#2: Attunement

Are you familiar with the old saying, “Communication takes two: one to speak and one to listen”? Seems like a lot of us forget about the listening part. Running a business can be overwhelming and it can be tempting to stop listening in favor of simply reacting, especially during time-crunched situations. Don’t give in to that temptation. Good leaders care about what others think and feel. From our clients, business partners and employees to colleagues and even vendors, paying attention to others is how we stay in touch with trends, make sure we’re meeting expectations and keeping everyone in our network connected with us in meaningful ways.

At Intertech, we have processes in place to make sure we are listening on a regular basis. Employees know our open door policy is real, but they also have an opportunity to anonymously tell us how they feel every year as part of our annual partner goal-setting retreat. Prior to the retreat, employees gather in small groups led by another employee who acts as a facilitator. There they talk candidly about their ideas, concerns, beefs , etc. The facilitator then recaps the feedback without attributing any information to any specific person. That feedback is carefully considered when I meet with the other Intertech partners at our annual planning retreat. We care about what Intertech team members think, how they feel and their ideas for making our business better.

Next post: Organizational awareness

#1: Empathy

Earlier I wrote about the emerging field of social neuroscience and new studies showing that leaders can improve group performance by improving their own social intelligence. Researchers Daniel Goleman and Richard Boyatzis created the Emotional and Social Competency Inventory to help business people who want to improve their social intelligence. As described in the spring edition of Harvard Business Review OnPoint, seven key social intelligence qualities are most important: empathy, attunement, organizational awareness, influence, developing others, inspiration and team work. I’m going to look at each of these qualities, one-by-one, in my upcoming posts and share how we make them each come alive at Intertech.

Empathy sometimes gets confused with being overly emotional. That’s a simplistic view and it simply is not true. Understanding what motivates others is crucial to being able to work together effectively. One way we’ve found to emphasize with our team members who may be feeling overwhelmed when they have to work on a tedious project is to (a) give them a definite deadline for the project’s completion and (b) offer them the opportunity to work on a “fun” project at the same time.  We have found that showing empathy to employees in these situations by using these strategies can make all the difference. They know that: we understand they’re slogging through a tough assignment, that we appreciate their commitment and that we want to make it better. The assignment still might be a challenge but it doesn’t seem quite as bad when they know we empathsize!

Next post: Attunement!

Lessons from My Father

For many, Father’s Day is a holiday of the worst possible definition: a phony event designed to sell cards and ties. For me, though, this Father’s Day has special poignancy: It’s the first time I’ll be celebrating as a dad myself, and the first time that I won’t be able to tell my own dad how much he means to me.

My father, Theodore, accidently died last year in a farming accident. It was a terrible shock, to say the least, and it put my life in perspective. In the months since, I find myself remembering all the things he taught me; lessons that I want to teach Theodore, my young son.

In 2001, a local newspaper published an article about how my company, Intertech, was named one of the 500 fastest-growing firms in the nation. In the article, I credited some of my success to simple lessons that my dad taught me. Now I realize that my dad taught me so much more, and those lessons have been critical to my company’s ongoing success.

“Tell the truth and you’ll only have one story to remember” was one of his favorite sayings. After being in business for 20 years, I have repeatedly experienced the merit of dad’s wisdom. Case in point: Recently, an important client of ours hired a CIO who turned out to be a dishonest bully. He hoped posturing, changing his story, and saying whatever would resonate with me would make me complicit with his deceit. It didn’t. The company fired him, but Intertech is still engaged.

This particular experience taught me that while it’s easy to encourage others to tell the truth, it’s harder to create an environment where truth telling feels safe. To create an atmosphere of honesty, I’ve learned to support people when they fail. I also encourage my managers to tell those people who make mistakes that they’re OK. I’ll never forget how grateful I was when my dad did that for me.

“If you do nothing, you won’t make any mistakes” were his first words to my teenage self after I accidently sheared the axel on his truck. After reminding me that only those who do nothing are perfect, he said, “Now let’s go take a look at the truck.” No shaming reprimand; just a straightforward focus on solutions. When mistakes happen in my business, I acknowledge it, learn from it and move on to the next step. At the end of the day, it’s the mistakes that make us great.

“If someone does something you don’t agree with, tell him directly” was another belief my dad modeled.  He wasn’t confrontational, but he did speak his mind if he disagreed or had something corrective to say. When I asked him if this was hard to do, he would just shrug his shoulders and say, “I’m not trying to win a popularity contest.” I was able to apply this lesson when a valued business partner of mine messed up. We talked through the issue and he realized that, while I recognized his mistake, I was more concerned about the future of our company and his role in helping us move forward. I’m happy to say that he’s still with us today. 

While popularity wasn’t his goal, my dad was beloved by many. At his funeral, many people recalled dad telling them he was proud they turned their life around or did good work. It made me realize that sharing sincere praise is precious. This is something I have institutionalized within my company with a program that encourages employees to nominate each other for demonstrating our company values. Sometimes as leaders we get so busy that we don’t give people the acknowledgement they need to excel. At the end of the day, awareness begets success.

My dad was a modest farmer, but he left a rich legacy of integrity, authenticity and kindness. His wisdom has helped me grow as a business owner and father. I only hope I can be at least half as effective in passing that legacy on to his namesake.

The Misguided Governor Dayton’s Position on Taxes

I’m still shaking my head over a recent opinion piece in the Star Tribune by Roger L. Hale, “The Governor’s budget won’t send businesses scurrying.” Hale has served as either CEO or a director for five highly regarded local companies: St. Paul Companies, Valspar Corporation, Donaldson Company, U.S. Bancorp, and Dayton Hudson (now Target Corporation). While his experience is impressive, I’m guessing it is exactly the reason he does not understand how a tax increase proposed by Gov. Dayton will hurt many small- and medium-sized businesses in our state.

We may not “scurry” if our taxes go higher, but we will likely have to pull back on expanding our businesses, hiring more employees and even building new facilities. It doesn’t take a Fortune 500 CEO to know that this will have a negative ripple effect on many others in our state.

This is not a personal attack on a venerable leader of Minnesota’s business community. But to my knowledge, Hale never personally founded a company or had to sign his name on legal documents stating he was risking all of his personal and family assets for the sake of his business. This is the reality of risk for a small business owner like me. I personally back every business loan or significant obligation for Intertech. If the business goes down, I’m agreeing that I’m personally on the hook.  Banks and other institutions won’t loan, borrow, lease, etc., without that personal guarantee.

So what does all of this have to do with a possible tax increase?

The whole personal versus business tax debate has been simmering for a long time and still is largely misunderstood by most. Every year, I personally pay taxes on the profit of my firm, regardless of the cash I take out for personal use. As an example, if my firm makes $500K and I issue a dividend to take $10K for personal use, I’m taxed on $ 500 K not on $10K.

This is important because with my business and personal finances  completely intertwined, when I must pay even higher “personal” income (i.e., business) taxes it reduces the amount of money left to reinvest in Intertech.  

Most entrepreneurs feel the same way. We’re not selfish money hoarders or greedy fat cats sucking every dime out of our businesses to bankroll a luxurious lifestyle. Rather, we invest in our firms, we care about our people, and we care about and give to the community. When we are able to invest everyone wins due to the multiplying effect (http://www.cnmi-guide.com/info/essays/economics/33.html).

Taxes are one of the biggest expenses we have as a firm and we pay them without (too much!) complaint because we know that taxes help keep our community strong and that benefits us too. But Governor Dayton, Roger Hale and others leading this tax increase debate should be cautious. Minnesota’s entrepreneurs and small business owners cannot help jump- start our tepid economy if all or most of our revenue must go for taxes!

This is not an academic policy debate for me. Intertech is growing and we’re adding to the tax base by hiring new people and buying new equipment. We’re also close to buying a building and engaging a distressed industry—construction—to finish it.  If our taxes go higher I’m not sure how much of this will be possible.

Tom Talks about the Biology of Leadership—part 3

New research finds that being in a good mood helps people to absorb information effectively and to respond in creative and flexible ways. In other words, G/B (see June post #1 for full citation) write, “Laughter is serious business.”

How do business leaders keep it light while still communicating the need for strong performance and positive outcomes? G/B came up with a behavioral assessment tool: the Emotional and Social Competency Inventory, which is a 360-degree evaluation by which bosses, peers, direct reports, clients and even family members assess a leader according to seven social intelligence qualities. Their tool might be helpful as you think about this challenge. Here are some of the qualities they measure, along with questions used to assess them.:

Empathy: do you understand what motivates other people, even those with different background?

Attunement: do you listen attentively and think about how others feel? Are you attuned to others’ moods?

Organizational Awareness: Do you appreciate the culture and values of the group or organization? Do you understand social networks and know their unspoken norms?

Influence: Do you persuade others by engaging them in discussion and appealing to their self-interests? Do you get support from key people?

Developing Others: do you coach and mentor others with compassion and personally invest time and energy in mentoring? Do you provide feedback that people find helpful for their professional development?

Inspiration: Do you articulate a compelling vision, build group pride and foster a positive emotional tone? Do you lead by bringing out the best in people?

Teamwork: Do you solicit input from everyone on your team? Do you support all team members and encourage cooperation?

Take some time to determine how you or your leadership team measures up. In the blog posts that follow this one I will delve into how Intertech measures up on these counts and, I hope, share some ideas that might be useful in your organization.