FEAR ERODES PROFITS:

TRANSFORM LEADERSHIP FOR SUCCESS

Knowledge Management at Kent State University

June 6, 2013

www.mdaszko.com408-398-7220

md@mdaszko.com

Our Aim Today:

To Provoke Current Thinking about Fear and Trust;

To build more Awareness about how fear impacts people, productivity, & profits;

Look at what Fear is Costing Us—In Our Lives & Businesses

Shift Leadership Thinking and Actions: How to Reduce Fear & Build Trust

Reality: Why discuss fear?• “23 out of 24 businesses go out of business. America has

an amazing tolerance for inefficiency.” Dr. Russell Ackoff

• What percentage of companies listed on the Fortune 500 list when it was first published in the 1950’s exist today?

• Some Fortune 50 companies today have an average 40% turnover rate. What does that say?

• Workplace bullying is a sharp increasing trend.

The Leadership System that creates fear is the same system that creates crisis, bullying, unemployment, civil unrest, & poor economies

in our world.

Definition of Fear• “An unpleasant, often strong emotion

caused by anticipation or awareness of danger; anxious concern.”

Fear is not a rational topic• People’s fears are real.• Your fears are different

than mine—there’s variation in everything!!

What are yours?

Can fear motivate?

Is fear an effective motivator?

• Self-imposed

• Threat of danger

• Short-term

• Intrinsic vs. extrinsic

motivation

Intrinsic(from within)

Extrinsic(from outside)

What We Will Discover Together; Increase Our Awareness:

• 100’s of kinds of Fear • Fears’ Impact on People;

• Fears’ Impact on Your Organization;

• Fear Erodes Profits—and much more;

• The Job: Identify & Reduce Fear, & Build Trust

What We Say We Want --- What We Get• Challenging work• Great workplace• Recognition,

appreciation• Teamwork• Collaboration• Fair pay and benefits• Able to learn, share

ideas

• Fear, politics, win-lose, lose-lose, internal competition

• Bullying, incivility

What kinds of fears and challenges

do you experience?

What kinds of fears and challenges

do you experience?• Job security; losing a job or business• Change• Uncertainty; the unknown• Skilled workforce• Speaking up• Making mistakes• What’s happening in the world

Fears• Not enough skilled labor• Too many employees

retiring• Government regulations• Consumer confidence• Lack of customers• Lack of credit availability• Healthcare Issues• Competition from a Big or

an Innovative Business

• Cash Flow• Over-staffing; under

staffing• Poor leadership• Global Competition• Bankruptcy• Pay for Performance

rating• Taking a risk

Fears• Saying “I don’t know.”• Making mistakes• Failure• Missing deadlines• Losing a home or business• Exposing weaknesses• Death• Losing face• Loss of respect• Not fitting in• Low performance/appraisal

• Public speaking• Making a bad decision• Not having the right

answer• Looking stupid• Not being understood• Not being able to learn—

fast enough• Unhappy

customers/investors• Loss of control

What is the impact of fear on people?

What happens to people?• Analysis paralysis: they stop making

decisions or sharing suggestions.• Get overwhelmed, stressed, and reactive.• Get quiet and stay to themselves.• People are criticized, judged & blamed.• They get defensive and complacent.• They sabotage data or results.• Lose their passion, energy, & commitment. • People compete; don’t trust others. • Win-lose or fight/flight attitude/behaviors.• They use aggressive or passive-aggressive

behavior.• They hunker down. They quit.

How Does Fear Impact An Organization?

What Happens in the Organization?• Failures & mistakes are hidden.• Productivity plummets;• Work, information, & communication do not

flow; data is distorted;• Absenteeism & turnover increase; recruiting

and hiring costs increase.• Creativity & innovation decrease;• Inefficiencies, waste, and complexity

increase.• Quality wanes; reputation suffers.• Customer service suffers.• Employees don’t feel appreciated, and

morale deteriorates.

What Happens in the Organization?• Commitment to new learning, trying

new things, taking risks, helping each other decreases;

• Employees do not jointly problem solve or engage;

• Blame errors on others; finger-point; accuse people;

• Get a reputation for an abusive, dysfunctional, toxic culture.

• Bullying and incivility are accepted and increase. People lose their soul.

• Go out of business.

Fear Creates Scarcity & Failure• Lack of personal feelings with Passion

• Lack of a creative, collaborative

changing, culture with an aim• Less service, Quality, commitment to

learning, improving, and innovating TOGETHER for customers

• Less revenues, profits, competitive edge, and growth; lower stock price

• Eventual poor reputation, more struggles, turf wars, & demise.

Where is Fear?

• Fear also exists and thrives in the silence of organizations.

COST OF FEARThousands?

Millions?Billions of $$$?

“The most important measures are unknown and unknowable.”

Dr. W. Edwards Deming

“If you can’t measure it, you can’t manage it.”(myth)

The Cost of Fear: Measures

• Creativity & Innovation Loss• Collaboration Loss• # of Patents• High Turnover• Internal Competition• Cost to Recruit/Train New Hires• De-motivated Employees• Loss of Market Share

• Immeasurable• Immeasurable• Measurable• Measureable• Immeasurable• Immeasurable• Immeasurable• Immeasurable

Costs:lives,

good work,our jobs,learning,

self-esteem

Does anyone care about profits?

$$$$

The Bottom

Line,Results

Greed,Arrogance

Management Fads and most “Best Practices”create fear, internal competition, finger-pointing, blaming, bullying, and toxic work environments. . .

Management Fads & “Best Practices”

that Create Fear• Holding Individuals

Accountable for the Outcomes of the System

• Quotas, Targets (6 sigma)• Incentives: Carrot & Stick• Arbitrary Numerical Goals• Performance Appraisals• Pay for Performance• Motivating Employees

• Ranking & Rating• Unclear Purpose &

Direction• Lack of Understanding

about the strategies and resources needed

• Busy work that creates complexity and waste

• Power Point Paralysis

Integration of Destructive Fads• WANT/EXPECTATIONS:• Collaboration, Team!• Self-motivated worker• Problem solver• Excellent communicator• Shares ideas, creative• Happy, hard working• Hire passion/”fit”/live wood

• WHAT WE DO:• Rank and rate• De-motivate, intimidate• Tell, micro-manage• Judge, blame, accuse• Give incentives, quotas• Hold indiv. Accountable for

the System’s outcomes• My way or the highway

Our Aim Today:

Our Current Thinking is provoked;

We are more Aware: about how fear impacts people, productivity, & profits; the many management fads that cause fear; the costs of fear

Shift Leadership Thinking and Actions: How to Reduce Fear & Build Trust

Transform Your Thinking & Organization:Begin the Journey

Point #8: Drive out fear! and build trust!

“We can’t have quality, creativity, productivity, innovation, collaboration (or an interest in

serving customers) if people in our organization can’t share information and tell

the truth.

We can’t improve organizations when people are afraid to participate, contribute, or

cooperate.”Dr. Deming

SystemsSystemsThinkingThinking

UnderstandingVariation

UnderstandingVariation

UnderstandingUnderstandingVariationVariation

Theory ofTheory ofPsychologyPsychology

Theory ofTheory ofKnowledgeKnowledge

A Management Philosophy for A Management Philosophy for TransformationTransformation

“System of Profound Knowledge” (Deming)

Search for Fear—reduce it! HOW?

THINK and Planthrough the lens

of the SoPK; create a plan to

develop trust

ASK QUESTIONS to understand

CHALLENGE Current

beliefs and assumptions

DEVELOP LEADERSHIP to serve employees and customers

VALUES:VALUES:

VISION/COMPELLING PURPOSE/AIM: “What are we trying to VISION/COMPELLING PURPOSE/AIM: “What are we trying to accomplish TOGETHER?”accomplish TOGETHER?”

METHODS/STRATEGIES: “By what methods will we achieve our aim? METHODS/STRATEGIES: “By what methods will we achieve our aim? What resources will we need to support these methods?”What resources will we need to support these methods?”

Strategic Compass--each question below is inter-dependent with all of the other parts

CUSTOMERS/MEMBERS: “Who are we serving (internal and external?) CUSTOMERS/MEMBERS: “Who are we serving (internal and external?) What do they need? How do we know?”What do they need? How do we know?”

MEASURES OF PROGRESS AND SUCCESS: “How do we look at data over MEASURES OF PROGRESS AND SUCCESS: “How do we look at data over time and in context for better decision-making to achieve better time and in context for better decision-making to achieve better results and have better control of our work?”results and have better control of our work?”

What do we stand for? What do the words, policies, and behaviors we use reflect?

All parts of the system must work together to achieve the Aim

Marcia Daszko & Associates

www.mdaszko.com md@mdaszko.com

Trust Creates Productivity and Profits

Leaders Develop a New Vision, Direction, a Compelling Purpose and Inspire People

What does the organization look like?

How do people engage, interact, serve & care?

What behaviors do we want?

How Can You Build More Trust and Lead and interact in a better way?

What will create trust?COMMON AIM

TRUST

How Will You Define Success in the Future?

What direction are you going?

What is your Plan?

(use the Plan Do Study Act model)

What do you need to think and know to lead a culture of trust and

build joy in work?

What We Say and What We Do

• The beliefs and assumptions (what we Think and may say)

• The structures (what we design; are they fear-full?)

• The policies and procedures (what we create)

• “I don’t care what you say; I only watch and believe what you do/act (how you interact.)”

The Top

VP VP VP

MANAGERS

WORKER WORKER WORKER

True Scenario: A company full of fear• The Challenge: $30 million co. Declining sales and profits, 50%

turnover per month; managers blame each other• The Assessment: executives finger-pointing; explosive work

environment; lack of systems, processes and communication flow; huge fear; a crisis situation.

• Current Direction: on their way out of business• The Commitment: Open to Learning, question, lead & transform• The Change: Power of Purpose; commitment to learning & new

thinking; Reduce Fear & Build Trust; Improve and Serve all customers; Create new systems: only leaders are accountable.

• The Result: Growth from $30 to $200 million; no turnover. Leadership, joy and pride in work developed throughout co.

Take-Away’s:What Is Fear Costing You?

• Become more Aware of fear and its Impact;• Work to reduce fear & create a

plan/systems to build leadership thinking and a culture of trust;

• Get an outside assessment of the fear-causing management fads, “best practices”, leadership thinking, systems and behaviors that impact your bottom line, profits, culture, and your health. Where do you stand? What is fear costing your organization?

Take-Away’s:What You Can Do

• It is leadership’s job to reduce fear and build trust.

• Develop all employees’ leadership.• Create forums for open conversations to

discuss issues and solve them Together.• Create plans to improve communication

and work flow.• If the culture is out of your control and toxic,

get out Fast.• Find a place where you can thrive.

HELPFUL RESOURCES

Driving Fear out of the Workplace by Kathleen Ryan and Dan OestreichFeel the Fear and Do It Anyway by Susan JeffersLeadership and Self-Deception, Second edition. by The Arbinger InstituteThe Essential Deming. Edited by Dr. Joyce Nilsson OrsiniLove ‘Em or Lose ‘Em by Sharon Jordan-Evans and Beverly KayeDrive by Daniel H. PinkFree, Perfect, and Now by Robert RodinFlash Foresight by Daniel BurrusThe New Economics by W. Edwards DemingDeming’s Profound Changes by Dan Robertson and Ken DeLavigne Out of the Crisis by W. Edwards DemingPower by Jeffrey PfefferThe Leader’s Handbook by Peter ScholtesIntrinsic Motivation at Work by Kenneth ThomasThe Goal by Eliyahu GoldrattArticle: “What Profound Leaders Need to Know,” www.mdaszko.com

THANK YOU

md@mdaszko.com408-398-7220

www.mdaszko.com