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  1. FEAR ERODES PROFITS: TRANSFORM LEADERSHIP FOR SUCCESS Knowledge Management at Kent State University June 6, 2013 408-398-7220

  2. Our Aim Today: To Provoke Current Thinking about Fear and Trust; To build more Awareness about how fear impacts people, productivity, & profits; Look at what Fear is Costing Us—In Our Lives & Businesses Shift Leadership Thinking and Actions: How to Reduce Fear & Build Trust

  3. Reality: Why discuss fear? • “23 out of 24 businesses go out of business. America has an amazing tolerance for inefficiency.”Dr. Russell Ackoff • What percentage of companies listed on the Fortune 500 list when it was first published in the 1950’s exist today? • Some Fortune 50 companies today have an average 40% turnover rate. What does that say? • Workplace bullying is a sharp increasing trend.

  4. The Leadership System that creates fear is the same system that creates crisis, bullying, unemployment, civil unrest, & poor economies in our world.

  5. Definition ofFear • “An unpleasant, often strongemotion caused by anticipation or awareness of danger; anxious concern.”

  6. Fearis not a rational topic • People’s fears are real. • Your fears are different than mine—there’s variation in everything!! What are yours?

  7. Can fear motivate? Is fear an effective motivator? • Self-imposed • Threat of danger • Short-term • Intrinsic vs. extrinsic motivation Intrinsic (from within) Extrinsic (from outside)

  8. What We Will Discover Together; Increase Our Awareness: • 100’s of kinds of Fear • Fears’ Impact on People; • Fears’ Impact on Your Organization; • Fear Erodes Profits—and much more; • The Job: Identify & Reduce Fear, & Build Trust

  9. Challenging work Great workplace Recognition, appreciation Teamwork Collaboration Fair pay and benefits Able to learn, share ideas Fear, politics, win-lose, lose-lose, internal competition Bullying, incivility What We Say We Want --- What We Get

  10. What kinds of fears and challengesdo you experience?

  11. What kinds of fears and challengesdo you experience? • Job security; losing a job or business • Change • Uncertainty; the unknown • Skilled workforce • Speaking up • Making mistakes • What’s happening in the world

  12. Not enough skilled labor Too many employees retiring Government regulations Consumer confidence Lack of customers Lack of credit availability Healthcare Issues Competition from a Big or an Innovative Business Cash Flow Over-staffing; under staffing Poor leadership Global Competition Bankruptcy Pay for Performance rating Taking a risk Fears

  13. Saying “I don’t know.” Making mistakes Failure Missing deadlines Losing a home or business Exposing weaknesses Death Losing face Loss of respect Not fitting in Low performance/appraisal Public speaking Making a bad decision Not having the right answer Looking stupid Not being understood Not being able to learn—fast enough Unhappy customers/investors Loss of control Fears

  14. What is the impact of fear on people?

  15. What happens to people? • Analysis paralysis: they stop making decisions or sharing suggestions. • Get overwhelmed, stressed, and reactive. • Get quiet and stay to themselves. • People are criticized, judged & blamed. • They get defensive and complacent. • They sabotage data or results. • Lose their passion, energy, & commitment. • People compete; don’t trust others. • Win-lose or fight/flight attitude/behaviors. • They use aggressive or passive-aggressive behavior. • They hunker down. They quit.

  16. How Does Fear Impact An Organization?

  17. What Happens in the Organization? • Failures & mistakes are hidden. • Productivity plummets; • Work, information, & communication do not flow; data is distorted; • Absenteeism & turnover increase; recruiting and hiring costs increase. • Creativity & innovation decrease; • Inefficiencies, waste, and complexity increase. • Quality wanes; reputation suffers. • Customer service suffers. • Employees don’t feel appreciated, and morale deteriorates.

  18. What Happens in the Organization? • Commitment to new learning, trying new things, taking risks, helping each other decreases; • Employees do not jointly problem solve or engage; • Blame errors on others; finger-point; accuse people; • Get a reputation for an abusive, dysfunctional, toxic culture. • Bullying and incivility are accepted and increase. People lose their soul. • Go out of business.

  19. Fear Creates Scarcity & Failure • Lack of personal feelings with Passion • Lack of a creative, collaborative changing, culture with an aim • Less service, Quality, commitment to learning, improving, and innovating TOGETHER for customers • Less revenues, profits, competitive edge, and growth; lower stock price • Eventual poor reputation, more struggles, turf wars, & demise.

  20. Where is Fear? • Fear also exists and thrives in the silence of organizations. Shhhhhhh . . .

  21. COST OF FEAR Thousands? Millions? Billions of $$$?

  22. “The most important measures are unknown and unknowable.”Dr. W. Edwards Deming“If you can’t measure it, you can’t manage it.”(myth)

  23. Creativity & Innovation Loss Collaboration Loss # of Patents High Turnover Internal Competition Cost to Recruit/Train New Hires De-motivated Employees Loss of Market Share Immeasurable Immeasurable Measurable Measureable Immeasurable Immeasurable Immeasurable Immeasurable The Cost of Fear: Measures

  24. Costs:lives, good work,our jobs,learning,self-esteem

  25. Does anyone care about profits? $$$$ Greed, Arrogance The Bottom Line, Results

  26. Management Fads and most “Best Practices”create fear, internal competition, finger-pointing, blaming, bullying, and toxic work environments. . .

  27. Holding Individuals Accountable for the Outcomes of the System Quotas, Targets (6 sigma) Incentives: Carrot & Stick Arbitrary Numerical Goals Performance Appraisals Pay for Performance Motivating Employees Ranking & Rating Unclear Purpose & Direction Lack of Understanding about the strategies and resources needed Busy work that creates complexity and waste Power Point Paralysis Management Fads & “Best Practices” that Create Fear

  28. WANT/EXPECTATIONS: Collaboration, Team! Self-motivated worker Problem solver Excellent communicator Shares ideas, creative Happy, hard working Hire passion/”fit”/live wood WHAT WE DO: Rank and rate De-motivate, intimidate Tell, micro-manage Judge, blame, accuse Give incentives, quotas Hold indiv. Accountable for the System’s outcomes My way or the highway Integration of Destructive Fads

  29. Our Aim Today: Our Current Thinking is provoked; We are more Aware: about how fear impacts people, productivity, & profits; the many management fads that cause fear; the costs of fear Shift Leadership Thinking and Actions: How to Reduce Fear & Build Trust

  30. Transform Your Thinking & Organization:Begin the Journey

  31. Point #8: Drive out fear! and build trust! “We can’t have quality, creativity, productivity, innovation, collaboration (or an interest in serving customers) if people in our organization can’t share information and tell the truth. We can’t improve organizations when people are afraid to participate, contribute, or cooperate.” Dr. Deming

  32. SystemsThinking A Management Philosophy for Transformation Understanding Variation Understanding Variation Theory of Knowledge Theory of Psychology Understanding Variation “System of Profound Knowledge” (Deming)

  33. Search for Fear—reduce it! HOW? ASK QUESTIONS to understand DEVELOP LEADERSHIP to serve employees and customers THINK and Plan through the lens of the SoPK; create a plan to develop trust CHALLENGE Current beliefs and assumptions

  34. Strategic Compass --each question below is inter-dependent with all of the other parts VISION/COMPELLING PURPOSE/AIM: “What are we trying to accomplish TOGETHER?” VALUES: What do we stand for? What do the words, policies, and behaviors we use reflect? METHODS/STRATEGIES: “By what methods will we achieve our aim? What resources will we need to support these methods?” All parts of the system must work together to achieve the Aim CUSTOMERS/MEMBERS: “Who are we serving (internal and external?) What do they need? How do we know?” MEASURES OF PROGRESS AND SUCCESS: “How do we look at data over time and in context for better decision-making to achieve better results and have better control of our work?” Marcia Daszko & Associates

  35. Trust Creates Productivity and Profits Innovation Learning Creativity Collaboration Joy in Work Quality Leadership Caring Courage Continually Improving ... better and better Aim $$$ Serving Customers

  36. Leaders Develop a New Vision, Direction, a Compelling Purpose and Inspire People What does the organization look like? How do people engage, interact, serve & care? What behaviors do we want?

  37. How Can You Build More Trust and Lead and interact in a better way? COMMON AIM What will create trust? TRUST

  38. How Will You Define Success in the Future? What direction are you going? What is your Plan? (use the Plan Do Study Act model) What do you need to think and know to lead a culture of trust and build joy in work?

  39. What We Say and What We Do • The beliefs and assumptions (what we Think and may say) • The structures (what we design; are they fear-full?) • The policies and procedures (what we create) • “I don’t care what you say; I only watch and believe what you do/act (how you interact.)”

  40. True Scenario: A company full of fear • The Challenge: $30 million co. Declining sales and profits, 50% turnover per month; managers blame each other • The Assessment: executives finger-pointing; explosive work environment; lack of systems, processes and communication flow; huge fear; a crisis situation. • Current Direction: on their way out of business • The Commitment:Open to Learning, question, lead & transform • The Change: Power of Purpose; commitment to learning & new thinking; Reduce Fear & Build Trust; Improve and Serve all customers; Create new systems: only leaders are accountable. • The Result: Growth from $30 to $200 million; no turnover. Leadership, joy and pride in work developed throughout co.

  41. Take-Away’s:What Is Fear Costing You? • Become more Aware of fear and its Impact; • Work to reduce fear & create a plan/systems to build leadership thinking and a culture of trust; • Get an outside assessment of the fear-causing management fads, “best practices”, leadership thinking, systems and behaviors that impact your bottom line, profits, culture, and your health. Where do you stand? What is fear costing your organization?

  42. Take-Away’s:What You Can Do • It is leadership’s job to reduce fear and build trust. • Develop all employees’ leadership. • Create forums for open conversations to discuss issues and solve them Together. • Create plans to improve communication and work flow. • If the culture is out of your control and toxic, get out Fast. • Find a place where you can thrive.

  43. HELPFUL RESOURCESDriving Fear out of the Workplace by Kathleen Ryan and Dan OestreichFeel the Fear and Do It Anyway by Susan JeffersLeadership and Self-Deception, Second edition. by The Arbinger InstituteThe Essential Deming. Edited by Dr. Joyce Nilsson OrsiniLove ‘Em or Lose ‘Em by Sharon Jordan-Evans and Beverly KayeDrive by Daniel H. PinkFree, Perfect, and Now by Robert RodinFlash Foresight by Daniel BurrusThe New Economics by W. Edwards DemingDeming’s Profound Changes by Dan Robertson and Ken DeLavigneOut of the Crisis by W. Edwards DemingPower by Jeffrey PfefferThe Leader’s Handbook by Peter ScholtesIntrinsic Motivation at Work by Kenneth ThomasThe Goal by Eliyahu GoldrattArticle: “What Profound Leaders Need to Know,”

  44. THANK