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What Contingent Liabilities are Your Employees Causing

What Contingent Liabilities are Your Employees Causing?

Rogue behavior costing $36 billion in legal bills since the financial crisis should give every Board member and Executive sleepless nights. Then add the cost to hire significant compliance and security management and staff to curb rogue behavior, and some serious questions need to be asked!

  1. What part does pressure to chase profitability encourage a greater level of risk to be taken?
  2. How much risk is the business willing to take? And at what level does risk become reckless?
  3. Is the level of inter-staff competitiveness so great that irresponsible risk is encouraged?
  4. How vigilant are those in leadership to the impact of pressure on employees?

Working in an environment pressurized to succeed at all costs, tends to be the norm, especially in the Financial Sector. Just look at Wells Fargo. Whilst taking risk is a legitimate part of building a successful business and keeping ahead of the competition, when pressure and risk collide it can quickly become a weapon in the wrong hands. Unable to balance risk under pressure to achieve results, the line becomes blurred between acceptable business practices and legal or moral improprieties.

Even more alarming, is when Boards and senior executives fail to acknowledge the environments that promote rogue behavior simply to increase profits. It could be argued that they are as culpable as the rogue employee. Daniel Kahneman, in his book Thinking Fast and Slow, says “we can be blind to the obvious, and we are also blind to our blindness.”

Prosecutions and regulatory enforcement stemming from noncompliance related to employee behavior such as corruption, bribery, rogue trading and insider trading are on the rise around the world. In fiscal 2015, the SEC filed nearly 7% more cases over the prior year, meting out $4.2 billion in sanctions.

People are hired for their talent but little attention is paid to their inherent personality. So when an individual is placed under significant pressure or pushed to take excessive risks, their behavior can turn rogue. The good news? When pressure and risk collide can now be predicted.

Using behavioral insights, management can dynamically match employees with specific environmental conditions to determine their potential response to risk and pressure. They can also discern the degree to which such responses could create rogue behavior and negative actions towards the business.

It is no longer enough to simply look at emails, computer keystrokes, outside influences, sick records etc. – the old hat of international espionage and anti-terrorist tools. What should be clearly understood is that the rogue employee is a human being, that when placed under significant pressure to achieve, will take risks.

The question to Boards and Executives is – do you know your employees?

What corporate entities have in their corner is direct and immediate access to their own personnel from top to bottom and every department – including even outside partners and vendors. So the solution is the deployment of a validated personality discovery process, providing hidden insights and a reliable prediction of where security or compliance risks exist.
Based on external research, employees with the following measurable behavioral traits are more likely to engage in rogue behavior when emotionally triggered

  1. An inventive mind, full of ground-breaking ideas turns their thoughts to curious and devious thinking when, as an example; many of their ideas are rejected.
  2. A go-getting, determined person, driven to success at any cost; begins to cut corners, as a toxic competitive streak takes over.
  3. A reticent, uncommunicative, taciturn minded person normally just seen as the quiet one’ begins to hold onto key information that others need, simply because they have taken offense over something trivial.
Which Employee is Your Molotov Cocktail2

DNA Behavior International’s validated system gets below the surface to reveal behaviors that, if not managed, can lead to ruinous behavior.
The Unique DNA Behavior Approach is able to Score, Filter, and Prioritize Employee Personality Insights.

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6 Steps for a Leader Hired to Change the Culture, a Case Study

CASE STUDY: 6 Steps for a Leader to Change the Culture of a Team, Remove Roadblocks, Adapt Communication and Improve Processes.

SITUATION: I was asked to consult a recently hired CFO help her team adapt to the significant changes needed to be made in how the team operated. Her team was perceived as not being as effective as they should be. Plus, the organization needed more reporting and more collaboration from her team.

She spent 6 months asking questions and evaluating feedback and was finally ready to unveil her vision and goals for the team to support the organization. Her wonderful presentation explaining her process and detailing her vision was everything you would expect from a true leader. But soon after, she didn’t see any of expected changes. So she started attending some of their meetings, and provided even more direction. Still, she had trouble getting people to engage and respond in the way that she expected. The changes weren’t happening fast enough and she wasn’t getting feedback to help her understand why.

CFO VISION: A finance “organization” that

        • Has fewer boundaries and fosters alliances
        • Embraces a talent development and succession planning system
        • Fosters financial investment which demonstrates return on value and/or investment
        • Guides and implements business plans driven by strategic plans and executed with annual budgets

EVALUATION: After meeting with everyone and having them take the Business DNA Natural Discovery personality assessment, the gaps in behavior and communication styles became clear. Addressing them, however, would not be so easy.

The CFO is much like a lot of leaders: a driven Initiator naturally inclined to be Fast-Paced and Spontaneous (see the table below.) She is good at logically focusing on and driving for results. She leads by instinct and quickly adapts in the moment. She prefers spontaneous discussions to talk about what to do in the moment.

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Her team of accountants, however, are like many in their field. They’re highly Planned and Anchored (see table below.) Their natural strengths are to be very thorough, detailed, analytical, and consistent. They want specifics on what would be covered in a meeting ahead of time so they can research and properly prepare. They need more concrete information on what is expected, in order to be able to follow the specific steps to meet a goal.

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You can probably see the challenge without me telling you. The leader and her team have completely different ways of operating and communicating. They don’t know each other well enough, yet, to trust one another or know how to adapt to each other’s style. And there was no time left to figure it out organically. “Forcing” the team to be like the leader simply wasn’t working, and this left everyone feeling stressed and overworked.

SOLUTION: Although this may seem obvious from a distance, when a person’s behavioral style is acutely ingrained from both a natural and a habitual /learned perspective, it can be incredibly difficult to change. It requires consistent encouragement and mental focus. It’s like being asked to write with our opposite hand. Unless we’re naturally ambidextrous, our writing will not be as good if we don’t intentionally try, and most of us will “absent-mindedly” default to our regular hand.

Key steps for this CFO / Team:

  1. CFO lead by example in acknowledging different behavioral strengths and styles and attempt to adapt.
    - Talk openly about the obvious differences and politely help each member learn how to reciprocate.
  2. Leader to give more specific, concrete examples of her vision, as in an agenda with pre-set questions, well ahead of meetings and ensure safe environment where questions and follow-up, are warmly welcomed.
  3. CFO provides more 1:1 time/check in points, or smaller meetings, to glean better information from the team and identify roadblocks.
  4. Leader to lay out the step-by-step “plan” for change, rather than abruptly making decisions without a chance for the team to absorb and adapt.
  5. Team to resist the urge to “do nothing different until the detailed steps are clearly articulated”, by asking questions, focusing on what steps they should stop doing / what steps they should start doing. “Plan” for expected changes.
  6. Hire a mediator to address the gap between the big picture, and the detailed steps to get there with the focus on removing roadblocks and process improvement.

RESULT: Through individual coaching, team sessions and practical suggestions on how to build adapting into their day-to-day lives, the team turned a corner and is operating more efficiently and effectively with less stress. Many of the tangible changes were put into motion and their internal customer survey feedback improved significantly. While it’s a conscientious effort to adapt, with time and practice, it becomes the new second nature.

For a free trial of Business DNA, please email inquiries@dnabehavior.com.

Are You Killing Productivity And Creativity

Are You Killing Productivity And Creativity?

I work with and coach many leaders and teams. Although each team is unique, there are some common themes I see as performance and productivity blockages.

Are you suffering from one of these?

Are You Killing Productivity And Creativity 1

1. You have to be good at everything. There are many smart, good people I talk with, who can’t admit that they aren’t perfect, or still believe they should be. Perfection is outdated and unattainable. Trying to be good at everything should be too. Plus, it will only highlight and put focus on tasks and skills where you are NOT so good. As a leader, stop expecting people to be good at everything. For example, few people walk the earth who are great at being both detail/task-oriented and engaging with people. Consider realigning tasks to people based upon their natural strengths. In the end, the team will get more done with less stress.

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2. Your way is the best way. If everyone was like you, your value would be diminished and the team would suffer from a huge blind spot. Instead, focus more on the goal and you’ll realize that the team will accomplish more. You’ll also look smarter and increase your influence by being able to see your teammates as valuable assets, even if they think and act differently, than your way of operating.

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3. You’re constantly aware of teammate’s imperfections and wish they would change their ways. Stop thinking that the other person is who needs to change. You can positively influence behavior by trying to understand the other person’s point of view, their strengths and how they are motivated.

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Want to learn more about how to identify and capitalize on the different strengths of your team members? Check out our Business DNA Website or contact us at inquires@dnabehavior.com.

Kill Me Its Another Meeting1

Kill Me It’s Another Meeting

Some meetings should never take place!! When the leader of the meeting has no control over them, they are a waste of time.

According to research from Harvard Business School and the London School of Economics, executives spend upwards of 18 hours per week – a third of their working week – in meetings. And with an estimated 25-50% of meeting time considered wasted. Source

11 million meetings are held in the United States each day on average. That adds up quickly to 55 million a week and 220 million a month. By the end of the year, the meeting total is well over a billion. Source: (accessed 4/18/15). – Dave Johnson, How Much do Useless Meetings Cost?, CBS MoneyWatch (February 16, 2012).

The most frustrating meetings are when the boss let’s those with the loudest voice have too much time. Even trying to shut them up (politely) just doesn’t work. Then there’s the person in the room whose whole body language says, I know best; no one else’s opinion matters’. What about the colleague who has plenty to say on the way to the meeting, and just sits there and says nothing in the meeting. Poorly run Meetings are an expensive waste of time

Kill me its another meeting2.jpgSource: Google images www.annmarieklotz.com

Howard is compliant, hesitant and diplomatic. He is well liked and respected among most of his team and peers. But when leading staff meetings, Howard fails to control difficult people who upset the balance of the meeting and leave most of the remainder of the team wishing they were somewhere else.

The discussions tend to be unbalanced and very little gets resolved or decide upon.

Phil is the CEO and on one occasion sits in on the team meeting. He senses the atmosphere has no healthy positive energy; it’s heavy and negative; people are frustrated and deflated. Nothing is agreed. Phil knows he needs to work with Howard to improve his leadership skills.

Phil is goal driven, ambitious and yet understands the impact of knowing how to communicate with a range of people. Phil appreciates the importance of getting results through people management and strong strategic leadership.

Using his own experience as an example, Phil talks to Howard about how he felt when leaving the meeting. He explained that Howard needed to change the dynamic of the meeting in order to ensure people didn’t leave feeling frustrated, deflated and lacking a sense of direction. Phil explained to Howard the relevance to his leadership style of understanding behaviors. Further, he talked about the significance of becoming more effective and efficient in terms of managing individual communication styles. He explained that leadership required a person to adapt their own behavioral style to build relationships and meet the performance needs of a specific situation and in this scenario to manage meetings more effectively.

Four Primary Communication Styles Graph

Communication Differences Relationship Performance

Had Howard understood the dynamics and communication styles in the room and gained insight into his own communication and behavioral approach, he would have known how to manage individuals and control the meeting. Phil used examples of how he should be communicated with to help Howard understand communication styles. He then contrasted that with how Howard would wish to be communicated with. Very quickly Howard realized that he needed to gain insight into understanding communication styles if his meetings were to be effective in the future.

Howard

  1. Allow a short time to discuss family, life and non-work issues upfront
  2. Communicate at a slower pace and do not make them feel pressured – keep it even
  3. Have office meetings in a more living room environment
  4. Show with empathy that you care about their well-being and desire the best outcome for them.
  5. Give them step-by-step instructions to avoid any feelings of chaos.
  6. Provide lower end estimates of returns and keep them diversified
  7. Communicate security and the safety buffers
  8. Ask them how much contact they would like with you and what type (email, phone etc.)
  9. Indicate your feelings about the recommendations and get them to discuss theirs
  10. Invite them to group workshops and demonstrate how solutions work

Phil

  1. No long stories, keep to the point
  2. Keep meeting agenda short and focused
  3. Prioritize objectives around their goals
  4. Start with the big picture, not too much detail on one part of it
  5. Lay out the options so a decision can be made
  6. Provide bullet points
  7. Clearly outline risk/reward from best and worst case scenario
  8. Ask for their thoughts on recommendations
  9. Ask how involved they want you in the planning process
  10. Recognize them with referrals to other influencers
Investment Committee integrated graphic blank

Investment Committees through the Behavioral Intelligence Lens

Most investment committees have a very clear mission: Serve as stewards for assets of the organization they represent.

Recruiting the right people to do that is critical to the success of the Investment Committee. But how do we define “right”? Is it a professional background? Education? Investment knowledge? And where does the diversity lens come in, if at all? What about their inherent risk-tolerance and behavioral biases toward investments?

In a study by Vanguard’s Vanguard Investment Counseling & Research on Group Decision Making for Investment Committees, there are definitely biases (both investment behavioral biases and workplace behavioral style differences) that should be considered when forming a committee with such important responsibilities in an organization.

Group Decision Making for Investment Committees Source: Vanguard Research

Most investment committees focus on five critical decision-making areas:

  1. Establishing goals or objectives for the investment portfolio they are managing.
  2. Setting an investment policy-on everything from strategic asset allocation to rebalancing policy to performance metrics.
  3. Selecting managers to implement the portfolio’s investment policy.
  4. Evaluating short- and long-term investment performance-both for the portfolio and for individual managers.
  5. Selecting experts (e.g., a consultant) to guide the committee as necessary.

As you think about how your committee recruits and selects new members, are you making the most of the opportunity to broaden the search to include those who would bring a diverse and beneficial perspective to the group?

As the research shows, this can lead to a more effective team and, in turn, a better outcome for the committee’s main mission.

Using a Behavioral Finance approach can shed light on the risk-tolerance and behavioral bias of the Investment Committee Members who may possibly be more wired for a Newness Bias or the More Anchored Bias. There are several behavioral biases that can either create conflict for the Investment Committee or potentially a group-think bias that could create risk for the firm.

In selecting an expert to guide the committee as indicated in bullet point 5 – Selecting an Expert, using a behavioral discovery process can add a dimension of behavioral diversity to the important function of the Investment Committee by ensuring the group can function collaboratively and effectively while also preventing “Group think.” Find out more on using Behavioral Intelligence and how to recruit the right behavioral fit for this important role in the organization.

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How Do I Get People to Listen to Me?

Do you understand the words that are coming out of my mouth?

1998 Rush Hour movie starring Jackie Chan and Chris Tucker

How many times have you been in a situation where you were trying to communicate with someone and it felt you might as well have been talking to the wall? I remember explaining a concept to a client using a PowerPoint and the client didn’t hear a word I said because he was focused on how he didn’t like the color scheme on the slide.

60% of communications fail because communication styles and preferences are not aligned. Based upon 1999 Stanford Research study.

Our brains are hard-wired to process information and learn a certain way. Most people accept this by now due to the volume of research on the topic. However, we can learn how to adapt to different communication styles to increase our effectiveness.

Sales increased 17% just by a salesperson mimicking the communication style of a potential customer. Harvard Business Review

Our research has identified that most people have one of 4 primary communication styles: Goal-Setting, Lifestyle, Stability and Information. There is a lot you can learn about people and how their brain processes information:

  • Learning Style
  • Communication Preferences
  • Information needs for Decision-making

Iceberg picture

With this knowledge, you can make some simple adjustments to how you approach a person to help them absorb the information, understand why your communicating and ensure they take away the points you feel are important (the ability to influence them.)

8 Simple Tips to Adapt Your Communication Style for Others:

If you are interacting with a Goal-Setter primary communication type:

1. Start with the End Goal in Mind – What is the purpose of the interaction and how does it connect to your audience’s goal (what’s in it for them?) Use bullets and executive summaries to convey more information with fewer words. Details can be provided after the summary if needed, but Goal-setters don’t read long emails/blogs or sit through long presentations.

2. Provide Options – If you only give them one recommendation or option, you will most likely get pushback or a “no.” They want to be able to make a choice. They will likely want to discuss it.

If you are interacting with a Lifestyle primary communication type:

3. Explain Who is Involved -Being more relationship-focused, their brains first have to understand who is involved, their role, how they fit into the discussion and what they may think about it. They also respond well to social events and informal communication methods.

4. Use Visuals – Rather than send a long email or written instructions use a picture, infographic or demo to better help their brains process the information and retain it. They need to experience it to learn.

If you are interacting with a Stability primary communication type:

5. How You Say It Matters – The right tone is especially important for this group. They prefer supportive and low-risk interactions and solutions. Email may not be the best choice, but if you do send an email, be very careful to consider them as a person and how they might perceive it or “feel” about it.

6. Slow Down and Reassure – They like to be thorough and appreciate step-by-step instructions. They want to be very comfortable and sure of their actions before they act.

If you are interacting with an Information primary communication type:

7. Stick to the facts – They prefer to primarily focus on tasks/results and do not necessarily want a lot of social interactions. They tend to be logical, want to “get to the truth,” and understand “why,” therefore, they are more comfortable when they have more details, information, and research.

8. Don’t Try Appealing to their Emotional Side – I repeat, stick to the facts, policies and procedures, and the logical explanation. If you try to sway them with name-dropping, leverage office politics, oversell a concept with marketing hype or appeal to their emotional side, you will actually repel them, not influence them.

What’s your communication style? For more information on the research, how it works, or how to apply this knowledge, contact inquiries@dnabehavior.com.