Reflections from Silicon Valley

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I had a real intense week in Silicon Valley with tons of meeting at Google, Stanford, Change Maker Lab and so on and I have noticed a pattern… more or less the questions asked were the same. I guess because are crucial questions for our future and I have decided to share these questions with you:

1) What are the key ingredients for great management?
2) How would you re-imagine management?
3) How does EQ create value in biz?

The energy dedicated to innovation, even innovation in management, is really high here and the focus on the future is outstanding. What about us? How would you answer to the above questions? Did you reflect about the future of management?
Below you can find my answers and I am eager to see yours…

What are the key ingredients for great management?

We have investigated this topic for ten years, asking over 10.000 leaders from all over the World “what are the X-factors for performance?” Let me share three findings:

1) The result of our research says there are 5 factors that explain 60% of the performance of companies, and BTW these 5 factors are cross cultural and cross sector: motivation, Teamwork, Execution, change and trust. We call this the Vital Signs.

2) You can increase the Vital Signs. Last year we had the opportunity to work with one plant of Komatsu, the Japanese company, and in Six months following our Vital Company methodology we have seen scores on these Five factors doubled!

3) And, last but not least, would you like to know the good news? You can have, as a leader, a huge impact on these factors even in your small group. How? Change the way you manage people. Fortunately, new neuroscience gives clear insights to how people work, probably it’s time to use it.

So just to summarize: the Vital Signs explain 60% of the organizational performance. You can increase your Vital Signs – if you manage people better. isn’t it interesting?

How would you re-imagine management?

First of all, let me say we Have To re-imagine management. It’s not a “nice to have,” but the only way to maintain the edge of innovation, productivity and profitability in our companies.

Our research at the Centre for Innovative Management offers insights about what we should do – here are three of our six principles:

1) From extrinsic to intrinsic motivation. If we want employee’s commitment, work is about more than money! Especially in times of uncertainty, people look for purpose, they need to feel they are doing the right thing.

2) From personal to team performance. To solve complex problems you need multiple perspectives; the one wo/man show it’s not enough right now. And let me say that All the reward systems need to be aligned to this idea.

3) From change management to change makers. It’s not enough to obtain one result; we need people to dive into change – to take risks and value failure. To keep learning. If you don’t fail never it means you are too conservative. This takes Trust — trust the real accelerator for growth. How many companies are measuring it?

In just one sentence: people engagement is the real competitive advantage – which means that’s the leader’s #1 job.

How does EQ create value in biz?

Would you agree we’re living in turbulent times? As businesses deal with increased complexity, people experience more pressure and more uncertainty. These business challenges create a huge impact on our emotional side. In this pressure, if people don’t have EQ skills, they react – instead of respond.
It doesn’t mean we have to leave the rational paradigm — but that we have to use it together with the emotional one. Neuroscience research shows us that this is the way the brain works best: when we blend the ration and emotional, we get more insight, more energy, more power. It’s a matter of intentionality and capability to do what we really want to do as individuals and as a company.

And BTW data confirms these considerations. Let me share a very interesting piece of research we did early this year with the Amadori case. Amadori is one of the most important McDonalds’ suppliers in Europe and we had the opportunity to work closely with them to support their Leaders development. We collected lots of data over three years, and generated three very important findings:
EQ predicts performance: more or less half of the managers’ performance was explained by Emotional Intelligence
The higher the EQ – the higher the engagement, or commitment, of people: three quarters of engagement was explained by Emotional Intelligence
Engagement drives productivity: the plants with the higher engagement had the better bottom line.

So – high EQ managers respond instead of reacting. This lets them engage people – and this has serious bottom-line value.

It’s your turn now… 🙂

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Microsoft, management lessons from my students…

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In one of the last post, we have discussed about Microsoft and its Performance Management System. This topic raised an incredible and unexpected interest and so I have decided to transform the article in a part of the final exam for my students at the Faculty of Engineering. What was even more surprising was the level of the answers… Here you can find a summary of the main points:

1) introduce Emotional Intelligence inside the company – probably this point was stressed because they know my passion about neuroscience and people-centred methodology and to have an higher score they are capable to do things like that but I have to say at least they have chosen the right reasons… 🙂
– If you want to understand the people behaviours you need to use both the rational and the emotional perspective
– Leaders need to be in charge of the emotions (their own and others’ emotions) inside the company.
– Emotions drive people, people drive performance. Unpleasent emotions for example have a huge impact on learning and innovation!

2) Cancel rankings – the ranking is dead, each person is a unicum, an unique human being!
– Discover and use the strengths of people, it’s the easiest and fastest way to performance
– Support the development of people to Mastery is one of the most important goal for a Leader
– Match people’s potential (strengths, passions, expectations) with organizational challenges

3) Shift the focus to Teams – innovation in complex situations is a team activity not a solo effort.
– High performance Teams are the ones with an high level of Divergence (in terms of brain styles, backgrounds and strengths)
– The Leader is in charge of the quantity and quality of connections between team members, not always quantity means quality…
– The harder the team challenge, the easier is the failure. We need to establish a culture of exploration where we evaluate not only the final results but an overall set of paramethers because we want the brightest people to embrace the hardest challenges without trying to be conservative.

What is interesting is that you can measure Emotional Intelligence, you can measure the people strengths, you can measure the Divergence inside a team… They are not asking to change the actual ranking system with a touchy feeling method but with a different set of paramethers and as usual what you measure is what you get!

Not so bad as free consultancy, isn’t it? In the reality my students would like to have free Office’s licences… If someone in Microsoft is reading the blog post… 🙂

Do you know what are the drivers of performance?

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I was a bit tired about a new theory about companies performance every day! More or less, in any new book about management you find the inner secrets of performance (look at amazon to have some exampleson what I am saying…). The problem is that the majority of the times these inner secrets are based on just one company’s case or on the perception of one person. That’s could be great because you can find some insights or ideas but, you know what, I am a quantitative guy and if there are no numbers or real serious analisys my brain is not working properly. And BTW it’s not my perception, is how my brain work. You can see it in the image below, this is my Brain Brief Profile (if you want to learn more about brain style click here)

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So considering my brain’s needs, this year we have analyzed data about more of 100 companies and 10.000 people to understand the drivers of performance. Today, I had the time finally to look carefully at the numbers and I am really excited about the results. The analysis confirms that trust, motivation, teamwork, execution and capability to change are the 5 most important factors… let me add fortunately because in the last year we have created a model called the Vital Signs where these factors were the base for an interesting model… To know more about that, click

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What is even more important is that the 60% of performance is explained by these Vital Signs factors!! Isn’t it cool?
And now a question for you: what is the most impacting factor in your opinion? In one of the next blog post I will say “the winner is…”

Ballmer is out. Is it time to change the culture at Microsoft?

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As usual the history of a company and the behaviours of Leaders are the main ingredients to create a culture, the tools used are a way to reinforce the desired actions. Now it would be too easy to say negative things about Microsoft (if you want to read a different story about Microsoft go there), what I would like to do is instead to focus on one managerial tool used in Microsoft to evaluate the impact of Performance Management in a company and how destructive could be.

In a great article on the August number of Vanity Fair, Kurt Eichenwald wrote:

At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” said a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
Supposing Microsoft had managed to hire technology’s top players into a single unit before they made their names elsewhere—Steve Jobs of Apple, Mark Zuckerberg of Facebook, Larry Page of Google, Larry Ellison of Oracle, and Jeff Bezos of Amazon—regardless of performance, under one of the iterations of stack ranking, two of them would have to be rated as below average, with one deemed disastrous.

For that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings. And the reviews had real-world consequences: those at the top received bonuses and promotions; those at the bottom usually received no cash or were shown the door.

Outcomes from the process were never predictable. Employees in certain divisions were given what were known as M.B.O.’s—management business objectives—which were essentially the expectations for what they would accomplish in a particular year. But even achieving every M.B.O. was no guarantee of receiving a high ranking, since some other employee could exceed the assigned performance. As a result, Microsoft employees not only tried to do a good job but also worked hard to make sure their colleagues did not.

“The behavior this engenders, people do everything they can to stay out of the bottom bucket,” one Microsoft engineer said. “People responsible for features will openly sabotage other people’s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the rankings.”

Worse, because the reviews came every six months, employees and their supervisors—who were also ranked—focused on their short-term performance, rather than on longer efforts to innovate.

“The six-month reviews forced a lot of bad decision-making,” one software designer said. “People planned their days and their years around the review, rather than around products. You really had to focus on the six-month performance, rather than on doing what was right for the company.”

The goal is clear: push people on the individual performance but as we all know, or we all should know…, the results for a company are not the sum of the individuals’ one. To create a great and complex product, you need a great team Who really collaborate.
Well, in Microsoft this system leads easily to look at the personal ranking and not to the overall result of the team. And unfortunately this is the mainstream, not only a Microsoft’s problem…

Now that Ballmer is out, it’s probably time to think differently: what would you suggest to do?

Leaders, do you consider Emotional Intelligence important?

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A three-year study of AMADORI, a supplier of McDonald’s in Europe, assesses links between emotional intelligence, individual performance, organizational engagement, and organizational performance. Emotional intelligence was found to predict 47% of the variation in manager’s performance management scores. Emotional intelligence was also massively correlated with increased organizational engagement with 76% of the variation in engagement predicted by manager EQ. Finally, plants with higher organizational engagement achieved higher bottom-line results building a link between EQ->Engagement->Performance. During this period, employee turnover also dropped by 63%.

Introduction
Many studies have identified the importance of employee engagement, others the value of emotional intelligence. This paper provides a unique intersection of three factors: Performance, Engagement, and Emotional Intelligence:

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To answer these questions the HR team at AMADORI, a major player in Europe’s food industry, and Six Seconds’ researchers conducted a multi-year study to assess these variables.

Background
Amadori is one of the leading companies in the Italian agro-food sector, an innovative company and an industry benchmark for meat processing. The turnover in 2011 was over 1.2 billion euros. Founded forty years ago in San Vittore di Cesena, the group relies on collaboration with over 6,000 workers and has industrial plants, subsidiaries and branches all over Italy. A supplier of poultry to McDonalds in several countries in Europe Amadori is subject to intense market pressure which requires constant innovation.

An internal analysis in 2007 led the senior leadership to focus on people management and development as a strategic priority. The Human Resources department was charged with leading transformation. In the words of HR Director Paolo Pampanini, “Managers, in particular, considered the renewal a business priority in order to achieve tighter integration among different business areas, better communication processes and sharing of information and mainly support management growth in terms of the development of personnel.”

In 2008, the HR team evaluated the company’s performance management process, and determined that a key ingredient for success would be integrating emotional intelligence into the leadership culture. The company created a new performance management process along with “The Amadori Academy” to focus on practical, real-world training.

Pampanini and the leadership team identified two key goals:

Application of the company’s competencies to be stronger as a learning organization.
Development of a manager-coach perspective where managers guide and support the development of employees with the use of feedback and individual development plans.
In 2009, the company partnered with Six Seconds, The Emotional Intelligence Network, to develop stronger people-leadership skills for managers. The goal was for top and middle managers to have new “emotional intelligence” skills and insights that would enable them to lead the complex changes that were underway. In 2011, the project expanded to measure organizational engagement in all of Amadori’s plants.

If you want to see the overall white paper click here.

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