The iceberg sank the unsinkable ship; it’s the villain of Titanic and it’s Grumpy Cat’s favourite character. But was the iceberg really to blame for this momentous event? Was it the iceberg that caused the Titanic to sink, or could it perhaps have been the lookout in the crow’s nest that didn’t have binoculars, or was too cold to focus on what he was doing?
In South Africa today we hear people voicing their opinions daily about corruption, inflation, the petrol price and toll roads. Companies are complaining more and more about lower productivity, increasing costs of motivating employees and higher levels of dishonesty. Could these be modern moral dilemmas or simply the manifestation of age-old behavioural biases that we are only now beginning to understand?
Avoid reactionary decisions
Economists claim that the world is predictable, but this’s not true. If this was correct then no one would drive expensive cars, because the point of a vehicle is to get from A to B, and therefore the smallest, cheapest car would suffice. Economics don’t frame people’s choices; people’s behaviour and their reactions frame choices.
What people often fail to realise is that decisions are made according to the limited information they have at hand. All they see is the tip of the iceberg. This means that decisions are made in a reactionary manner, without being fully aware of all of the facts.
An example of this is a study that was done by Coca Cola to see whether people preferred Coke or Pepsi. In a one sip taste test, people preferred Pepsi. Coke panicked and changed its formula, which no one liked and eventually Coke reverted to Coca Cola Classic. The point was that people liked one sip of Pepsi more because it was sweet, but if they had to drink a whole can it would be too sweet, which made Coke the preferred soft drink all along.
Another example of this is a mine that we consulted for. The employees were leaving early and this was costing the mine a lot of money. Managers would dock their pay and threaten them, but this didn’t work.
Eventually we discovered that the reason for these employees leaving early was not because they were being lazy, but because the geysers at the compounds were too small, so they were trying to be the first back in order to be able to shower in hot water. The geysers were replaced and the staff stopped leaving early, upping productivity and saving the mine a lot of money.
Be informed, then act
How then do managers guide their staff in a manner that is fair, non-reactive and that allows them to take in the whole picture? There are five steps which managers should follow to assist in changing employee behaviour.
Firstly, it’s very important that managers frame their requirements in such a manner that the employees understand what is expected of them. Secondly, it should be ensured that what is required of them is available or possible to do.
Managers should also consider the crowd effect and whether requests can be complied with without breaching social norm rules that govern our behaviour. People must be given choices of what to do, but not too many, and, lastly, factors used to make decisions should be channelled in a manner that will make the decision process as easy as possible.
The biggest question we should ask ourselves when considering people’s behaviour is; what is it that people really want? The answer to this, in simplified form, is that people want to feel like they are in control, they want to feel that they are progressing towards something, they want to feel connected and they want their decisions to lead them towards the accomplishment of some form of vision or meaning.
The full chain of events
If people’s perceptions, usually based on only the tip of the iceberg, are the propulsion behind their decision making processes, then understanding some perceptions could aid in understanding people’s choices.
Five perceptions regarding sales, for example, include that there is no real sense of value for money, that emotions trump rationality every time, that the decision process needs to be simplified, that people dislike losing more than they like winning and that people learn from others.
Why don’t we understand? Because we don’t grasp the full chain of events that led people to a particular decision. There are innumerable factors which play a role. When people begin to dig deeper and look below the water at what the rest of the iceberg is made of, a whole new world of possibility and understanding is opened up.
How To Build Better Employee Engagement
Here are my 10 tips for managers wishing to build real engagement.
Everything begins with values; with the top three highest priorities in an individual’s life. These are the source of that person’s primary purpose and the underlying determinants of their perceptions, decisions and behaviours.
In the context of managers wanting to help their teams to develop mindsets geared towards connection, conversation and experimentation, within a healthy environment, the process must begin with value determination.
Advice for managers
Here are my 10 tips for managers wishing to build real engagement:
- Write down the job duties that your people actually have: Their current, accurate, and most up-to-date daily action steps.
- Spend some time determining what their values are. You can use the free online tool on my website – www.drdemartini.com
- Once you have determined your highest values (the three things that are most important to you in your life, where you demonstrate your greatest discipline, reliability, focus and productivity), you’ll need to find the links between employees’ job duties (Step 1) and their highest values. This is a very specific and detailed step, unpacked below.
- The question to ask is, “How specifically will performing this particular job duty help me to fulfill my current top three values?”
Let’s say one of your team members is a payroll administrator. Her job duties might include: checking how many hours employees have worked; calculating and issuing pay; deducting tax and other benefits; processing leave and expenses; calculating overtime; answering staff queries; and giving advice.
Let’s presume one of her top three highest-order values is her children. The way to connect what she does with what she values is to ask questions like these, in order to make links and help her see them in context:
- Does working with numbers help you teach your children to pay attention to detail?
- Does making calculations help you help your children with homework?
- Does knowing the art of fair exchange give you a lesson to teach your children?
- By doing your work, are you earning the income you need to fund your children’s education?
- If it’s tedious work but you don’t give up, is that good role modelling for your children?
- Does knowing about money management, and sharing this with your colleagues, help them to help their own children?
- Does advising others make you better at giving your children counsel?
- The magic number to shoot for is 20 links, not seven. Once you get to 20, for some reason, it ‘clicks’ and people can see that what they do every day is (or can be) valuable and meaningful. Be aware that some links are harder to find than others. Some are obvious; some, more tenuous.
- Look for fluency. If the employee hesitates or can’t answer the question easily or at all, this is a sign that the job duty is incongruent with their highest values and they are not going to be inspired about that particular duty. (In this case, keep asking them how that specific duty would or could help them to fulfil their highest values, until they can see a connection.)
- This is a big job. Value determination and link creation can take a whole day or more, the first time you do it, depending on the size of your team.
- To create better connections between your people, use the same process to cross-link others’ three highest values with your three highest values. Go through the entire team, making a list of values across everyone you manage. Look at the common threads. This will help you achieve more equitable leadership, better management and healthier relationships.
- For better work conversations, remember that dialogue comes from equal values (or else you simply have alternating monologue). Employees must know each other’s values. You, the manager, must master the skill of communicating your high-priority intentions, expectations and delegations in terms of each employee’s top three values.
- Intrinsically, people love solving problems that align with their values, so fulfilling their values will give them the courage to experiment.
Remember: People go to work every day to fulfill themselves, not for the sake of a company. For this reason, managers must enable their people to explicitly connect their own values with their everyday, real-world job duties, so that they become engaged, feel grateful for their collegial support system, and are inspired to go beyond the call of duty and to innovate.
6 Ways To Break Bad News To Your Team
We asked six leaders: How did you handle sharing the hardest news of your career?
Being the bearer of bad news is never fun. But there comes a time in everyone’s lives, when they’ve got to step up to the plate. This is especially true in business. When you’re in a leadership position at a company, knowing how to deliver bad news is a crucial skill. To help you out, we asked six leaders for their advice on delivering bad news to teams.
Here’s what they had to say:
1. With a promise
“After the economic meltdown of 2008, we couldn’t afford to keep everyone on staff. Picking who stays and who goes is one of the most difficult decisions you have to make as CEO. I delivered the news with honesty and empathy at an all-hands meeting. We gave some severance, referral to an employment service and a personal reference. We also gave the option to rejoin our team once things were back on track, and some did! It was a homecoming of sorts, a healing moment.” – Ori Eisen, founder and CEO, Trusona
2. With support
“In 2016, our office manager passed away. She was only 26. We called a mandatory meeting, let everyone know, and brought in grief counselors. The hardest part was controlling my own emotions in front of the company. This was a crucial moment, and the team needed a leader. We organised a memorial service to celebrate her life. It took time for the business to return to a normal cadence, but her impact remains at the company today.” – Rahul Gandhi, co-founder and CEO, MakeSpace
3. With transparency
“In New York, construction delays are as common as yellow taxis. But when you’re working to open a new restaurant location and have promoted staff to run it, construction delays don’t impact just revenue but your team’s livelihood as well. Delaying promotions for people who have worked hard to earn them is tough news to deliver. But we invited the team to the construction site to see the space and ask questions, and it helped everyone get on the same page.” – Otto Cedeno, founder, Otto’s Tacos
4. With community
“The worst news my husband and I had to share with our employees, and kids, was that we’d decided to move our business from New York to Los Angeles. We gave employees the option to stay with us and relocate. Some came west, and others did not. We couldn’t guarantee that those who moved with us would love L.A., but we promised to figure it out together.” – Cortney Novogratz, co-founder, The Novogratz
5. With a plan
“One of my first experiences as an entrepreneur was running a restaurant, which I closed as a result of 2008’s downturn. I knew this was going to be life-changing for my team. We did everything we could to ease the disruption, and I leveraged my network to place laid-off employees in new positions – nearly 90 percent had jobs in just a few weeks. As a business owner, failure is hard, but it’s an opportunity to prove yourself as a leader.” – Michael Wystrach, co-founder and CEO, Freshly
6. With reason
“After I joined Interactions as CEO, my team and I identified significant roadblocks in our product development. We had been on an aggressive growth track, but it was clear we needed to right the ship. I told my board and team that we were shutting down sales to double down on R&D. Hitting pause was an incredibly hard decision, but it was necessary to ensure we were providing the best product and experience for our customers.” – Mike Iacobucci, CEO, Interactions
This article was originally posted here on Entrepreneur.com.
Why Small Businesses Are Unable To Pay Staff Salaries
Let’s look at it from a different angle and see if we’ll arrive at that same conclusion.
We’ve heard countless times the constant conflict between employers and employees over non-payment of salaries. Small business owners complain employees don’t understand what they have to go through to ensure the payment of staff salaries.
The moment they’re unable to meet up with the payment of staff salaries, workers accuse them of being wasteful when business was booming. So the age old story of members of staff not being understanding comes up again. The cost of running the business which includes maintenance of machinery, rents, paying off loans; all these and much more which sums up overhead cost.
While it’s true that overhead cost is usually the main challenge of small businesses, it’s true only in part. Let’s look at it from a different angle and see if we’ll arrive at that same conclusion.
Usually a lot of small business owners don’t save for the rainy day, neither do they invest income generated by the business for the benefit of the business. Personal savings and investment isn’t the same with that of the business. Small business owners tend to save and invest income generated by the business in their personal names.
Let’s look at this scenario:
Mr A. is the owner of a grocery shop. People are patronising the business. Business is booming, everything seems perfect. At this point there is usually no problem paying salaries and overhead. This is the tricky part, what the employer does with the income the business is generating at this point apart from ploughing the money back into the business will decide whether he’ll be able to pay salaries when business is slow.
One would expect the owner of the store to not only save but also invest some of the income made by the business.
This is usually not the case because it’s at this point of booming business and perceived excess cash that the owner remembers he’ll pay himself more than he usually does (and that is if he pays himself salary), needs to move to a bigger apartment or better still, buy a bigger car.
The moment there is downturn in sales as a result low patronage, the problem of payment of staff salary begins. Mr A. makes it clear to his employees that the business isn’t turning in a profit and he’s using his personal money to pay staff salary. Therefore, he can’t keep on doing it and he’ll have to owe salaries.
This could have been avoided.
Do diligent – don’t dilly dally
What happened to the excess profit of years before? It’s obvious the employer hadn’t been diligent with the funds. Instead of investing the money to ensure it generates further income for the benefit of the business for the rainy day, the employer would instead use the profit for his own personal benefit.
If Mr A. had saved the money and income generated by his grocery store in preparation for the rainy day, the company wouldn’t be caught up in the quagmire it was put in.
A business is a separate entity from the founder, whether it’s a small or a large corporation they should stay so; separate. I’m not talking about the technicalities of whether it’s a company or business name. We have to realise that in order for the business to not only survive but also succeed, it must be separate from the owner.
This is one aspect small businesses must learn from large corporations with sound financial plan. There are times these corporations declare losses, yet they’re able to pay salaries! Money made by the business should be for the business. It’s not the time to buy that new car. If employers work with the mindset of paying themselves salaries (not excessive), it would go a long way to ensure the business is afloat even during uncertain economic times.
In fairness, some employers who own small businesses have been exceptional in this regard. However, the fact is, majority of small business owners don’t function with this mindset. Businesses, just like it obtains in our personal lives, have their ups and downs. The things you do or don’t do during the ups are equally as important as what you do during the downs. Save, save and save. You can’t go wrong with this. Invest, invest and invest. You can’t go wrong with this either.
That profit isn’t for spending; at least not yet. Invest the money like you would do with yours. Invest it in the name of the business. Let your business own shares in other businesses. This is sound business practice.
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