it might be difficult, employees also should speak up when they have problems with a boss who is unpredictable or moody, Wolfe said.

"Talk to them. Say, 'When I come into work, I don't know how to approach you. It doesn't help my performance. It doesn't help me. Sometimes I need to talk to you, but you are in a bad mood,' " he urged.

"If you can work on communication, 50 percent of the problems go away," he said. "Fifty percent of problems are superficial communication issues."

Of course, there are bosses who are simply toxic: dishonest, immoral, angry, impossible.

For those situations, Wolfe said, there are no easy solutions.

"Put up with them until you can find a better opportunity," he said. "You can't change everybody. In those situations, it's about making the best out of it. Fortunately, they are few and far between."

"Most employers," he said, "really want people to have a good day. Someone just has to step up and initiate a conversation and see if it will help."

 

Job Cutting, Slow Hiring - Is It A Solution or An Excuse?

Aggressively cutting workers, which is one of a company's largest expenses, allows a business to return very quickly to profitability. So it makes sense that job cutting was so prevalent for the past few three years.

But now that the darkest throes of the recession have passed, the great American "jobs machine," that used to be the envy of the world, is sputtering. Today when one compares the U.S. unemployment situation with that of other big industrial countries, the U.S. is now the highest in the world. Just 10 years ago, in 2000, the United States had the second-lowest unemployment rate in the world. Only the Netherlands was lower.

   

The 2000-2009 numbers reflect annual data. The numbers for 2010 are the latest monthly numbers available for each country.
Source: Bureau of Labor Statistics  Image Source: NPR

There were some glimmers of hope in Friday’s unemployment report — namely that private businesses added 67,000 jobs. But it's still a weak performance. The unemployment rate rose another tenth of a percentage point to 9.6 percent. The U.S. needs more than twice that many new jobs each month to start bringing down the unemployment rate. As a result, it's likely to remain very high for a long time.

Many companies blame the massive cuts in jobs and delays in hiring on survival.  That might be true, especially if a position that I’ve advocated for some time is valid – that many companies retained mediocre performing and poor skilled employees prior to the recession because they didn’t have the motivation to train them or the guts to withstand the political wrath if they let them go. It was simply easier to pass on the costs of waste and incompetence to the consumer.  The recession provided more than ample cover to do what should have been done a decade or two earlier – if a process, machine, or employee doesn’t add value to the organization, why keep paying for it?

It's questionable, however, whether this strategy is a winner in the long term.  There’s significant evidence that while firms get quick profits shortly after big job cuts, they often don't perform very well in later years after the economy has recovered. Layoffs make sense when they're a proactive effort to deal with a new economic environment. But if a company is continuing to cut jobs in order to meet profit targets, it could be a sign of serious problems with its business model.

On the other hand, while it might be un-American to encourage U.S. employers to focus on profitability through outsourcing and technology, it certainly seems preferable to re-hiring employees who lack the necessary skills, who have a sense of entitlement, and display a bad attitude simply because the unemployment rate is too high.

A short term solution of restoring jobs to the economy seems unlikely. For now, employers seem more content on buying new machines, instead of hiring new workers, to boost production.  I can’t say that I blame them. 

Test Your Assumptions: Past Success May Lead To Dumb Mistakes

Mark Hurd, the golden boy CEO of the Hewlett-Packard turnaround was forced to resign recently amid a sexual harassment scandal. As a colleague of mine described in a recent post on his blog, “Hurd was a no-nonsense, low key, under the covers (no pun intended) manager who engineered a remarkable turnaround for HP.”  What went wrong?

This announcement happened coincidently just one day after I interviewed thought leader Peter Winick about “Who Do Smart People Make Dumb Mistakes?”  Our discussion wasn’t focused on the irrational tryst seeking decisions of Hurd, Tiger Woods, John Edwards, and Eliot Spitzer or the career-sabotaging behavior of superstar ball players like Michal Vick, Plaxico Burress, and the shocking list of characters we read about daily. Our conversation was more targeted, focusing more on business than personal decisions – although you’ve got to wonder if you can separate the two.

One of the reasons Winick sees smart business people making bad decisions is that “they fail to question their assumptions.”   That’s particularly true for managers with years of experience and a successful track record.  But that example only highlights the need for every leader to ask himself if what worked in the past will work in the future.  In other words, is the assumption that past performance is a good indicator of future success wrong?  Winick believes that many decisions that work out badly can be traced to a lack of questioning:  what were the circumstances that surrounded success in the past?  “Does the history surrounding the success really matter…or can it be a detriment?” asks Winick. “We don’t ask that question enough.”

One example given by Winick is the fate of a manager who climbed the career ladder in a locally-based physical plant gets promoted to manager of a globally dispersed business with a virtual workforce.  “If all you know is working in an office peering over your reports’ shoulders, history may not be repeated when forced to manage people thousands of miles away.”

Another business example we discussed was the failure of government bureaucrats and hospital administrators to consider the costs associated with implementing electronic health records.  The assumption is that electronic records will improve portability, continuity of care, and minimize mistakes. Those potential outcomes are all true.  However, the actual process of entering the data alters the way most health care providers have learned to practice medicine.  The cost and challenges presented by converting from a paper to electronic records was and still is woefully underestimated.   The assumption that doctors and other providers will simply begin tapping on a keypad instead of pushing a pen on paper without affecting the way care is delivered is naïve.  Unfortunately much of the success of the recently passed health care reform rests on a successful conversion to electronic medical records. 

Members of a Vistage LinkedIn group are currently discussing what they did differently during the past year to change the way they did business to recover from the recession.  Several common themes evolved, mostly using words like “retrenchment,” “refocus,” and “going back to our core competence.” While many Vistage and non-Vistage members seem to be enjoying the fruits of their labor, looking inward for strength is not a universal panacea.  In fact, for quite a few companies, refocusing on their core competence of old was just comfort food.   New strategy was just a mental exercise.  Why?  Unfortunately for many businesses, the assumption that what worked in the past will work in the future is based on too much hope and not enough reality.

Winick suggests that leaders need to quickly pass through their early stages of grieving for the loss of business and seeing “their 401Ks shrink to 101Ks.”  They need to get beyond denial and anger, he says.

Unfortunately Winick sees many smart and successful people currently trapped in the beginning stage of grief.  Winick is completely flabbergasted when he hears business owners and executives say “flat is the new growth.”  When he hears business people accepting their current state of affairs as fate, he cringes.  “Flat is not the new growth,” he says empathetically. “Growth is still growth. Somewhere there are 2 guys sitting in a garage like the two Google boys.  In 3 to 5 years, we’ll see a new generation of smart guys who really took advantage of opportunity during the recession. Once you get to a place of acceptance, you can see the new world and now ask: how am I going to win?”

Winick also doesn’t encourage executives and owners to throw out everything.  He recommends just taking inventory and testing assumptions.  The first thing Winick suggests small business owners do is realize that, for many, their business is an extension of their personality. The personality of the owner in the past became the default culture of the organization.  If that’s the case, changing the direction of the business may now require shifting the mindset of the owner.

Heed the advice of Peter Winick. Test assumptions.  That’s what successful thought leaders do.  Have you tested yours today?

Listen to the full interview with Peter Winick on Workforce Trends Blog Talk Radio.

Advice for CEOs: Work Your Strengths, Know Your Weakness

Working your strengths might be a good strategy for finding the right career, but ignoring your executive skill weakness can humble and tumble giants.  As many leaders have come to learn recently, a single weakness blown off as irrelevant can negate the strengths of even the mightiest of top performer CEOs.

 

Tony Hayward's fate as CEO of troubled BP was likely sealed weeks before the Deep Horizon well in the Gulf of Mexico stopped gushing millions of gallons of oil. His story serves as a cautionary tale to CEOs everywhere of how a single mishandled crisis can eclipse an entire career. In three short months, Hayward learned what it meant to become the face of disaster. What he didn’t learn was how to keep his mouth shut.

 

Chief executives must placate a wider variety of constituencies than ever before, making the job's symbolism nearly as important as its substance. Mr. Hayward's various gaffes—saying he wanted his "life back"—and sour appearance before legislators showed a degree of tone deafness that is no longer acceptable for corporate leaders, management experts say.  Hayward also initially described the spill as "oil [only] on the surface. There aren’t any plumes," a gaffe he never lived down.

 

This incident should also serve as a warning to hiring managers and boards of directors who focus too much on executive strengths and pay too little attention to executive weaknesses.

 

Executive skills have little to do with the job position as much as they describe innate cognitive functions that all people, not just corporate executives, “execute” in a work environment.  Chuck Martin, author of “Work Your Strengths” and CEO of NFI Research, identified 12 executive skills.  Certain ones are prevalent in high performing individuals.  Specifically, Martin’s group found three executive skills shared by nearly all high performing CEOs:  Goal-Directed Persistence, Planning/Priortization, and Working Memory.  Goal-Directed Persistence was the most dominant skill in 43 percent of the CEOs surveyed.  As significant, only 6 percent of top performing CEOs had Goal-Directed Persistence as a weakness.

 

The executive skill that helps an individual think before you act (and talk) is called Response Inhibition. It is the ability to resist the urge to say or do something to allow time to evaluate the situation and how a behavior might affect it (Source: Work Your Strengths). If you tend to say the first thing that pops into your head and later regret it, you’re likely weak in Response Inhibition.

 

Hayward’s repeated gaffes over the past three months demonstrate clearly how a single weakness can turn a respected leader into everyone’s favorite punching bag. Even under normal conditions, the data deluge is beginning to stretch people beyond their information capacity. During a crisis, all bets are off. That’s when stress and fatigue degrades executive skills and the weakest skills fail first.  In the case of Hayward – not to mention Vice President Biden, Former President George W. Bush, and Britney Spears to name a few – a lack of Response Inhibition likely led to his demise. 

 

Maybe a better title for Martin’s book would be “Work Your Strengths, Know Your Weakness.”

 

Listen to my interview with Chuck Martin on Workforce Trends Blog Talk Radio.

 

What CEO or other famous people gaffes stick in your mind that eventually brought the speaker down?

60% of Companies Face Leadership Talent Shortage

Nearly 60% of companies are facing leadership talent shortages. Thirty-one percent expect this lack of leadership talent to impede their performance in the next several years.

What’s even more troubling for most companies is that nearly 40% of their home-grown “high potential” leaders end in failure within the first 18 months, taking with them an investment of hundreds of thousands of dollars. The chances that a new executive will quit or be fired within the first three years jumps to greater than 50 percent. The cost of replacing a newly recruited executive could be anywhere from three to five times that executive’s salary.

Replacing a failed executive carries a much bigger cost than just salary and benefits. When you include lost opportunity, the cost of a failed leader skyrockets.  In Aon Consulting’s 2008 Benefits and Talent Survey, 25% of companies reported a reduced ability to deliver desired customer service skills; 20% reported a reduced ability to meet revenue growth goals; and 18% the reduced ability to innovate.

Failed leadership talent management doesn’t just start, however, after a high-potential candidate is promoted. In a September 2009 survey by the Corporate Executive Board, one in three emerging stars reported feeling disengaged from his or her company and 25% of them intend to jump ship within the year.  For those who remain, one in three admits to not putting all his effort into his job.  It’s no wonder companies end up with a shortfall in their leadership pipeline and surplus of missed expectations.

The problem doesn’t seem to be the result of a complete lack of interest or investment in developing leaders. In 2009, U.S. companies spent an estimated $12 billion (24% of their overall training budgets) on leadership development programs and services. It’s apparent that what many companies are currently doing to grow and develop future leaders is not working.  To correct what’s wrong with leadership development, senior managers must fix six common leadership development mistakes:

1. Assuming that high potentials are highly engaged.
2. Equating current high performance with future potential.
3. Delegating down the management of top talent.
4. Shielding rising stars from early derailment.
5. Expecting star employees to share the pain.
6. Failing to link your stars to your corporate strategy.

Developing leaders is one of the most critical business needs in the modern workplace, and having the right people in place to lead your organization through tough periods of fast growth and economic downturns is critical. In the United States, the leadership shortage will grow dramatically over the next decade.  A 2008 Aon Survey reported that 56 percent of the respondents report that they are experiencing a shortage of qualified leadership talent. That was up from 40 percent from the previous year (2007).  Based on the increasing complexity and pace of change in today’s markets the shortage of qualified leaders is only going to grow as leadership demands increase.

Topping the list of the 10 Critical Components of a Talent Development Program are (1) explicitly test candidates in three dimensions: ability, engagement, and aspiration and (2) emphasize future competencies needed more heavily than current performance.

Click on the link to purchase and download a copy of How to Keep Your Top Talent.

Working Virtual: Goodbye Office, Hello Telework

Can you see an office-less company in your future? Estimates of how many people telecommute and how often they do it vary widely, but the result is the same: telework is growing rapidly.

According to the research firm Forrester, more than 34 million U.S. adults telecommute occasionally and an estimated 63 million will do so by 2016. The latest American Community Survey data reveals that some 2.8 million American workers — or just over 2% of the working population — consider home their primary place of work (the data excludes self-employed or unpaid volunteers). Meanwhile, the number of people working from home at least one day a month, according to WorldatWork Telework Trends, grew from 9.5 million in 1999 to 17.2 million in 2008.

The numbers, though varied, all point to one immutable fact: the workplace of the future is our home.

What's behind the accelerating trend? Based on the number of articles on blogs, questions on LinkedIn discussion boards, and a recent report on telecommuting in Inc. magazine, going virtual is a decision many CEOs and owners are wrestling with. It seems that the convergence of technology, a changing workforce and recession that forced most companies to look for new ways to cut costs enticed many executives and business owners to take a hard look at taking their company virtual.

The most tantalizing and obvious benefit of going virtual is significant savings: no rent, no building maintenance, no fees, no real estate taxes. Getting rid of the office and working remotely also has appeal to younger workers, new parents and contract workers. It is also better for the planet.

But eliminating the costs of owning, renting and maintaining an office has a blinding appeal if the CEO/business owner doesn’t have his eyes wide open.

I was one of those business owners who took the plunge into the depths of the virtual business world a few months ago. For the record, I had been the teleworker in my business for the previous six years. For those six years, my employees went to work in an office — and I worked remotely. When it came time to renew the lease, my employees and I evaluated several alternative office locations including staying put. But after very little deliberation, they opted to work from home. The decision was made. My business would become office-less.

All-in-all, we have no regrets. In fact, the transition was virtually uneventful (pun intended!), barring a few technology hurdles and hitches. But compared to over a dozen moves during the past three decades — a combination of business and residential — going virtual was a piece of cake.

Despite the rosy picture I’ve painted, I will be the first to point out that a virtual business is not for everyone. Based on my experiences, I recommend management, partners and employees consider the following questions.

1. Have all the senior managers, owners and/or partners worked virtually before? If not, I'd encourage everyone to take the next 30 or more days to work from home and see how it works. Spending your entire adult life working in an office causes you to develop habits, such as eating lunch with co-workers or scheduling meetings to break up the day. Working from home disrupts the routine. You may like it or hate it. If the decision to go virtual is already a done deal, this time will give management the opportunity to work out the technical glitches and emotional hiccups.

2. Do the same thing for your employees. Even if you provide the technology for everyone to work virtually, not all your employees may be disciplined enough or comfortable enough to do so. In other words, do you have the right people in place to do this? In addition, do the employees have space for a home office or will they be forced to use the kitchen table? What about office furniture and equipment? Who will provide it and where will they put it?

3. How will you hold out-of-sight employees accountable? Even if your employees don’t always get along in the traditional office space, a co-worker or manager is only a few steps away from a face-to-face meeting when it comes time to work out a disagreement, adjust priorities, mentor an employee or collaborate on a project. When everyone is working remotely, you have altered roles and responsibilities. Instead of employing a group of competent generalists, the expectation is now one based on specialists who are productive, efficient, and good at meeting deadlines without someone looking over their shoulder. Are your employees ready and able for this challenge?

4. When working remotely, high-speed connectivity is critical. Don’t assume every employee has the bandwidth capacity to work from home on a regular basis. In fact, some employees in rural or remote locations may be limited to dial-up or unreliable connectivity. Other workers may not have purchased the fastest Internet service package. Who will pay for the upgrades and monthly service fees? How will co-workers communicate with one another and with clients? Will they use home and/or mobile phones or will you (the employer) be setting up a VOIP (Voice-Over-Internet-Protocol) phone system? Where will your data be stored — on a server or in the cloud? In either case, how will employees access the data? Who will be responsible for setting up and maintaining the necessary technology in each employee’s home?

5. How will your customers react? Will a virtual home alter your "brand" or client's perception?  Where will you hold client meetings? Will the neighbors, customers and competitors think you have gone out of business and going virtual is a prelude to shutting down the business altogether? If employees meet clients, prospects and vendors in their homes, will the setting be business-like enough for the guests? 

6. Supervising employees in a virtual business opens up a quagmire of the unknown. Compliance with compensation, benefits and safety guidelines are still the responsibility of the employer. But OSHA and Fair Labor Standards Act are still based on the traditional workplace and predicated on a static work week. How will you hire and train new hires and develop current employees? How will you monitor hours worked? What about overtime? How will you handle a dismissal of a terminated employee? If terminated, how will you retrieve the equipment, furniture and data? It’s not like you can escort the employee out of their own home and pack up their belongings in a box.

It's my belief that many businesses will go virtual over the next few years. But I also believe that many will fail if the decision is driven by the allure of cost savings alone. The savings won't compensate for productivity loss and mismanagement due to human factors relating to working virtually and remotely.

Are you ready to go virtual?

Click here to learn more about Telecommuting by the Numbers

What Every Organization Ought To Know About Innovation

Without innovative ideas, a company stagnates and may even cease to exist. In other words, innovate or die.

But innovation isn’t just about turning on your right brain, brainstorming, and generating a few “aha” moments. It’s more than just dreaming up new ideas. Innovation is the "act of introducing something new” – with an emphasis on something new.

Harvard Business School professor Clayton Christensen has a little vignette in his book The Innovator's Dilemma about how people were trying to fly in the Middle Ages by fabricating wings, strapping them onto their arms, jumping and flapping real hard. For centuries subsequent innovators framed the problem as: The guys who died just didn't flap hard enough. Yet it still never worked. Once they understood that there were some basic laws of nature that they needed to account for, once Bernoulli understood fluid mechanics well enough to articulate his principle, then there was a law of nature we could actually harness.

A lot of good managers during these challenging times are flapping their wings. They are working very hard to fight some fundamental changes in the way we will do business when they should be harnessing the changes and identifying the opportunities.

What’s standing in their way? Until this century, businesses executed change at a controlled pace.  Market strategies were developed years in advance and product roadmaps extended years into the future.  Today, unprecedented changes in markets, technology, economies, and consumers' taste is continuous, complex, chaotic, and accelerating.  This rapid change has created a new set of challenges - very quickly.

Innovation demands creativity, the ability to develop new ideas.   But despite the entire emphasis about being more creative, every new idea isn't innovative. And many life-altering ideas never see the light of day.  Why? 

Because the only way creative ideas become reality is by taking risks. “The willingness to take risks is not always easy,” according to Jacqueline Byrd, the brain behind Creatrix,“ especially when forced to push an idea against opposition and adversity.  Innovation requires a willingness to accept criticism, to withstand frustration, and to make mistakes. In other words, innovation means that a person or organization is willing to push his or her ideas forward at some potential risk to his or her own security, career, reputation, or self-esteem.

Byrd, the author of The Innovation Equation, suggested in a recent Blog Talk Radio interview, that every organization should be asking, “Do we have the stomach and capacity to innovate?”

Strategically, that’s a fundamental and essential question for every organization and individual. In future posts, I’ll be writing more about how you and/or your organization can assess this innovative capacity, how to determine how much is enough, how to identify the 7 drivers of creativity and risk-taking, and 9 personality traits that shape innovation.

Learn more...listen to Innovative Capacity on Blog Talk Radio.

Did the recession gives employers an excuse for shedding under-skilled workers?

For almost two decade beginning with the "War for Talent" paper released by consulting firm McKinsey and Company, a shortage of skilled workers has been forecast. This crisis is by no means unexpected. Beginning in 2001 and accelerated by the Great Recession, job creation models were shattered. Outsourcing and automation became a fact-of-life for many organizations. Many businesses resisted change, hanging onto processes and people that were inefficient, unproductive and costly.

Many people ignored the warnings. Others challenged the logic. They argued that the Baby Boomers would retire, tech-savvy Millennials would replace them, and improvements in education and training would turn any shortage of skilled workers from a disruptive gap into a productive bond.

Well, the Boomers aren’t retiring just yet. The Millennials are unemployed. Gen X aren’t advancing up the career ladder. Education is desperately attempting to play catch-up with fewer and fewer resources and dollars. And workforce training is just plain underfunded, underutilized, and just too bureaucratic to retool more than 100 million workers with the skills they need quickly … and desperately.

The recession changed all that. It’s like the recession justified a business cleansing — wholesale layoffs, plant closings and outsourcing for the sake of avoiding bankruptcy or closing a business entirely. “Many businesses took the recession as an opportunity to clean house and raise quality,” says Mustafa Kapadia, an outsourcing advisor with EchoPoint Consulting. “The political and moral sting and backlash from replacing five people with one piece of software or equipment and outsourcing entire departments abated, at least temporarily, under the veil of business survival. Employees weren’t sacrificed for the sake of a few extra bucks on the bottom line but for survival and sustainability.” 

What happened in 2008-2009 should have happened voluntarily in many businesses years ago. The recession just provided the excuse.

See related article: "Jobs Report Affirms New Reality"