The essential behaviors in healthy, successful people and organizations

When people are at their best, they display a set of healthy high-performance behaviors. We believe these are the innate behaviors we see in young children like curiosity, openness and trust. These behaviors also seem to be universal, as we have found them to be essentially the same in over 40 countries around the world, and in K-8th grade schools as well as in Fortune 100 clients.

Most of our research data validating the concepts is from organizations. As a part of the culture-shaping work, we help our clients refresh or reconnect to their values. Senn Delaney’s work in an organization includes a customized off-site session with the CEO and his or her senior team. Toward the end of the session, after discussing and experiencing the modes of behavior they consider most enjoyable, productive, and rewarding, the team members usually find themselves at the top levels of the Mood Elevator, feeling and operating at their best.

The Mood Elevator is an awareness tool Senn Delaney uses to describe our moment-to-moment experience of life. It encompasses a wide range of feelings and together, these emotions play a major role in defining the quality of our lives as well as our effectiveness.

It’s at this moment toward the end of the session, we ask them to define how they want to relate to one another once they are back at work -- and how they want to people to behave and work together throughout the organization. In response, the leadership team compiles a list of values that define a healthy, high-performing culture. The remarkable thing is that the lists are essentially the same. That led us to conclude that any group in a healthy place -- higher on the Mood Elevator -- tends to gravitate toward the same fundamental attitudes and behaviors.

We compiled these into a list of what we call the "Essential Organizational Values." We further validated the essential values with input from over 100,000 people who completed our culture impact survey.


Larry Senn

Here are the eight essential organizational values: attitudes and behaviors found up the Mood Elevator:

  1. Positive spirit/vitality. Creating an environment where there is teamwork, mutual support, and cooperation between and among people. Where people are fun to be around, proud of what they do, and willing to put in the effort that is beyond normal expectations.
  2. Collaboration/trust. Creating frequent and open two-way communication with people, and maintaining openness and trust among people with high levels of feedback and coaching.
  3. Appreciation/recognition. Appreciating and valuing people, and recognizing and rewarding performance.
  4. Agility/innovation/growth. Encouraging people to innovate, create, and be open to change. Empowering people, and having a bias for action and an urgency to move forward.
  5. Customer/quality focus. Having a high focus on and awareness of quality and customer service.
  6. Ethics/integrity. Acting with honesty and integrity. Core values and ethics are very important and decisions are made for the greater good of the organization. Seeing healthy differences and diversity as strengths.
  7. Performance orientation. Having high expectations for performance and accountability for actions and results. Being a self-starter.
  8. Direction/purpose. Providing a sense of direction and purpose. Having clear alignment connection to achieving the organization's strategic goals.

The list comprises all the behaviors that come naturally to people on the higher floors of the Mood Elevator, but elude them when they are on the lower floors. We’ve found that most successful teams and organizations live these essential values better than others. As a result, the individuals who belong to these groups usually find that they can spend more time up the Mood Elevator -- at curious and above -- and they are happier, more creative, and more productive.

 

Larry Senn pioneered the field of corporate culture and founded Senn Delaney, the culture shaping unit of Heidrick & Struggles, in 1978. A sought-after speaker, Senn has authored or co-authored several books, including two best-sellers. His newest is "The Mood Elevator" (August 2017), the follow-up to his 2012 book, "Up the Mood Elevator."

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to sign up.

Don’t slack on Slack: Limiting distractions and chatter at work

The Young Entrepreneur Council is an invite-only organization composed of the world’s most promising young entrepreneurs. In partnership with Citi, YEC launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses. Read previous SmartBrief posts by YEC.

If you enjoy this article, join SmartBrief’s e-mail list for our daily newsletter for entrepreneurs.

Q. How can you make the best use of Slack at work without it becoming a distraction or platform for unnecessary chatter?

1. Use Do Not Disturb

Once Slack becomes the hub of your team's communication, you may find that the constant notifications can paradoxically harm your team's productivity due to their interruptive nature. When employees need to focus, encourage them to use the Do Not Disturb or Snooze features to avoid getting interrupted by non-urgent messages. -- Roger Lee, Captain401

2. Set clear boundaries

We like to only create channels that help instill a focus on work and efficiency, and don't encourage our employees to create Slack channels geared towards personal conversations or events outside work. We set boundaries and let people know that they can talk about that kind of stuff at work, but that just isn't what Slack is for. -- John Hall, Influence & Co.

3. Be reactive, not proactive

There are rare times in the business world where it makes sense to be reactive instead of proactive. With applications like Slack, being a big brother-esque figure or monitoring the channel breeds resentment. You can see who is the most talkative person on the channel, so if it doesn't make sense for them to be the most chatty out of the bunch, treat them like an adult and ask them to reel it in. -- Bryce Welker, Crush The CPA Exam

4. Disable desktop notifications

The trouble with Slack is that there isn't a good way to differentiate "things I need to look at now" versus "things I need to look at later." Set an expectation for your team that you'll look at Slack at pre-determined times during the day. If they need you between those times, they should come to your office or shoot you an email. -- John Rood, Next Step Test Preparation

5. Install helpful Slack bots

Slack has a very robust directory of bot plugins to help with everything from to-do lists to feedback polls to group food ordering at https://slack.com/apps. These bots improve efficiencies and help coordinate conversations in Slack. -- Adelyn Zhou, TOPBOTS

6. Monitor employee Slack messages

There is an option in the Plus version of Slack that will allow employers to view company Slack messages. If employees understand their messages are reviewed, they will stop sending them over Slack. However, that won't prevent them from using Whats-app or the slew of other options on their mobile device. -- Nicole Munoz, Start Ranking Now

7. Use Slack for daily check-ins

My mostly remote team and I use Slack daily to share one goal that we hope to accomplish for the day. At the end of the day, we share whether we accomplished that goal and if not, what obstacle we encountered. During times we need to focus, we let others know we’ll be unavailable. Using Slack in this way helps my team to feel connected and setting good boundaries makes the tool less distracting. -- Mark Krassner, Expectful

8. Make your messages specific, relevant and targeted

We use very specific channels to facilitate productive conversations. We tag relevant people who need to see certain information or questions. We encourage team members to ask targeted questions, which cuts down on unnecessary chatter. We also integrate with Jell, allowing team members to report to-do lists and be held accountable. -- Matt Hunckler, Powderkeg

9. Open the Activity pane

If you open the Activity pane, you'll get all relevant mentions without all of the chatter so you can respond effectively. There are also a variety of keyboard shortcuts you can take advantage of to quickly use this tool as well. -- Andrew Schrage, Money Crashers Personal Finance

10. Limit your conversation length

Self-discipline is important in terms of setting limits on conversations on Slack. Make time to catch up and connect, but know that anything longer than 15 minutes is reducing productivity. Even set yourself to inactive if necessary to make sure it doesn't distract you. -- Murray Newlands, Sighted

11. Create a separate "fun" channel

A great way to avoid distractions on Slack is to divide your channels up. By dividing your work channels, you’ll be able to create a "fun" channel that can be used for unnecessary chatter and anything unrelated to work. Having fun at work is essential, but it's also important to prioritize, not get too distracted, and stay efficient. -- Solomon Thimothy, OneIMS

12. Don't set expectations of immediate responses

Slack is a double-edged sword. It facilitates communication and collaboration, but can be too much of a good thing. One way of dealing with distraction is to make sure everyone — including executives — understands that there’s no obligation to respond immediately to messages. If employees are focused on their work, they shouldn’t feel the need to stop what they’re doing and take part in a chat. -- Justin Blanchard, ServerMania Inc.

13. Lead by example

From the beginning, let your team know that you use Slack for its efficiency. Don't participate in chatter or small talk; go straight to the point and talk efficiently. Other users will start realizing how you use Slack and won't distract you or encourage you to participate in chatter. So as to not appear rude, use emojis to let others know you are not angry, just efficient. -- Diego Orjuela, Cables & Sensors

14. Establish rules and purposes for each channel

Slack is a very efficient online collaboration app that can best be utilized especially if you set rules and purpose for each channel. This will drive the focus of conversations to the purpose of the channel and will prevent unnecessary dialogues. It will also help to keep the rules firm and set reminders from time to time so new members are advised of the channel's purpose. -- Daisy Jing, Banish

15. Stay on-topic and ignore what you can

Promote a company culture that respects a channel’s topic. Then, unsubscribe from channels that aren't core to your job function. -- Tim Chaves, ZipBooks

16. Don't try to multitask with Slack

Multitasking can kill productivity. Focus on Slack when you need to. Otherwise, don’t let it interrupt you. Many of us are so used to having texts and social media notifications interrupt us. Perhaps try turning those off for a week so you get out of the habit of checking every time something new pops up. Then you won't exhibit the same behavior on Slack. -- Karl Kangur, MRR Media

Empathy makes you a more effective leader

Empathy is one of the most popular topics brought up for discussion by my executive coaching clients. It’s not surprising because empathy is the most important instrument in a leader’s toolbox.

Effective leaders make it a priority to take care of their people. In return, their people give everything to protect and advance the mission of the organization. They know how to inspire and motivate by tapping into what their team truly value and want. And, with millennials firmly in the workplace, this will only become more important.

A recent study by Weber Shandwick suggests that millennials, more than any other generation, expect the organization’s core values to be reflected by senior leadership. Their early schooling in social media is changing the way we do business. Companies can no longer get away with simply providing goods or services. They are also expected to deliver their message with honesty and compassion -- in other words, empathy.

But here’s the rub: While we crave being heard and valued, we have become so caught up in technology that we are dumbing down our social skills. Psychologist Sara Konrath at Michigan University found that young people are becoming less empathic than ever; American college students showed a 48% decrease in empathic concern and a 34% drop in their ability to see other people’s perspectives.

87% of the same millennials who expect to be understood and appreciated at work also admit to missing out on a conversation because they were distracted by a phone.

In a world that becomes increasingly automated and computerised, we are losing the very skills that are essential for effective leadership. How can we stop this shipwreck? Let’s take a look:

1. Understand the meaning of empathy

I have always found empathy to be intriguing because it allows you to read minds, something that came in handy as an FBI agent. By listening to another person’s words and reading their body language, you can figure out what they are feeling and thinking.

Empathy is not sympathy, nor is it feeling sorry for others. Instead, it is understanding what others are feeling or thinking. People tend to focus on the touchy-feely aspect of empathy, and it is indeed important to understand where another person is coming from. However, an empathetic leader is also capable of sensing what another person is thinking. This can be extremely helpful in everything from negotiating a salary to planning a social event for the office.

The solution: It’s important to examine your own attitude when dealing with others. Are you more concerned with getting your way, winning or being right? Put aside your viewpoint, and try to see things from the other person's point of view. Maybe you aren’t the center of the world after all.

2. Realize that empathy is driven by our brain

Neuroscience explains that our brain produces serotonin, a neurotransmitter that is a major contributor to feelings of well-being and happiness.  Other neurotransmitters, like oxytocin, contribute to emotions like pride, trust, and connection with others.

Both serotonin and oxytocin have long term effects that become stronger over time. Research on neuroplasticity shows that our brains can be rewired and that neurotransmitters can actually change the brain. On a deep level, we need to feel that we and our work is valued and appreciated by others.

All of these brain chemicals work together to help us bond with others. It’s why we feel safer when we’re part of a group. Back in the caveman days, our safety literally depended upon a group with whom we felt safe and comfortable.

The solution: Validate the other person's perspective. People have different opinions from your own and they may have good reasons for them. If you’re stuck on what to say, try this: “Is everything OK?”

3. Develop emotionally literate geeks

There are more millennials in the workplace today than boomers. Millennials are the generation raised on social media, automation and digitalization. Things that take time or slow are seen as a weakness. A large percentage feel that texting is as effective as one-on-one conversations.

We need to find ways to turn empathetic slobs into empowered leaders who can integrate technical expertise with emotional intelligence.

The solution: Take the time to embed the skills associated with empathy into every level of your organization. These are the skills that will differentiate automated machines from their human counterparts. Teach your people mental toughness so they will know how to manage their emotions, thoughts and behavior in ways that will set them up for success.

Empathy

4. Pay attention

Neuroscientists have discovered that humans are wired to experience empathy through mirror neurons in our brain. These mirror neurons reflect back what we observe in others and cause us to mimic those observations in our own brains.

As it happens, mirror neurons are strongest when we observe a person’s emotions. We see facial expressions, eye movements, body movements and gestures. Consciously and unconsciously, we mimic many of those same expressions, body movements, and gestures as we talk to others.

The solution: Do not multi-task when observing another person. Turn off the cellphone and laptop and pay attention to what they are saying and doing.

5. Communicate empathetically

When interviewing an FBI suspect, I always paid more attention to their body language than to the words they used. When there is a conflict between verbal and nonverbal cues, trust the nonverbal. They are usually more accurate.

I also noticed the voice tone of politicians, newscasters and friends to understand how they used their voices to express empathy.

The solution: Practice on yourself by noticing what you are doing nonverbally when interacting with others. Notice with whom you have difficulty being empathetic. Examine why.

6. Fake it, if nothing else

I was once put in a situation where I needed to develop rapport with a convicted child molester. The victim was his own daughter. However, it was necessary for me to act empathically to achieve the desired outcome. What is interesting is that, after several minutes, I actually started to feel some empathy toward the man as a result of “acting” empathic.

The need for you to develop rapport and show empathy with a child molester is remote, but you may need to win over a creep who is also an important client.

The solution: You can disagree, or even dislike, an individual and still be capable of understanding what they are feeling and thinking. Listening without judgment can also convey empathy. Communicate to them that you understand what they are experiencing. Practice empathy even when you don’t feel like it and it will help you become a more effective leader.

 

LaRae Quy was an FBI undercover and counterintelligence agent for 24 years. She exposed foreign spies and recruited them to work for the U.S. government. As an FBI agent, she developed the mental toughness to survive in environments of risk, uncertainty, and deception. Quy is the author of “Secrets of a Strong Mind” and “Mental Toughness for Women Leaders: 52 Tips To Recognize and Utilize Your Greatest Strengths.” If you’d like to find out if you are mentally tough, get her free 45-question Mental Toughness Assessment. Follow her on Twitter.

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to sign up.

How Bill Evans became an accidental entrepreneur

Lead Human
SmartBrief illustration

This is the latest in a series called Lead Human, which features interviews and profiles conducted by Elliot Begoun in search of answers to the question "What is it like to be a leader?"

Kalona, Iowa, is one of the largest Mennonite and Amish communities west of the Mississippi. For years, the agrarian community farmed in a very traditional manner, akin to today’s organic practices. Yet, at least for dairy, those practices were not being recognized in the price they were able to command. The community wanted to get the value from having a more natural, organic product while still maintaining their agrarian lifestyle.

The community came together, contributed money and started Farmers Creamery. Bill Evans first got involved to help with the finances. Little did he know he was about to become an accidental entrepreneur. He created the Open Gates Group that consists of nine agriculture related businesses, including Kalona organics, makers of Kalona SuperNatural brand, that support Kalona and its way of life.

How did this all start?

Bill Evans
Evans

Evans explained that the community didn’t want to abandon its farming roots.

“They just feel strongly about that from a family and a cultural standpoint. So, they came together, they contributed money, and we started with Farmers Creamery.”

“I got involved from a standpoint of putting together the finances but also started working on sales and marketing. I then established a company called Kalona Organics to do sales and marketing both for what was happening there at the creamery and other companies that would be small, emerging ag-based businesses. We built nine small companies all based around the ag business. They vary from processing organic dairy products to a trucking and logistics business.”

“I didn't realize that I was entrepreneurial. My background is finance and accounting, and you assume that that's the opposite,” he said with a slight chuckle.

“I didn't realize that I'd be employing those entrepreneurial skills. I just kind of stepped into it one step at a time. My idea wasn't to have nine companies. It just emerged and progressed that way.”

What’s your vision for the brand?

"We just purchased an iconic cheese factory that's in our community. It was once one of the top tourist attractions in our county, and we're redoing that and trying to start it up again.”

“We're introducing some new products this year. We need to broaden out the Kalona SuperNatural brand. Currently, we're strong in the greater Midwest, I'd say east of the Rocky Mountains, west of somewhere in Ohio area down to Georgia. In that area, we're doing well in natural foods. Our items that have longer shelf life need to get better established across the United States, and we need to look at expanding beyond natural food stores.”

What’s the biggest obstacle you’ve faced?

“There's a lot of obstacles; there's regulatory, there's manpower. One of the biggest obstacles is the whole distribution side of the business. We have a product that is short-dated, logistically you must get it there more frequently. Also, being a small player and being able to get a presence in big retailers like Whole Foods is very, very difficult. We need to do a better job of that.”

What would your current self tell your former self?

“Step out. Be a little bit more of a risk-taker. I think internally a finance and accounting guy is trained to look at worst-case scenarios and be prepared for it. I'd probably tell myself to just be who you are and be comfortable with that, and trust that your instincts are correct.”

What have you learned about connecting with and motivating people?

“Treat people right. That's one of our main guiding principles, and it's simple. But, if you're doing it from your heart, really believe in it, it's powerful.”

“People want to do things right. They want to have good relationships, they want to interact positively. We just need to get out of their way.”

What’s the best thing about entrepreneurship?

“Every day, I'm putting 100% in. Everything about who I am is engaged, I really enjoy that, because at the end of the day I know that I'm doing the very best that I can do.”

 

Elliot Begoun is the principal of The Intertwine Group, a practice focused on helping emerging food and beverage brands grow. He works with clients to design and execute customized route-to-market and go-to-market strategies that build velocity, gain distribution, and win share of stomach. His articles appear in publications such as the Huffington Post, SmartBrief, and FoodDive.

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have a dairy industry email, one of more than 200 industry-focused newsletters, all free to sign up.

When is the last time you unplugged for a few days and took a real break from work?

SmartPulse -- our weekly nonscientific reader poll in SmartBrief on Leadership -- tracks feedback from more than 220,000 business leaders. We run the poll question each week in our newsletter.

 

When is the last time you unplugged for a few days and took a real break from work?

  • This week: 13.7% .
  • Within the past month. 26.6%
  • Within the past quarter. 18.1%
  • Within the past year. 15.5%
  • I can't remember the last time. 26.1%

 

Mike Figliuolo is managing director of thoughtLEADERS. Before launching his own company, he worked at McKinsey & Co., Capital One and Scotts Miracle-Gro. He is a graduate of the U.S. Military Academy at West Point. He's the author of three leadership books: "One Piece of Paper," "Lead Inside the Box" and "The Elegant Pitch."

3 executive takeaways about culture from the Google mess

Is Google a progressive example of big data and stock-market performance or a hotbed of interpersonal bias and infighting threatening to distract itself from success?

After following the news swirling out of their firing of the engineer who wrote an internal manifesto decrying Google’s diversity campaign promoting women in tech, and diversity-correctness in general, it’s easy to make an argument for the distraction theory.

The sheer volume of press Google’s internal dustup has generated is also distracting for the rest of us, especially when combined with news about how systematic sexual discrimination and harassment played a part in bringing down former Uber CEO Travis Kalanick. These peeks into the seamier sides of corporate culture shine a spotlight on how difficult it is to create a diverse workforce that can harmoniously focus on the business.

We want to believe that our company culture supports our business objectives, but since research tells us that our own unconscious biases filter our views, how can we be so sure?

The typical executive is much more interested in fighting the business fire in front of them than they are wrestling with these cultural issues, and this has given rise to offices of diversity and instructions to the HR department to look into the problem. Unfortunately, these people quickly encounter a dizzying number of programmatic solutions with varying track records of success, many of which depend on whether the executives themselves reinforce their outcomes.

Also, unfortunately, the research itself does not proscribe definitive guidance to companies trying to do the right thing by shareholders and employees. Some research shows business benefits from gender diversity and other social factors while others find that cognitive diversity produces more results.

In my experience as an executive coach, change and culture consultant, these kinds of discussions around unconscious bias, diversity and company culture frequently give the executives I support a hall-of-mirrors queasiness. Despite holding power in the company, many leaders feel powerless to build a company culture where everyone can contribute their best. And, as these issues become more visible inside and outside the biggest companies in the world, it’s hard for leaders not to feel vulnerable to factors they don’t control, like whether your employees feel discriminated against.

Here is my advice to executives when you feel that flop in your stomach around cultural diversity.

Own your influence

You don’t control your employees’ feelings, but you have a larger effect on them than you may want to admit. Culture is the amalgam of everyone’s behavior, but if the average employee’s actions are a pebble dropping into the culture pond, yours are a boulder. How you treat people, in public and private, does more to create cultures that tolerate -- or don’t -- unquestioned bias, microaggressions and outright discrimination than anything else.

Don’t ignore your boulder and pass off the problem to anyone else. Own your influence in every choice you make about how you achieve results. Don’t pass the buck. Challenge your peers to do the same.

Build psychological safety into your leadership habit

One read of the Google engineer’s backlash against what he perceived as a too politically correct culture is that Google failed at creating the positive cultural dynamic it was responsible for identifying in the first place: psychological safety. People negatively polarize more easily against each other when they feel vulnerable to shame and blame.

When you remove the shame and blame, people’s positive contributions come more readily to the fore, contributing to more innovative and useful business outcomes. There’s a lot you can do, personally, to remove shame and blame from the company culture, simply by how you run your meetings and discussions, publically and privately. Become a master at creating psychological safety and show others how it’s done. Start now.

Co-opt the invisible hand of culture to create business success

Once you own your ability to help create a culture where psychological safety is the norm, you begin to access the power to wield the invisible hand of culture to produce business results. The reason it matters is that culture programs the organization’s default intuition for how to handle every decision, customer conversation and employee interaction. Culture takes your place in leading and providing direction when you’re not physically present.

If you want every employee to choose and reward actions that focus on, rather than distract from, the business’ success, then you need to become intentional about rooting out the behaviors that work against this dynamic. Certainly, shame, blame, discrimination and harassment fall into that category, but so do many others, and these are specific to your business. Learn what they are and help your people replace them with behaviors that support the growth and success you are personally committed to achieving.

Turn this cultural awareness and maintenance into an organizational habit and you’ll find the invisible hand of culture supporting you all along the way.

It’s easy to fall into fire-fighting mode instead of doing the introspective and important work of culture creation, but this is one of the key distinctions between an executive who is a true leader and one who just gets high on the adrenaline of dousing the latest blaze.

 

Dana Theus is president and CEO of InPower Coaching. An executive coach and change management thought leader, she cracks the code on personal power in the workplace. In addition to her private practice, Theus helps organizations bring emotionally intelligent coaching services to middle management through facilitation, consulting and group coaching. Follow her on Twitter at @DanaTheus and on LinkedIn.

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to sign up.

3 tips for discovering yourself

It is necessary to know what you are and what you can do. Sounds simple, but too often we don’t take the time – or, more precisely – make the time to understand our role.

In my coaching practice I work with executives to help them define their leadership selves. Here are three questions that can help you, too.

  • What do I do well? Consider your core competency -- what you do for your job. Then think about the skills you execute to complete your job duties. Beyond competency consider how you interact with people.
  • Where do I need help and why? Tough question, certainly. How well do you serve your team? Think about what you may be avoiding because you don’t want to do it, don’t like to do it, or feel incompetent in doing it?
  • How can I better serve my colleagues? Focus on what other people need from you. Are you fulfilling their needs? It doesn’t hurt, and in fact, it may be wise to check what you think you are with what others are receiving? Is there alignment?

These questions are thought-starters; they serve as a means to an end of discovering what you do best and how you can continue to do it.

 

John Baldoni is an internationally recognized leadership educator and executive coach. In 2017, Trust Across America named him a Top Thought Leader in Trust for the fourth consecutive year. Global Gurus ranked John No. 22 on its list of top 30 global experts, a list he has been on since 2007. In 2014, Inc.com named John to its list of top 50 leadership experts. He is the author of more than a dozen books, including his newest, “MOXIE: The Secret to Bold and Gutsy Leadership.”

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to sign up.

 

10 steps for a better 2018 sales compensation plan

While early in the second half of the year, it’s already time to begin thinking about sales compensation plans for 2018 (believe it or not).

Before beginning on the 10 steps below, it’s critical that the team understands the C-level goals for the sales organization. Ask:

  • What products and services are important for the upcoming year?
  • Do we have the right type of sales talent?
  • What are our 2018 financial goals?

Once the strategy is set, it’s time to dive in. Follow the 10 best-practices design steps below when designing or updating a sales incentive program to ensure your 2018 plans drive profitable growth for your organization.

  1. Determine First, consider the relevant labor market (and remember the market targeted for talent may be different than the market in which the business competes for customers). Target pay for each role will result in a target total compensation (TTC), which will be the starting value that will flow through the design of the incentive plan.
  2. Set "Pay mix" defines the proportion of salary and incentive at target performance, meaning performance to quota. The total of the salary and incentive at target should equal the TTC for the job. Pay mix will vary by job type and is driven by several factors that include sales process characteristics, types of sale and types of customers. For example, a role that is focused on new customer acquisition for mid-sized accounts will likely have more incentive pay as a percentage of TTC (perhaps 50% base salary and 50%  target incentive) than a role focused on current customer management for major accounts (perhaps 70% base salary and 30% target incentive).
  3. Establish upside potential. "Upside potential" is the incentive pay available to top performers, typically the 90th percentile, and is often determined as a multiple of target incentive. Upside is a critical component to help the organization attract and retain the best talent in its market. Define high performance for the organization, and make sure you differentiate incentive pay -- significantly -- between top performers and average performers.
  4. Establish performance "Threshold" refers to the entry point of achievement where the plan begins to pay incentive. Threshold usually represents the minimum acceptable level of performance, below which a rep would not typically stay employed with the organization.
  5. Develop measures and priorities. "Performance measures" define the focus areas that are most important for each role. Each measure should represent the most significant pieces of the sales strategy that the role can control. A challenge for many organizations is determining which few of many possible measures should be included in the sales compensation plan and which should simply be core expectations of that job.
  6. Set levels and timing. For each measure, the organization must define the level at which that measure will be tracked for the plan. For example, the organization may define a revenue measure for a sales rep at an individual level or a region level. Each measure will also be measured and paid on a certain timeframe, for example monthly or quarterly.
  7. Design. "Mechanics" create the connection between performance and pay and can be divided into three types. A rate-based mechanic (or, commission) usually pays a certain percentage of revenue or gross profit, or a certain dollar amount per unit of sale. A quota-based mechanic typically pays a target incentive for reaching a specific quota or goal and may scale its payout above and below that performance level. A link creates a relationship and interdependency between two measures or mechanics.
  8. Align the team. A full sales compensation program will include a range of sales, sales support and management roles. To work together as a team, plan designs must interface as a complete system. The program should promote teamwork; seek out points of potential conflict and try to resolve.
  9. Set quotas. Quotas are the linchpin between the sales compensation plan and performance. Quotas should be market-based and created with a process that’s well-understood by reps. Over time, quota processes for an organization will usually move from historically based approaches to more market-based approaches as the market and organization become more developed.
  10. Institute the governance process. A good governance process is like the constitution of the sales compensation plan. Without a clear approach to governance, the organization will probably create the governing laws throughout the year as it goes, sometimes in a reactive mode.

Operating the program throughout the year will draw from all the strategic connections made, components designed and governance established. From a tactical standpoint, technology may also be leveraged to track performance, administer pay and provide a communications portal for the reps and management.

Continue to evaluate the program throughout the year, drawing upon the dashboard and tools to monitor relationships between pay and performance, attainment of goals and differentiation of high and low performers. Track areas where improvements can be made, and then – before you know it -- get ready to start the process over again.  

 

Mark Donnolo has been a sales effectiveness expert for over 25 years and has worked with companies such as: IBM, AT&T, KPMG, Office Depot, and LexisNexus. He is also the author of "What Your CEO Needs to Know About Sales Compensation."

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to subscribe.

Stop Wearing So Many Hats and Watch Your Productivity Soar

Spreading yourself thin often leads to costly mistakes.

The gift of a leadership perspective

One of the most difficult things for leaders to achieve is proper balance between their demanding work schedule and their home life. Not only do we struggle to find the right time allocation for each, but we also need to be able to separate the two in a way that doesn’t blur the lines between our professional and personal realms.

This challenge is compounded when leaders encounter a situation that demands more than its “normal” time requirements, such as when work stresses spike or when something at home requires more of our time, energy and emotional bandwidth than usual.

This is exactly what happened to Brian Harper, CEO of Rouse Properties, a private real estate investment trust headquartered in New York City. (Rouse Properties formally debuted on the New York Stock Exchange in January 2012. It was acquired by Brookfield Asset Management and delisted in July 2016. It owns 38 malls in 23 states encompassing approximately 24.5 million square feet of retail space.)

Brian and his wife, Laleh, are the proud parents of Caleb, 11, and Zoe, 20 months. When Caleb was 2, he started to demonstrate genius qualities, such as his ability to memorize enormous quantities of detailed information. Despite this rare gift, it soon became apparent that Caleb was lagging in his growth motor skill and speech development. Subsequent testing determined that Caleb was autistic.

Naturally, such a diagnosis was shocking and devastating for the family. They didn’t know how to react, and their initial response was to keep the diagnosis private from family and friends while bringing Caleb to various forms of therapy to develop and maximize his potential. However, the more they began to understand autism, the more they realized they were going about it the wrong way by keeping Caleb’s condition secret from their loved ones, which Brian to this day feels terribly about. More on this later.

I learned a number of leadership tips from this conversation that I believe have wide benefit.

Learn to gain a new perspective

It’s easy to get down when circumstances don’t seem to go our way. Many of us start to see our glasses as half-empty and make excuses for our lack of happiness and/or productivity. When I asked Brian about the impact that Caleb has had on his family and role as a leader, however, he immediately began to talk about the blessing that his son has been to them all, such as their ability to become more caring and empathetic. There was no hint of shame, disappointment or wishful thinking, just joy, pride and optimism.

Identify and develop strengths

Harper‘s perspective helps him to see things differently at work, too. Just as Caleb has great strengths and significant challenges, each employee at Rouse excels in some areas more so than others. As Harper sees it, it is his job as leader to provide internal coaching and mentoring support to help his people shine and excel.

To this end, Harper looks for mentors who will give of themselves freely to nurture and support less-experienced or skilled employees. He also has shifted the company’s goal-setting and assessment process to quarterly rather than annually, which keeps the focus on growth and learning while raising the level of internal transparency about how people are evaluated. 

Be careful with your time

I asked Harper about how he is able to balance the demands of his personal and professional responsibilities. He responded by saying that he reflects meaningfully before each week, rigorously determining how to best to utilize his time. Though this means that he must often say "no" to requests for his time (such as solicitations to join corporate boards), he knows that these decisions free him for what he really needs to accomplish.

Choose your stressors

We all experience stress or things that upset us. In Harper’s case, he has chosen to take a potential stressor and transform it into a mission. He is more stressed about what many other parents of autistic children don’t have -- such as adequate access to resources to help their children -- than with his own situation. For this reason, he has joined the national board of directors of Autism Speaks and has assumed a leadership role within the organization (he will be hosting the upcoming Chef Gala in NYC.) He believes that too many parents and families are suffering in silence and deserve to be given the support -- financial as well as social -- that they need to best cope with their situations.

He learned a long time ago that mourning in silence is no way to go. Let others help you, which is exactly what helped Brian and his family through the initial shock of Caleb’s diagnosis.

Educate those around you

Just as a leader must inspire and educate their people, Harper feels that his role in creating greater awareness about autism includes helping the community at large (corporations, politicians, educators and others) better understand the condition and its impact. Many people, he said, look at an autistic child and see a whole person, thus failing to appreciate its impact on the child’s mind and body.

Think community

Leaders are responsible not only for individual success in the workplace but also to rally their people around a common goal and foster a sense of community. Harper said he hopes parents of autistic children do not follow in his family's initial footsteps but rather come to terms more quickly with their situations and become part of the broader community. Early intervention, he says, is the key to maximizing a child’s growth and success. While there remains much to be done to properly fund and support autistic children, many resources do exist that cannot be shared if families who need it worry more about the stigma associated with autism than with providing care to their children.

 

Naphtali Hoff, PsyD, (@impactfulcoach) became an executive coach and organizational consultant following a career as an educator and school administrator. Read his blog at impactfulcoaching.com/blog. Download a free chapter of his upcoming leadership book, "Becoming the New Boss."

If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better, smarter leader. We also have more than 200 industry-focused newsletters, all free to subscribe.