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Leading the High Energy Culture
What the Best CEOs Do to Create an Atmosphere Where Employees Flourish
By David Casullo
The McGraw-Hill Companies, Inc.Copyright © 2012David Casullo
All rights reserved.
The Power of Resonance
Resonance is the effect produced when the natural vibration frequency of a body is greatly amplified by reinforcing vibrations at the same frequency from another body.
—Webster's New World Dictionary
There is something magical about hearing a symphony orchestra perform. Have you ever marveled at how a well-composed and well-played piece can penetrate your very soul? Although I am not a musician, past—and sometimes painful—endeavors to try to become one have given me an appreciation for music as well as for the enormous skill and practice required to play something pleasing to the ear.
Consider for a moment how multiple instruments, played well at the same time, create an effect that exceeds their additive value. The combination of sounds creates something so powerful that it engages the ear, yet finds its way to our soul and energizes our very emotional makeup. How does this happen?
Two musical instruments, a violin and a clarinet, help to shed light on this phenomenon. If the violin at any moment is playing a specific musical note, the sound it produces is related to the natural frequency of the note. If the clarinet plays the exact same note with the corresponding same frequency, the resulting sound will perfectly synchronize the two sources, providing a pleasing example of resonance. Extrapolate this to an entire orchestra playing a symphony, and resonance plays a major role in the sound and effect it produces. It is important, of course, to recognize that the pleasing effect of resonating instruments is greatly enhanced by the genius of the conductor, the composition of the score, and the talent of the musicians playing the instruments. If we apply this orchestral analogy to a business organization, the conductor equates to the CEO, the composition of the score to the business strategy, and the musicians themselves to the people in the organization charged with the responsibility of executing the business strategy.
When the economic crisis struck the United States in 2008, I was one of many executives who wondered how my company would weather the challenge. At the time, I was the senior vice president of human resources for Raymour & Flanigan, a rapidly growing giant in the retail furniture industry.
From an outsider's perspective, it probably looked bad for us. While everyone needs furniture, it's not as if we were selling food or medicine. Furniture is a classic discretionary purchase. With consumer confidence plummeting along with the Dow Jones Industrial Average, it would have been understandable if our organization suffered through this era as well.
That never happened. Despite the fact that we worked in a languishing industry and faced the most challenging economic conditions since the Great Depression, we marched forward with our quest to grow the business from $250 million to $1 billion in sales. We continued to gobble up market share in every major city we moved into, including Philadelphia and New York. Perhaps most impressively, we had lenders clamoring to provide us with capital at a time when debt financing in our industry was basically nonexistent. Confronting our greatest moment of truth as a leadership team, we remained united in moving toward our common goal. We wanted to make the company the best retail furniture company in the country, and we never wavered despite the adversity.
In addition to being a career highlight for me, this turned out to be a profound learning experience. How did we do it? As I sift through my memories of those days like a California gold rush miner, two precious nuggets stand out: leadership and energy. And you can't have one without the other.
We had several great leaders in our fast-growing retail furniture organization. At the top of the list was Neil Goldberg, the CEO and my boss. From the moment I met him, I sensed that there was something special about him. His reputation as a gifted business leader preceded our first meeting, but as I got to know Neil, it was clear that his talents and his character were understated. Although Neil was extremely humble and eschewed public recognition, an aura of energy radiated from him.
Neil's energy proved to be contagious. Its dynamic force affected all aspects of the business. It inspired our logistics experts to reinvent their spoke-and- wheel model, resulting in enormous cost savings. It pushed our sales and marketing gurus to keep consumers coming into our stores when they had plenty of justification to stay home. In my area, the infectious energy resulted in the creation of a Leadership Development Institute that ultimately helped us bottle the secret sauce of our success and use it to drive our leaders' values from headquarters into every storefront across the company.
We celebrated our successes, but this vital energy also kept us hungry. We were winners on a winning team, but our Rally Cry was "Raise the Bar," as our passion was to see how much better we could be as a company. Neil's energy permeated our own, aligned us, and amplified through us, creating an energized culture.
Neil had a giant photo of basketball legend Michael Jordan, palming a basketball with each hand, hanging in his office. If you were a new executive leader at Raymour & Flanigan and were important enough to have a seat at Neil Goldberg's table, he'd say, "You know why I have that up there?"
And people would say, "Sure. It's because Jordan was the icon of being the best. He's a winner."
"It's not just that," Neil would say. "It's because every time he walked on to the basketball court, he raised everybody's game around him ... whether he was feeling 100 percent or 50 percent. Didn't matter. Everybody played better around Michael Jordan, and that's what leadership is all about."
And Neil consistently lived up to those words. I remember one time: It was before the recession, but there were major economic issues brewing that led to many failures in the furniture industry. The Mom and Pop stores no longer had the critical mass. The big nationals were run by financiers who were driven by numbers. They were out of touch with what customers really wanted.
Over the previous two years, we had already doubled our revenues from roughly $250 million to about $500 million. Anybody would be happy with that. Well, Neil assembled the executive leadership team at a bar in Connecticut and said, "I want to penetrate metropolitan New York."
It was a crazy idea. It was the middle of the recession, and we're going into the most competitive market there is? We were exhausted. We all looked at each other. One bold colleague was brave enough to say, "Neil, have you thought about this?"
Now, Neil's style was to listen. What were the risks? Why wouldn't we do this? So from each of our perspectives, we all explained what the risks were. For my part, I told him our human resources were already spread too thin. We didn't have the bench strength, and I wasn't sure the culture that had made us successful outside of metro New York would work its wonders within metro New York. My assumption turned out to be wrong, which taught me a great deal about what can be overcome when you're working in a high-energy culture.
Neil heard everyone out. Then he smiled, looked down at his drink, and said, "I appreciate all your opinions, and I respect every one of you ... but we're going in."
So after three scotches, I walked out of the bar. And despite the drinks, I remember very clearly thinking, "Man this is nuts ... but all right ... bring it on!"
Neil Goldberg was successful because he raised the game of everyone around him. That's a core definition of what great leaders do to energize their teams. Neil was not afraid of taking risks. He knew that you can only take risks of that scope if you're surrounded by the right people and if you're the kind of leader who raises everybody's game. Neil Goldberg was that kind of leader.
Now I look back and marvel at how we overcame such overwhelming odds and reached $1 billion in sales—"we happy few" as Shakespeare's Henry V said while reflecting with his small band of vastly outnumbered underdogs after they defied the odds to defeat the French in the Battle of Agincourt.
A TWENTY-FIRST-CENTURY ENERGY CRISIS
When I became the president of Bates Communications in 2010, I embarked on a series of conversations with executives from great organizations across the country. Frequently, I heard of companies at which individuals had risen in the ranks due to their technical brilliance and impressive individual accomplishments. Now, though, they had reached a point in their careers where their technical skills had taken them as far as they could go. At this crossroads, they needed to be transformed into powerful leaders who could inspire people, energize their culture, and get results.
Many organizations now face what I would describe as a twenty-first-century "energy crisis." The one I'm referring to has nothing to do with the price of oil, though. While the economy has bounced back to some degree, many leadership challenges have become magnified and elevated in importance, particularly as workforces have been trimmed to the bone and leaders taxed to their limits. A major one is in the area of employee engagement.
Employee engagement is not the same as job satisfaction. According to Scarlett Surveys, "Employee engagement is a measureable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn and perform at work." Engaged employees truly care about the company and feel a connection to it. As a result, they are willing to invest the energy to be great instead of having the attitude that it's "good enough to be good enough."
Gallup conducts research on employee engagement, asking 12 questions revolving around employee perceptions. Here are the themes that the questions cover:
* Having clear expectations and everything needed to do the best job every day
* Feeling that leadership cares about employees as people and is interested in their professional development
* Getting recognized for good performance
* Having a voice
* Feeling a sense of purpose
* Working among people who want to do quality work
So how are we doing as a nation with employee engagement? Consider this startling data from a September 2010 Gallup poll:
* At world-class organizations, the ratio of engaged to disengaged employees was roughly 10 to 1.
* At average organizations, that ratio was just about 2 to 1.
* Disengaged employees cost U.S. companies roughly $800 billion in productivity annually.
* Engaged organizations have 3.9 times the earnings-per-share growth rate compared with that of organizations with lower engagement in their same industry.
The accompanying report noted that "the best-performing companies know that an employee engagement improvement strategy linked to the achievement of corporate goals will help them win in the marketplace." So creating a high-energy culture is not just a feel-good enterprise. It's a crucial differentiator between the best companies and those that are average ... or worse.
CREATING A HIGH-ENERGY CULTURE
One of the challenges in leading the high-energy culture is that an organization's energy is not always easy to assess. Sometimes energy is like a mirage in the desert: From a distance, it seems to be there, only to dissolve upon closer inspection. At other times, an organization is more like a beehive: From the outside, it seems like not much is happening, but look inside and you'll see a stunning display of interdependent roles and purpose-driven behavior.
According to the laws of physics, energy can never be created or destroyed. It can build up in one place and dissipate in another. It can be a productive or destructive force. Music is but one example of the importance and power of resonating energy. It provides insight into the natural order of energy transmission that applies to the way a high-energy culture works. High-energy cultures are those in which the leaders reinforce the natural vibration frequency of the people in the organization. As a leader, you must understand the power of resonance if you are to create a high-energy culture. Like the conductor of the symphony orchestra, it is incumbent on you as a leader to act in a way that synchronizes the rhythms of your associates and amplifies the frequency of their natural vibrations.
In one sense, organizational energy is like a loose live wire: If you handle it carefully and plug it in appropriately, it's a source of power. Mishandle it, and you'll receive a painful jolt!
On the other hand, nature demonstrates that powerful occurrences are not necessarily a function of brute force. A simple, common example of this is a child pushing another child on a swing. Much like a pendulum, a swing has a natural frequency of oscillating motion. The natural frequency (the number of complete cycles back and forth in a given time interval) is directly related to the length of the swing. However, the height the swing reaches at the endpoint of each back-and-forth movement is directly related to the timing of the force applied to the swing. Thus, if a very strong adult pushes the swing at a random frequency to the natural cycle of the swing, the swing varies in the height it achieves. But if a child pushes the same swing with a frequency equal to the natural frequency of the swing, thus achieving resonance, the height, or amplitude, increases greatly. At resonance, relatively little effort is necessary to obtain a greater height. A child pushing a swing in sync with the natural frequency of the arc can cause the swing to go higher than can a full-grown muscular adult pushing a similar swing out of sync with its natural frequency.
As I reflect on the leaders I've known personally—as well as those that I've researched for this book—one common trait is that all of them have earned an on-the-job Ph.D. in what we could call "organizational energy." They seemed to know the exact force and timing to "push the swing" that is their organization. They create an atmosphere where their employees flourish, and their words and actions have an energy that resonates with everyone that they encounter. Why should you, as a successful leader, consider the importance of resonance as you plan and decide how you will drive increasing value into your organization? How does creating a high-energy culture in your organization translate into economic returns?
Energy and persistence conquer all things.
—Benjamin Franklin, American Patriot, Diplomat, and Inventor
A Diamond Engagement Ring
Great leaders recognize the power of their resonating energy, and they have the courage to act on an irrepressible desire inside of themselves. As a result, in our era of disengagement, these traits make them valuable commodities. Unfortunately, they are very rare commodities, too. Why?
It's not because only a few people are blessed with a certain gift that others simply do not possess. Quite the contrary: My own experience as a successful business leader, as a student of leadership, and as a coach who has helped develop leaders with enormously powerful and economically valuable intrinsic energy refutes that. The work we did in the Leadership Development Institute we created—where we researched, studied, identified, clarified, and mapped the steps necessary to spawn this energy within other leaders and within an organization—absolutely proves that armed with the knowledge, clarity of purpose, and commitment to become the best, you possess this capability.
My experience has convinced me that anyone dedicated is capable of becoming a truly great leader because each of us has this potential inside.
I don't just mean those leaders with an impressive job title. I'm talking about being any leader who:
* Energizes those around her through making her internal energy contagious
* Communicates clearly, with purpose and passion
* Behaves consistent with her own personal beliefs and values
When this energy is focused and transferred through powerful communication, the organization around this type of leader becomes powerfully charged. This translates into real economic value in the form of steep growth, market-share dominance, and benchmark bottom-line results.
Leaders who possess this energizing quality are rare only because few people understand how to tap the power of the energy that already exists within them and how to use it to inspire and invigorate those they lead: their teams, their department, and their entire organization. This atmosphere of energy that bonds an impassioned, authentic leader and those who choose to follow her is what I call the high-energy culture.
To put it another way, every organization has a healthy number of unpolished diamonds in its ranks. At a glance, these diamonds don't yet have what it takes to sparkle and shine as leaders. But with time, effort, education, patience, and persistence, it's possible to polish these rough gems and place them in the right setting—some place where anyone can see their allure and value. And when you have an organization loaded with diamonds, imagine the impact! And by the way, a diamond is always a good sign of engagement.
A Prerequisite for the High-Energy Culture
While we absolutely can turn rough diamonds into polished gems, no organization can turn a hunk of coal into a diamond. That's not necessarily an impossible feat, but it requires more time, patience, and resources than most organizations are willing to or can afford to invest.
Great leaders have an enormous impact because they tap into the same truths in others that motivate them. Research, experience, and intuition all support the proposition that organizations flourish on the overt, collective self-motivation of each individual. Jim Collins, leadership researcher and author of Built to Last and Good to Great, explains the relationship between companies that are ultra successful and the significance of motivation. "[Companies that make the change from good to great] don't motivate people—their people are self-motivated."
Collins postulates that the most important thing a leader can do is to get the "right people on the bus." Underlying this is the principle that all greatness within companies begins and ends with people. The key question is not what motivates people; rather, it is what "self-motivates" people.
For decades, behaviorists maintained that motivation was externally influenced, using rewards as stimuli. Picture the mouse that learns to press a bar in a cage to receive a food pellet. However, humans aren't so simple. More recently, pioneer psychologists such as Edward Deci and Richard Ryan have begun to reject this long-held belief through their research in the area of self-determination theory (SDT). SDT holds that "motivation develops inside us, and is grounded in our basic human need to develop our own skills and capacities, to act of our own accord (freedom), and to connect others and our environment." This motivation is called intrinsic motivation.
Excerpted from Leading the High Energy Culture by David Casullo. Copyright © 2012 by David Casullo. Excerpted by permission of The McGraw-Hill Companies, Inc..
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