The Corporate Crabpot

I did quite a lot of work for an urban school district some years ago.  One day I was talking with the superintendent about how to improve student achievement.  There are, of course, many theories and facts about this, but he really caught my attention that day when he referred to what he called “The Crab Pot”.  The superintendent (an African-American) said it illustrates a cultural norm among young African-American males.  I think it illustrates a cultural norm among white executives.  Here’s what it is:

People who search for crabs along the seashore usually have a bucket, or pot, that they put crabs into.  After a while, when many crabs are in the pot, they are slowly moving about, climbing over one another.  Eventually the crabs will create a pile that reaches up to the top rim of the pail, such that a crab crawling up on top of the others has the opportunity to drop out of the pot and escape.  Invariably at that moment, other crabs reach up and pull the crab down, so that no crab is ever allowed to escape.

An environment where people act like the crabs is one where innovation is shunned and “not invented here” syndrome takes firm hold.  It is an environment in which administrators and bureaucrats thrive, because nothing is threatening them or their secure place.  But it is also a place where high performers, creative types, and doers get frustrated, beaten-down and coopted.  They are very competitive environments, where nothing much ever gets accomplished.

Are you in a crab pot?  Are certain parts of your company crab pots?

If You Must Downsize: How to Maximize Return on People

Downsizing may reduce costs, but it won’t increase your return on people.  In fact, layoffs usually have a negative impact on productivity, morale, employee satisfaction, external reputation, and even the quality of your workforce.

It doesn’t have to be that way.  Follow these tips to overcome the negatives and get a greater return:

1.  Be smart about who is on the layoff list.  Many companies will make downsizing lists by seniority or by some percentage staff reduction in every department.  These approaches increase the risk of cutting good performers or destroying value chains.  Instead, take extra time to understand what drives value in your core processes.  Choose layoff candidates based on the least impact to operations and customer service.

Performance documentation can be valuable in making these selections.  but they can also be worthless, or even completely misleading.  Many performance appraisal processes reflect the manager’s attempt to secure the best pay increases, or to be used as a tool to play favorites.  As a result, they have little relationship to real performance.  If that’s the case, you need a better approach — and fast.

2.  Redesign jobs to make them more stimulating and streamline cross-functional processes to improve collaboration.  Typically, a company will reduce headcount and then expect everything to work the same way, but with fewer people.  What actually happens is additional tasks are assigned to the remaining employees, overloading them and reducing productivity.  Instead, take this opportunity to make jobs more engaging by redesigning roles and responsibilities to increase the freedom to act and level of responsibility.  And look for ways to improve cross-functional processes.  This improves efficiencies and collaboration, and it makes the remaining jobs far more engaging.  You’ll enable high performers to focus more on the work that needs to be done.

3.  Don’t stop investing in your people.  We know that learning and development are imporatnt to employee engagement and retention.  But much of the training in organizations is wasted because it does not measurably improve performance.  Strip out all training and development not related to building skills and knowledge that will affect current or future performance capabilities.  Consider using senior leaders to do training.  This reduces outside costs and ensures that training is connected to actual work challenges.

4.  Keep communicating.  Now more than ever you need to be keeping people informed.  There are two sources of stress: One, not knowing what will happen tomorrow, and two, having no control or influence over it.  Be upfront and candid about the situation and what needs to be accomplished.  You need to maintain the morale and productivity of existing employees, and they’re hungry to know what you’re thinking about.

5.  Track important measures.  Headcount and cost reduction are good, but you also need productivity.  Track efficiencies, cross-functional alignment, collaboration, employee morale, and voluntary turnover of high performers.  Additionally, you should be able to increase the quality of any new hires during this time.

The value of doing this well is substantial and includes:

  • Increased workforce productivity and satisfaction
  • Improved efficiencies and collaboration
  • Strengthened ability to attract and retain quality talent
  • Better positioning for growth

Benefits of Succession Planning

Succession planning offers a number of benefits, including these major ones:

  1. Management Continuity — When a management vacancy occurs, it’s good to know that you have candidates available to capably fill the position quickly and without search costs.
  2. Talent Attraction and Retention — One of the strongest ways to attract and keep top performers is to demonstrate the organization’s commitment to leadership development and promotion from within.
  3. Leadership Development — A good succession planning process does more than identify candidates for succession; it drives leadership development throughout your organization in an efficient, effective, and measurable way.
  4. Effective Governance — Succession planning is a hallmark of well-governed organizations.  It shows a high level of management and board capability.

Development of a program is a strategic priority and can be accomplished in less than six months.  An effective approach consists of three major components:

  1. A Leadership Pipeline to identify a common set of leadership competencies for your organization.
  2. A Succession Planning Process to measure your bench strength and plan for leadership succession.
  3. An effective Leadership Development Program to actively develop leaders throughout your organization.

Succession planning is most valuable when it is connected to performance management as inputs, and leadership development as outputs.  It’s also important to not just look at the leadership roles of today, but to consider how leadership roles will be different in the future.  Otherwise, you’ll be grooming talent for obsolete positions.

Additionally, many organizations need to have in place a CEO selection and replacement process providing the Board with a detailed roadmap to follow whenever a CEO vacancy may occur.  Such a process includes the steps to follow and defined roles (who does what) thereby reducing the confusion and dely that such a vacancy can cause.