Posts tagged "alignment"

5 Reasons why Teams Fail

“You will find men who want to be carried on the shoulders of others, who think that the world owes them a living. They don’t seem to see that we must all lift together and pull together.” Henry Ford

I started this series with a question posed by a reader  asking  why some teams succeed and others don’t. When I began structuring my thoughts and getting advice from more experienced entrepreneurs, the same issues kept coming up in one form or other. The core message behind all of them was the same, to get the team to work right, certain factors need to be in place along with hardwork and persistence. We have all been in teams where team cohesion is problematic, it is always an extremely frustrating experience. Hence first off, selection of team members/partners is an extremely important aspect, one that needs to be given a great deal of attention. Call it co-incidence, my post on 8 characteristics of an ideal business partner is the most visited post on this blog. However, even after you have reviewed your prospect partners using the 8 step process, there is still a likelihood of things not working out. Listed below are 5 things to look out for to measure the health of your team:

1. Mismanagement of Competing Interests: When a team comprises of many ‘star’ performers they are bound to have multiple offers on the table. When these offers begin to interfere with their performance and their  commitment to the project at hand, problems begin to arise. If these are left unmanaged they will slowly set seeds of mistrust and suspicion in other team members, this has a destabilizing impact on the entire team. It is important that these competing interests are brought to the table and are not used to leverage a team member’s position or interfere with their commitment. To read more about managing competing interests please click here.

2. Lack of Candor: The ability to communicate effectively is one of the core reasons why some teams succeed and others do not. When a team is unable to communicate their thoughts, suggestions or feedback openly, tensions arise. Being candid is every team members responsibility to themselves and to the rest of the team. This is not always the easiest path to take and many a time one will need to step out of their comfort zone to say it as it is. However when all is said and done, it is the things which are left unsaid that destroy a team from within. Set up systems where everyone is given the opportunity to speak freely and easily. To learn more about the importance of candor please click here.

3. Lack of Trust: In any relationship trust is a must, without it there is no team. In my opinion there are degrees of trust which need to be developed within a team. Expecting your team members to have 100% trust in you and your abilities from the get go is wishful thinking. Trust needs to be earned. The ability to trust someone depends on their shared core values, self confidence and risk tolerance. Mismatches in these components will result in a slow build up of trust. Low trust teams are very fragile and the slightest of hiccups can have severe ramifications. To learn more on how to build trust please click here.

4. Lack of Accountability: When team members talk more than they actually do, problems are bound to arise. Without clear objectives on what each team member is responsible for a culture for execution cannot be formed. Without such a culture certain team members may ride on the coat tails of others just to get by. Every team member must be held accountable for what he/she has been given responsibility. Inability to meet commitments, needs to be reviewed and appropriate action taken. To learn more on the importance of accountability and how to create it please click here.

5. Consistent Poor Results: If a team is consistently unable to reach targets and goals, the team and entire business model needs to be looked into. Many teams linger on even when results are clearly not being produced. This puts an enormous strain on the team and eventually leads to unpleasant defections and confrontations. This issue must be dealt with as soon as possible and strategies and tactics revised. If the team is unable to produce the results it needs, it is best to figure out how and where the team should  go from there. To learn more about how to deal with consistent poor results please click here.

The points listed above are I believe leading factors why some teams fail. One of the factors that I have not included in this series is a lack of good leadership. This is an issue that I think needs to be tackled in a separate series. Also, unlike the problems listed above this issue does not have any easy answer which says follow steps 1, 2 and 3 to help overcome the issue. Good leadership is a rare commodity. It all goes back to team selection and who is chosen to be the leader. If there is a problem at the initial selection stage then the team has a lot more to be worried about. The issues highlighted in this post are in the context where even though the team and team leader were correctly selected, the team still fails. I hope to get your comments and feedback on this series.

Related Posts:

8 Characteristics of Ideal Business Partners

Consistent Poor Results

“Waiting is a trap. There will always be reasons to wait. The truth is, there are only two things in life, reasons and results, and reasons simply don’t count.” Dr. Robert Anthony

During the course of the week I have spoken about some key factors which lead to high performance teams failing. As a culmination of all the factors mentioned in my prior posts, the inability to reach targeted bottom line results, is a leading cause why such teams fail. I was advising a young startup team a few years ago, it was full of stars. They had a fantastic business plan and worked really well together. However the business was not gaining the traction they had projected. This was causing much tension within the team. This is a time when internal conflicts begin to surface. Initially no one really talked about it, rather they hoped that things would change. Unfortunately the market they were targeting was not ready for the product they had and soon the defections started to take place. This is a story one has seen many a time in small startups, as well as large companies.

It is only natural that when things are not going well that team members begin to explore other alternatives open to them. They are justifiably looking out for themselves and being realistic about the situation. However, if the business had created a culture of accountability and candor, I believe things may have gone very differently. Firstly, when things were obviously not working, how to tweak the business model would have been brought up and discussed candidly. Secondly, with greater transparency in the team, those individuals who were not contributing or whose skills were not required, could have started exploring other opportunities without suddenly leaving the team. Lastly, if the team did work well together there could have been other opportunities which they could have pursued.

Consistent poor results are definitely a major reason why teams and businesses fail. The key word is ‘consistent’. Losses are bound to occur at some point or other in a business. However, it is when they continue to appear without any direct action being taken, that it gets serious. As a team leader one needs to continuously keep a keen eye on key metrics and regularly update members about results and problems being faced. Transparency helps leave doors open for candid discussions and gives  team members the opportunity to make graceful exits. Warren Buffet has some wise words on this matter “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

Lack of Accountability

Accountability breeds response-ability.” Stephen R. Covey

Starting a new business is a lot of fun. The first couple of months everyone is really enthusiastic. People are making sales calls, improving the website content, developing new marketing concepts and generally being highly productive. After the initial couple of months or even a year, there is a dip. The spark of starting this new revolutionary business begins to wear thin (unless you started something like Google). All of a sudden those sales calls are not being made and there is just not enough attention being given to the key first customers which you closed. I have experienced this in the first couple of ventures I was a part of. Whenever a routine set in, the enthusiasm levels began to drop. This then brings us to the next factor that results in the falling out of teams…a lack of accountability.

From the very onset of a business venture, clear objectives and targets need to be set for every team member. They need to be accountable for a specific component of the business. The progress on this must be reviewed periodically. I believe it is usually a lack of clear objectives that brings about a lack of accountability within teams. This is the leader’s or senior management’s fault. It is a reflection of poor leadership skills and is often taken advantage of by individuals riding on the coat tails of the effort of others. I have been  part of many teams whether it be at school or in a business, when someone or other on the team takes advantage of the free rider problem and ends up taking undue credit for the success of the team.

The components  talked about in my recent posts, such as lack of candor and trust, usually lead to this lack of accountability. When there are no clear objectives communicated to team members, and this is compounded by a lack of trust between team members, there is very little motivation to work  hard. Neglecting this aspect of a business will result in inadequate traction and eventually lead to a poor bottom line results. I will talk about that in the final post of this series. In conclusion, make sure that everyone in the team is held accountable to certain SMART goals and targets. This is essential to meet positive bottom line results and eventually succeed as a team.

Related Posts:

Execution of Corporate Strategy

Lack of Trust

“Wise men put their trust in ideas and not in circumstances” Ralph Waldo Emerson

Trust is an essential component of any type of partnership,  be it business or personal. Without it, a relationship’s growth is impeded, it will in all probability remain stagnant and eventually break off. It takes a lot of hard work to build trust in a relationship, but very little effort to destroy years of accumulated trust. Looking back at the ventures I have been part of, I see that trust was definitely something created over time. However, there are a couple of factors that create the basis for this initial leap of faith and trust between individuals or a group of individuals. They are:

1. Shared Values: Before making any type of commitment, the underlying premise must be built on a set of shared core values. Core values are a set of values embedded into each individual’s system. They are the result of life experiences, culture, environment and our spiritual belief system. Hence ,when team members with different sets of core values come together the process of building trust is much slower.

2. Risk Tolerance: Everyone has different areas for the level of risk they are willing to take on, at any given point in time. Those with higher tolerance levels push forward and hope for the best, whereas others hold back and wait for the right time. When individuals with different levels of risk tolerance come together as a team, it takes a lot longer for trust to develop.

3. Self Confidence: I believe that individuals with higher levels of self confidence, have higher levels of risk tolerance too as they are positive about things working out. Whereas individuals with low levels of self confidence constantly doubt their own abilities and their plans to get it right. Individuals with differing levels of self confidence take longer to build trust.

Differences in these areas will result in trust being built slowly. Teams who have mis-managed competing interests,  not created a culture of candor in their business, will have severe problems in developing the level of trust needed to push the business forward. I believe that when there is a lack of trust in the team, team members are not able to perform at their optimal. If this problem is not handled in its early stages, the probability of members defecting and moving to greener pastures increases greatly.The key to incorporate candor into your business is to ensure that messages sent are consistent with what the business stands for. When these factors are in place one should be able to see higher levels of trust, this will eventually lead to better performance and results.

Related Posts:

5 Components to build Trust

Lack of Candor

“You can’t shake hands with a clenched fist.” Indira Gandhi

I have written about the importance of candor in earlier posts. When teams are unable to communicate effectively, problems start manifesting themselves from all angles. Most start up teams comprise of 3-5 individuals who usually work in very close proximity. When these individuals are unable to speak their mind or voice their opinions, tension begins to build up. I have noticed that this phenomenon occurs more where teams are comprised of individuals from the east rather than the west. I do believe this has much to do with culture. In Malcom Gladwell’s new book ‘Outliers’ his research validates this claim, delineating how Asian cultures affect the way an individual is supposed to communicate with another. It is about not ruffling feathers and ensuring that a status quo be maintained.

As a direct result of this mindset, conflicts are avoided at all costs. This further intensifies any frustrations plaguing the team. Lets face it, no one wants to be the one to bring bad news to the table. This is more the case when the team comprises of friends or associates you have been working with for an extended period of time. The feeling that there is a lot more at stake compels us to push these frustrations deeper. As a result of this almost unnatural behavior, the competing interests I spoke about yesterday begin to surface. Alternative routes available to team members start to become more attractive and this leads to greater diffractions in the team.

Lack of candor is a serious issue, one I have personally witnessed many a time. Writing about it is one thing,  putting yourself out there and talking about this uncomfortable situation is a completely different matter. To a large extent, the development of a culture of candor is dependent on the founders or individuals leading the group. It is only when all team members are comfortable talking about these matters and are assured that their comments and feedback help the team progress, will one see greater buy in from everyone. Undoubtedly this will require stepping out of your comfort zone. The benefits far outweigh the downside in this matter. More importantly, the future of your team may depend on it.

Mismanagemnt of Competing Interests

“Wearing the same shirts doesn’t make you a team.” Buchholz and Roth

Reflecting through the past couple of the ventures I have been part of,  this was one of the things which struck me as a vital cause for a team’s eventual downfall. The issue of managing competing interests is prevalent in most teams and organizations. However in teams which include many ‘stars’, this issue gets amplified. The reason being that stars are always on the look out for new opportunities, they are approached by many individuals who want them to be a part of their ventures and they are also approached by headhunters who are scouting for senior positions. In short these individuals have many options available to them from the onset and pinning them down to work on one business is very difficult. Multiply this issue by the number of stars in the team and there is substantial work to be done by the leader.

Looking at the bigger picture, a misalignment of interests is something that start-up companies have to deal with very often. From the very beginning, founders want different things from the venture. When investors come in, they have a different set of objectives and the employees of the venture will have another set of objectives. The entrepreneur needs to manage all of these competing interests by making sure that channels of communication are kept open and as candid as possible. It is when these competing interests are kept under wraps that they tend to blow out of proportion when brought to the surface.

Therefore in conclusion we have to accept the fact, that every team will have to deal with it’s share of competing interests. In dealing with them it is important not to allow any member of the team to use those interests to undermine the positions of others or to leverage themselves unfairly. Also, mismanagement of competing interests will lead to a drastic reduction of the focus of the team member. This further amplifies the problem, and soon the team finds itself moving away from each other. With transparency the team will be able to get a better idea of how it should proceed and who should stay on the team and who should leave. This can only be possible when a culture of candor has been embedded into the team. This leads me to the next factor which is the lack of the candor.

 

Financial Metric #4: SG and A Growth

“There is one rule for industrialists and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible” Henry Ford

Sales, General & Administrative (SG&A) expenses include, all salaries, indirect production, marketing, and general corporate expenses. This constitutes the bulk of expenses that a business incurs and should be constantly reviewed. The entire concept of running a lean enterprise extends from the fact that we use an optimal mix of resources to achieve our target goals. However, this is usually not the case in the real world and businesses tend to inflate costs drastically whenever they have some success. This creates an unhealthy dependence on extra resources and also leads to complacency within the team. When cuts need to be made during recessionary periods,  there is a detrimental impact on the team’s overall performance in such organizations. From the onset we have to continuously monitor our SG&A growth in relation to revenue growth as well as industry averages. This helps keep an eye on the ball and puts emphasis on efficiency. When evaluating this metric there are a couple of factors to keep in mind.

1. SG&A Break Up & Alignment: How are costs distributed through the business? We need to identify which costs contribute significantly to overall costs. This helps us map out IT, marketing, sales, payroll and other components which usually make up the bulk of expenses. Once we have this breakdown, we can analyze each component further and see how it contributes to the overall strategic vision of the company. If your company has a short term goal of increasing market share in its industry through mergers and acquisitions, there needs to be focus on getting the right people on the team instead of bulking up marketing expenses. We see hence how breaking up the SG&A and aligning it in accordance to the business vision is important.

2. ROI: Each major component such as IT or marketing, needs to be measured. When assessing your business it is important to delve into each component to gauge which technologies and campaigns are delivering an acceptable ROI and which are not. This exercise highlights non performing costs which are being incurred without adequate return. It is through this exercise that one can eliminate these costs and make the entire business more efficient.

3. Growth %: One also needs to pay attention to how fast the SG&A figures grow when the business begins to scale. This percentage needs to be kept in check and must be reviewed regularly to ensure that costs are not being overly inflated with growth. This usually happens when we begin to hire too many people, launch unnecessary marketing campaigns or have technology infrastructures implemented when not needed. This leads to erosion of operating margins and can have a detrimental impact on growth. If possible benchmark your SG&A against industry averages as well to ensure that growth is specifically aligned with the overall strategic direction the business wants to take.

SG&A needs to be kept in control and be constantly reviewed. However, I do not like pegging its growth to some budgeted figure. SG&A growth needs to be aligned with the business vision. Restricting it from growing over a certain percentage may have a short term benefit to the business, it may however prevent it from reaching its long term goals.

5 Tests of Commitment Levels

“There are only two options regarding commitment. You’re either in or out. There’s no such thing as a life in-between.” Pat Riley

The quote above epitomizes the true essence of commitment . There are no middle roads, if you cannot commit to certain goals or tasks, you are better off saying no. Over the last week we have talked about five levels through which levels of commitment can be tested. The list below summarizes all five levels and can be a quick reference list before making a commitment .

1. Core Values: The first level for any commitment is the need to check it for direct alignment with your core values. These are a set of values inherent and embedded into individual systems. They are the result of life experiences, culture, environment and spiritual belief systems. If we make commitments which deviate  from these core values, it will result in a disconnect, making it difficult to achieve set goals. To read more about core values and commitment please click here.

2. Goals: All of us have certain goals and targets we  want to achieve in life. These goals need to be based on core values. When we commit to a certain SMART goal, it is vital to think it through meticulously. It is only once you go into details that a commitment level is required and you can then gauge if it is something you aspire to. If the commitment is in line with core values and is something you want to work towards, you are ready for the next level. To read more about goals and commitment please click here.

3. Time: Committing to a goal requires an appropriate demarcation of time. Committing to a goal without the necessary allocation of time will result in half hearted attempts which are not productive. This is not recommended and one needs to be careful about being able to take out enough time to achieve particular tasks. Once time is allocated to a particular commitment we are ready for the next level. To read more about time and commitment please click here.

4. Support: Once we have committed to a certain goal, we need to ensure continuous support to it through the good and bad. One will most definitely encounter setbacks, this may lead to doubts about your level of commitment to the goal. Therefore, breaking commitment into manageable components is recommended, this will allow you to focus with greater accuracy as also support critical functions more appropriately. If you are committed to supporting your commitments you are ready for the last level. To read more about supporting your level of commitments please click here.

5. Improving: The last stage involves testing efforts to constantly improve on the level of commitments made. It is essential to continue to develop and enhance the processes we use to reach certain goals. This creates momentum and helps maintain levels of enthusiasm. It also provides motivation to acheive excellence in whatever you commit to doing. To read more about improving levels of commitment please click here.

These five levels provide a framework to test how committed you really are in achieving a set of goals. They force you to look deeper into situations to ensure that you are truly committed. Making a commitment is a serious matter and one which should not be taken lightly, specially in a startup venture where the team needs to pull its weight together to achieve goals. Individuals who do not honor what they commit to, cause hurdles that need to be dealt with immediately, so as to ensure that high levels of enthusiasm and motivation are maintained in the team.

The next time you need to make commitment, remember to test yourself for how committed you really are!

Improving Commitment Levels

“The will to win, the desire to succeed, the urge to reach your full potential… these are the keys that will unlock the door to personal excellence.” Eddie Robinson

Once a stage is reached where we actively support and work towards commitments, the next and final stage is improving the processes. This stage involves the commitment to continuously strive for excellence in all we commit to. We have to continue to find ways through which to improve on the processes currently in place. This will make the journey not only more exciting but also keep it from reaching a mundane and stagnant state .

The danger of a current set of processes stagnating is directly proportional to levels of complacency. This results in dramatic decrease in levels of motivation and drive to push harder. For example, with my current blog I am reaching a stage where I feel the need for change in layout design and functionalities.  I have hence begun working on these aspects to bring in a change. This continuous commitment to improve what we are working on not only makes our work more interesting but keeps the momentum levels high and ensures optimal levels of work.

The same logic applies to working on new startup ventures. There is a need to identify segments which are not working to potential and to ensure that improvements are put into place to rectify trouble spots. Without inculcating a culture which promotes continuous improvements to processes, naturally results in rigid organizational approaches where change becomes a challenge. This ultimately results in organizations being unable to realize their true potential. 

Hence every organization committed to achieving goals and growing its business, needs to inculcate improvement of current processes as a cornerstone of their strategy. This will provide them the ability to not only honor their commitment, but also enhance the capability to reach their true potential and unleash the power of their teams. 

 

Supporting Commitment

“When you get right down to the root of the meaning of the word succeed, you find that it simply means to follow through.” F W Nichol

It is only once we have our commitments chalked out and demarcated time to ensure they are completed, that the actual process begins. At the beginning it can be intimidating to figure out how to begin this journey. At this point it is essential that you focus on encapsulating the commitment into manageable components and identify which parts are the most critical. This is vitally important if you are part of a team which has joint commitment to reach certain targets or goals. If you are leading this team, you need to identify the important components and then lead by example.

When you start working on these critical components you will gradually begin to see movement towards desired goals. Progress in the correct direction, provides a great boost to overall productivity of a team and motivates moving forward. This level of momentum helps achieve fantastic results. For example, when I started this blog on the 1st of January 08 I made a commitment with myself to write daily for the entire year regarding entrepreneurship and life. At the beginning I was working on getting my footing correct and identifying the direction I wanted this blog to take. I settled into a weekly routine and readership has been increasing. This increase has provided me the encouragement to continue writing and give it my best.

Along the way you will most definitely face a fair share of trouble and doubts. There will be times when you will not get the results you expect and will question yourself on moving forward. At other times you will experience great hardship in the form of losing a big deal, a vital team member or negative feedback. All of these will test your commitment and  the strenght to keep moving forward. If you have made a commitment, it becomes your responsibility to stand up and defend what you are wanting to achieve.

This applies to all kinds of commitments, business, career or relationships. If you are not committed in supporting it through the good and the bad, keeping your level of commitment constant will become an increasingly difficult challenge. When you make a commitment, ensure that you will be there to support and defend it no matter the hurdles on the way.

 You are now ready to move to the last level.