Management and Leadership – Page 3

Microsoft Ends its “Stack Ranking” Forced Ranking System

Microsoft

Per the following memo from Lisa Brummel, the head of human resources, Microsoft is ending the “stack rank system,” Microsoft’s adaptation of the forced ranking performance management system.

To Global Employees,

I am pleased to announce that we are changing our performance review program to better align with the goals of our One Microsoft strategy. The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company.

This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact. We have taken feedback from thousands of employees over the past few years, we have reviewed numerous external programs and practices, and have sought to determine the best way to make sure our feedback mechanisms support our company goals and objectives. This change is an important step in continuing to create the best possible environment for our world-class talent to take on the toughest challenges and do world-changing work.

To learn more about the new approach to performance and development, please join me for a Town Hall today at 2:00pm PT, either in person in building 92 or via webcast (see details below).

Here are the key elements:

More emphasis on teamwork and collaboration. We’re getting more specific about how we think about successful performance and are focusing on three elements — not just the work you do on your own, but also how you leverage input and ideas from others, and what you contribute to others’ success — and how they add up to greater business impact.

More emphasis on employee growth and development. Through a process called “Connects” we are optimizing for more timely feedback and meaningful discussions to help employees learn in the moment, grow and drive great results. These will be timed based on the rhythm of each part of our business, introducing more flexibility in how and when we discuss performance and development rather than following one timeline for the whole company. Our business cycles have accelerated and our teams operate on different schedules, and the new approach will accommodate that.

No more curve. We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget.

No more ratings. This will let us focus on what matters — having a deeper understanding of the impact we’ve made and our opportunities to grow and improve.

We will continue to align our rewards to the fiscal year, so there will be no change in timing for your rewards conversation with your manager, or when rewards are paid. And we will continue to ensure that our employees who make the most impact to the business will receive truly great compensation.

Just like any other company with a defined budget for compensation, we will continue to need to make decisions about how to allocate annual rewards. Our new approach will make it easier for managers and leaders to allocate rewards in a manner that reflects the unique contributions of their employees and teams.

I look forward to sharing more detail with you at the Town Hall, and to bringing the new approach to life with leaders across the company. We will transition starting today, and you will hear from your leadership in the coming days about next steps for how the transition will look in your business. We are also briefing managers and will continue to provide them with resources to answer questions and support you as we transition to this approach.

I’m excited about this new approach that’s supported by the Senior Leadership Team and my HR Leadership Team, and I hope you are too. Coming together in this way will reaffirm Microsoft as one of the greatest places to work in the world.

There is nothing we cannot accomplish when we work together as One Microsoft.

Lisa

The forced ranking system has always been controversial. In theory, there isn’t anything wrong with concept of ranking the performance of people along a bell-curve and using this distribution to decide merit awards and promotions. What’s wrong is that employees learn to game the system and turn it into a political exercise. Brownnosing, politicking, favoritism, bias, and discrimination trump authentic performance and consistent teamwork. The system fosters a competitive environment in a way that counters to team work and business goals.

Yet another upshot of the forced ranking system is that the system acts as deterrence to making drastic career moves and risk-taking on their job by incentivizing employees to settle into their current functions in their current group and take no significant risks in how they go about their work. The forced ranking system informally guarantees that the longer an employee’s tenure in a particular group, the higher the employee shall be ranked because the incoming employee knows the ropes. Employees moving into a group or function are often ranked lower until they warm up.

The HP Way: Bill Hewlett and Dave Packard’s legendary management style

Bill Hewlett and Dave Packard

Bill Hewlett and Dave Packard, two graduates of electrical engineering from Stanford University, started Hewlett-Packard (HP) in Packard’s Palo Alto garage with an initial capital investment of US$538. Initially, the company was unfocused and worked on a wide range of electronic products for industry and agriculture. HP incorporated on August 18, 1947, and went public on November 6, 1957.

Bill Hewlett and Dave Packard made the HP Way official in the year 1957 when the company went public. With the company expanding in leaps and bounds, the founders recognized the need to enlist a set of company objectives to channel the efforts of divisional managers. In forming the HP Way, Hewlett and Packard had a broader foresight of bearing in mind that profit is an enabler of various other valuable objectives, including employees and corporate citizenship.

In the words of Bill Hewlett, the HP Way is “a core ideology … which includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity.”

Bill Hewlett and Dave Packard’s legendary management style, which came to be known as the HP Way, has been the topic of many case studies by ivory-tower professionals, management theorists, academics, and Wall Street professionals. The tenets are as relevant today as they ever were.

We have trust and respect for individuals. We approach each situation with the belief that people want to do a good job and will do so, given the proper tools and support. We attract highly capable, diverse, innovative people and recognize their efforts and contributions to the company. HP people contribute enthusiastically and share in the success that they make possible.
We focus on a high level of achievement and contribution. Our customers expect HP products and services to be of the highest quality and to provide lasting value. To achieve this, all HP people, especially managers, must be leaders who generate enthusiasm and respond with extra effort to meet customer needs. Techniques and management practices which are effective today may be outdated in the future. For us to remain at the forefront in all our activities, people should always be looking for new and better ways to do their work.
We conduct our business with uncompromising integrity. We expect HP people to be open and honest in their dealings to earn the trust and loyalty of others. People at every level are expected to adhere to the highest standards of business ethics and must understand that anything less is unacceptable. As a practical matter, ethical conduct cannot be assured by written HP policies and codes; it must be an integral part of the organization, a deeply ingrained tradition that is passed from one generation of employees to another.
We achieve our common objectives through teamwork. We recognize that it is only through effective cooperation within and among organisations that we can achieve our goals. Our commitment is to work as a worldwide team to fulfill the expectations of our customers, shareholders and others who depend upon us. The benefits and obligations of doing business are shared among all HP people.
We encourage flexibility and innovation. We create an inclusive work environment which supports the diversity of our people and stimulates innovation. We strive for overall objectives which are clearly stated and agreed upon, and allow people flexibility in working toward goals in ways that they help determine are best for the organization. HP people should personally accept responsibility and be encouraged to upgrade their skills and capabilities through ongoing training and development. This is especially important in a technical business where the rate of progress is rapid and where people are expected to adapt to change.

For Bill Hewlett and Dave Packard’s legendary management style and the history of Hewlett Packard, read ‘Bill & Dave: How Hewlett and Packard Built the World’s Greatest Company’ by Michael S. Malone and ‘The HP Way: How Bill Hewlett and I Built Our Company’ by David Packard.

Behavioral Interview Questions by Competency: Assertiveness

Behavioral Interview Questions: Assertiveness

Assertiveness is the ability to maturely express one’s feelings and opinions in spite of disagreement; accurately communicate to others regardless of their status or position.

Behavioral Interview Question: “Some of the best business ideas come from an individual’s ability to challenge others’ ways of thinking in a mature way. Tell me about a time when you were successful in challenging others’ ideas. What does this say about your ability to be assertive?”
Evaluating the candidate’s answer: Did the candidate honestly, persistently, and tactfully challenge the other person’s idea? Was there aggression/anger/abuse or withdrawal/dependency/ submissiveness?
Behavioral Interview Question: “It is realistic to say that no job is completely free of conflict. Tell me about a time when you were able to express your opinions maturely in spite of disagreements or objections.”
Evaluating the candidate’s answer: Did the candidate directly state an opinion without having been abusive/harsh/apologetic/defensive? Was there an emotional expression of an opinion or failure to express an opinion to avoid conflict?
Behavioral Interview Question: “Some situations require us to express ideas/opinions in a very tactful and careful way. Tell me about a time when you were successful with this particular skill.”
Evaluating the candidate’s answer: Did the candidate communicate with clarity and directness, and without evidence of negative feelings? Was there evidence or expression of negative feelings such as aggression or withdrawal, which interfered with effective communication?
Behavioral Interview Question: “Describe a time when you had to sell an idea to your boss, authority figure, or technical expert.”
Evaluating the candidate’s answer: Did the candidate make an honest, well-planned presentation including benefit statements, responses to objections, and guidance to a decision? Was there dislike for selling an idea, dishonesty/distortion, and/or either withdrawal/passivity or bragging/pressure?
Behavioral Interview Question: “Describe a time when you communicated something unpleasant or difficult to say to your manager or work team. How did you assert yourself?”
Evaluating the candidate’s answer: Did the candidate accurately and tactfully express a fact/opinion on a sensitive/important issue? Was there avoidance of an issue, passive aggression, and/or an aggressive/tactless presentation?
Behavioral Interview Question: “Give me an example of a time when you had to be assertive in giving directions to others.”
Evaluating the candidate’s answer: Did the candidate give firm, clear direction, perhaps with concern for another’s feelings? Was there an emotional reaction such as anger or anxiety?
Behavioral Interview Question: “Tell me about a time when your job required you to say, maturely, how you really felt about a situation. What did you say and how did you say it?”
Evaluating the candidate’s answer: Did the candidate present a feeling honestly and tactfully? Was there a negative feeling such as anger/ fear/anxiety/depression that interfered with mature communications?
Behavioral Interview Question: “Sometimes it is important to disagree with others, particularly your boss or team members, in order to keep a mistake from being made. Tell me about a time when you were willing to disagree with another person in order to build a positive outcome.”
Evaluating the candidate’s answer: Did the candidate disagree tactfully and in a timely fashion, balancing the need to communicate an opinion/ information with respect? Was there avoidance of disagreement or a tactless presentation?

Four Questions Every Mentor Must Ask

Mentoring

When mentors ask the following five questions in the order presented below, they can precisely form an effective analysis of the mentee and therefore can provide specific, practical guidance.

Question 1: “What are your passions? What do you want to be? What are your aspirations? What do you want to do?”

Enthusiasm is what separates good purposes and opportunism from true achievements. Professionals who pursue exceptional possibilities for their career are passionate about their objectives and persistent in pursuing their goals. Many professionals have good ideas, but only a few are dedicated enough to put themselves on the line for their passions and work hard towards their goals. Understand how your mentee defines success. Employees perform better in their jobs when they are doing what they believe matters and work towards their goals and objectives.

Question 2: “What are your strengths? What has enabled you to be successful in the past? What skill sets do you possess that will help you get where you want to be?”

Very often, leadership traits and skills tend to come together in steady patterns. Exceptional leaders with strong technical backgrounds are often also good at building relationships with the people around them, developing teams, and communicating effectively. Remarkable professionals who are exceptional problem-solvers tend to be strong-minded, self-assured, and cheerful. Strengths contain the mentee’s greatest potential for growth. Ask the mentee what his strengths are — the things he does naturally and well.

Question 3: “What do you think you will need to learn in order to do what you want to do? What constraints have you experienced in similar situations in the past? What feedback have you received?”

Building on the mentee’s strengths is not enough for success. Career success comes from delivering value to an organization and value of a professional’s work is eventually measured by the organization. Therefore, competent professionals who want to mature into great managers and leaders must stop doing what makes them successful in their individual roles and assimilate new competencies. Determine if the mentee has any self-defeating behaviors that could inhibit his success.

Question 4: “What can I do to help you succeed?”

Once you examine the drive and learning opportunities of a mentee, you need to determine what is it that the mentee would like to learn and then ask what experience you, as a mentor, have that might be helpful to the mentee. Asking this question will help you determine if you have the relevant experience and time to make this mentoring relationship effective. Analyzing the answer to this question will also help you maintain your mentoring relationship, which can be just as challenging as finding the right candidate to mentor. By understanding the development needs of the mentee, you can provide structure, expect learning discipline and rigor and establish goals that will enable you to close the mentoring relationship.

Motivation: Praise is better than Criticism

Criticism In the day-to-day rush to get things done, recognizing employees takes a backseat to everything else managers have on their plates. However, praise is important.

A study by Wichita State University found that praise and commendation by a boss is a very strong motivator. The survey also found that nearly three fifths of employees do not receive any form of recognition or appreciation on a regular basis from their supervisors.

Some managers are quick to criticize employees for their mistakes. That employees will be motivated because of the repulsiveness of the criticism and change their behaviors is an absurd notion. For this reason, criticism is very counterproductive. Managers unfortunately do not realize that criticism only motivates employees to do anything to avoid criticism and not focus on doing a better job.

The best managers hit upon creative ways to delivering well-timed, sincere praise to employees who do well. Here is what you can learn from them:

The most effective praise is well timed. Good managers praise their employees as soon as the employee displays the desired behavior.
Praise is effective only when it is genuine and heartfelt.
Managers that excel at recognizing their employees are very specific in their praise. They avoid generalities and discuss identifiable achievements of their employees in such a way that the desired behaviors are reiterated.

Book Synopsis: ‘Shift:’ Carlos Ghosn takes you Inside Nissan’s Historic Revival

Carlos Ghosn, Renault-Nissan

In the year 1999, Japanese automaker Nissan was in a downward spiral. The company had accrued massive debts, severe losses, and a badly damaged brand. Nissan had exhausted its strategic options and its managerial resources. It dreadfully needed a global partner and a new chief executive officer. Renault, the French multinational vehicle manufacturer, answered this call for desperation. Established in 1899, Renault was a so-so European automaker with far-from-inspiring prospects.

Renault had thus obtained a 36.8 percent stake in Nissan. Renault CEO Louis Schweitzer put Carlos Ghosn, the company’s second-in-command, in charge of Nissan. Ghosn seemed a perfect choice for the job. At Renault, Carlos Ghosn had earned his standing as a savage cost-cutter and first-rate manager. The French labor unions had begun to call him “Le Cost Killer.”

When he become heir to the helm at Nissan in 1999, it was clear that Carlos Ghosn had been training all his life for this mandate of turning around Nissan. Ghosn’s multicultural background made him unusually well matched to take on the Nissan challenge.

The Making of Carlos Ghosn

Shift: Inside Nissan's Historic Revival by Carlos Ghosn At Nissan, Carlos Ghosn was the definitive outsider. A multi-disciplinary talent who could speak more than a few languages, Ghosn was born in Brazil to Lebanese parents. As a youngster, he relocated to Lebanon at age six and was educated by Jesuits in Beirut. From there, he relocated to France, where he earned degrees in engineering from the prestigious Ecole Polytechnique and Ecole des Mines de Paris, two of France’s most esteemed universities. Alongside, Ghosn learned five languages, a passion for logic and statistical precision, and a gift to perform in unfamiliar—even multi-cultural—landscapes.

In 1978, after graduate studies, Carlos Ghosn joined Michelin, the French tire manufacturer. He swiftly moved up the ranks, from an engineer to plant manager to chief operating officer. He then took a seven-year stint in the United States integrating the Uniroyal-Goodrich operations, which Michelin had just acquired. During his 18 years at Michelin, he established two approaches that would stand him in good stead later in his career: an approach to cross-functional teams, and a methodology to rationalize and consolidate manufacturing operations.

Over the years at Michelin, Carlos Ghosn had recognized that his advancement at the family-owned company was limited. In October 1996, he transited to Renault as its executive vice president for purchasing, manufacturing and R&D. He soon called for upheaval by closing a Renault factory in Belgium and squeezing out billions of operating costs by initiating several efficiency programs with suppliers and in-house units alike. Following a string of efficiency improvements across Renault and consolidations of operating plants, Carlos Ghosn became known as “le cost killer.”

Renault-Nissan Alliance

Carlos Ghosn Led Nissan’s Historic Revival

At Nissan, Carlos Ghosn recognized that crisis was not only essential for organizational transformation, but also a powerful catalyst for it. After years of regretful leadership and disoriented policies, Nissan was headed to bankruptcy. Ghosn first determined just how deep the financial rot ran. He discovered that, inside Nissan, there was a sense of deep denial about the company’s perilous operating and financial condition. Carlos Ghosn went about slashing purchasing costs by 20%, reducing capacity by 30%, closing five factories, and ousting some 20,000 workers through layoffs and attrition. In Japan, large companies were viewed as simply too big to fail. Then Japanese government was expected to rush to the aid of companies if Japan’s keiretsu-linked financial institutions did not.

In his business career, Carlos Ghosn has brought a composed, analytical approach to each managerial problem he has faced. As Ghosn went about in his efforts to transform Nissan, he implemented a quantitative, results-oriented methodology of setting numerical targets and then holding his leaders and their organizations accountable for them. Carlos Ghosn also announced the conclusion of seniority promotions and financial cross-shareholdings with other companies, set meticulous financial targets and declared that he would quit if he did not meet his own demanding targets. His drastic plans made were opposed by Japanese management traditionalists. He was also reprimanded by the powerful Japan Auto Parts Industries Association.

Carlos Ghosn also invested heavily in Renault-Nissan’s technological abilities. He set up cross-functional Renault and Nissan management teams in engineering, design, and marketing. These cross-functional teams were asked to uncover every problem and set new, realistic-but-tough performance goals. In addition, Ghosn was a tough taskmaster and executed with discipline. He made it clear he would not tolerate any backsliding: he writes, “If you disagree with the plan, you’ve got to leave the company.”

Carlos Ghosn with Nissan 350Z

As cost saving programs, consolidation of operations, and reduced reliability on debt improved Nissan’s financial performance and Nissan’s operating efficiency, Carlos Ghosn took courageous steps to invigorate the Nissan brand. He revitalized the Z-series sports-coupe line with the Nissan 350Z, a model that had been terminated previously in 1996. In the U.S., the world’s largest automotive market, Nissan jumped into new market segments with the Nissan Murano SUV and the Nissan Quest minivan. Nissan also flourished from Nissan Titan truck, the Nissan Armada SUV, and the Infiniti QX56, full-size vehicles that accounted for higher profit margins.

As a result, Nissan not only reached Carlos Ghosn’s demanding targets, but also exceeded them. Again, Carlos Ghosn was promoted. In May 2005, he rose to become the president and CEO of Renault.

Currently, Carlos Ghosn is the Chairman and CEO of the Renault-Nissan Alliance, the global strategic alliance that oversees the unique cross-shareholding agreement between Renault and Nissan.

Book Recommendation: “Shift: Inside Nissan’s Historic Revival”

“Shift: Inside Nissan’s Historic Revival”, by Carlos Ghosn and French business journalist Philippe Ries, offers a treasure trove of practical guidance to executives who find themselves in challenging business cultures, especially in a global business environment, and are faced with diverse expectations for engagement of employees and managers.

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