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How should OKRs be measured?

In a word: Regularly.

In two words: Regularly and Repeatedly.

The fact is that OKRs are a feedback process that requires regular practice.

Objectives are WHAT is to be achieved. They are qualitative, subjective, and significant. For instance, “increase revenue” or “decrease undesired turnover.”

Key Results (KRs) are numbers. They are 3-5 quantitative measures that verify the status of any objective. For instance, “increase recurring client sales revenue from $500k/month to $525K/month by the end of Q3” or “increase 1:1 performance reviews by 8% at all warehouses within 30 days.” ALL good business leaders use numbers to drive change.

I coined the phrase “OKR Leadership” because clients asked, “what really works?” OKR Leadership is defined as a process for managers and leaders to practice what matters.

Why do attorneys get to “practice” law, and physicians get to “practice” medicine, when leaders NEED to practice leadership?

Too many leaders are not effective. That’s not their fault. They have never been taught how to influence others toward a better future. They have not practiced public optimism. Those skills are complex. And they need to be practiced regularly.

For details on HOW to measure OKRs, WHY measure them, and WHAT you can do to practice OKR Leadership, read my new book Objectives + Key Results (OKR) Leadership; How to Apply Silicon Valley’s Secret Sauce to Your Career, Team or Organization (2019) or download a free excerpt from https://okrleadership.com/

Let’s keep it simple.

YOU can get started NOW. https://action-learning.com/contact/

How much of the pie do YOU get in your organization?

Distributed Ownership Tips for Family Businesses

By: Doug Gray, Ph.D., The Family Business Consulting Group

Many family business leaders describe ownership as a linchpin of their enterprise. Some, fearing family conflict and business indecision, seek ways to limit the distribution of ownership among their heirs. But a focused ownership strategy (e.g. assigning majority control to one heir) can lead to family disputes over fairness or a lack of social capital left in the business. When ownership is clearly defined with mutually acceptable values (e.g. stewardship, service, loyalty, integrity), then distribution is more likely to be successful. But what happens when ownership is not clearly distributed?

This article addresses two questions: 1) what is distributed ownership? and 2) how do business-owning families successfully manage distributed ownership?

1. What is distributed ownership?

Answers from my FBCG colleagues ranged from “that good feeling when the family business is in good hands” to “an endless series of scenes like in those Matrix movies.” Distributed ownership can be defined descriptively as “when multiple owners have different percentage levels of shares, or types of shares (e.g. voting, non-voting).” Distributions from generation 1 (G1) to G2 are typically from one or two founders to two or more owners, and that complexity increases with each distribution over time. The goal of distributed ownership is to move from now to next, from coexisting to maximizing your competitive advantage. In this article, distributed ownership can be defined as “how you co-design your flourishing family enterprise.”

Any functional definition needs to focus on “what works now” and “what may work until the next redistribution.” Consider the threats we know now. Amid COVID, globalization, political and social polarization, technological and security threats, decision-making for family business leadership has never been more

challenging. However, family business leaders have a resilient history. Flourishing family business leaders have many strategic advantages that can inform ownership discussions. Owners may make values-based decisions over longer terms (versus quarterly returns); owners can quickly access resources; and owners can invest or withhold resources quickly when required. The result is that family-owned businesses may have a competitive advantage over many publicly held companies.1

Distributed ownership can be defined as “how you co- design your flourishing family enterprise.”

The next few blog articles will describe 4 TIPS for what NOT to do, then 5 tips for WHAT TO DO in your Family Business.

For more details contact Doug Gray at

  1. the Family Business Consulting Group

2. or at the Family Business Collaboration

3. or contact us TODAY for the full article.

Let’s get started!

Culture and Change…

All business leaders share the same fear, which may be a mantra: “Please God, don’t let me screw it up on my watch…”. But how do you know what to change and what to retain?

1.  What is the role of culture in business?  I have never worked with clients who state, “we need to change our culture.”  However, I frequently work with clients who state, “we need to reduce conflict or increase our communication skills.”  That indicates a business opportunity to teach about culture, then accelerate learning for my clients.  There is plenty of confusion about culture.

2.  So what is culture?  I favor the definition from Edgar Schein that culture has 3 levels:  1) artifacts (what we say and do, the physical objects or rituals that reinforce desired behaviors), 2) shared values (why we say and do certain behaviors) and 3) unstated assumptions that may be constructive or destructive.  One resource is at https://www.managementstudyhq.com/edgar-schein-model-theory.html.   Another is this image:

3.  How do we understand the artifacts of culture?  We ask for examples and celebrate each example.  For instance, if we start a meeting by asking each participant to share an example of an important artifact, then we instantly hear stories of what they value.  I recently shared a plaster sculpture of two hands from our children that sits on my desk. I love it as a reminder of why we do this work…. Artifacts may include photos, songs, rituals, objects or traditions.

4.  What are our shared values?  Most privately-held businesses persist because people know their values and then celebrate them regularly.  Each meeting can start with examples of how that stated value on the lobby wall is manifest in recent actions.  Surveys and polls from the owners, and stories from Uncle Fred (for instance), will reinforce quantitative and qualitative examples of shared values.

5.  How do we understand the shared assumptions?  External advisers and managers are paid to “assess and recommend.”  With care.  Repeatedly.  We can be like chameleons who adjust our colors, and we can also be video choreographers using Zoom to provide/solicit behavioral feedback in the moment.  Discovery has never been easier or more accurate.  Managers need to ask deep questions about what needs to persist and what needs to change.  With care.  Repeatedly.  When we ask probing questions like “What else do we need?” or “How else could we implement that project?” then we identify the disconnects.  A candid linchpin, or customer, or in-law, may be more insightful than a manager who avoids taboo topics.

6.  Cultural narratives abound.  The words we use to describe the founder (for example) are often repeated and reinforce “larger than life” impacts.  Notice your reaction to these phrases:  “I have no dogs in this hunt, I live and work in Switzerland/ model neutrality, I’m working for the whole organization, not one person, I’m not here to push a specific outcome/agenda, naturally I cannot ever fully understand the complexity of your business history.”  I often write notes of key narratives that seem to be repeated.  Then I ask, “does this phrase accurately describe your culture?”

7.  Process maps provide visual maps of “now and next”…  We all use images/ models/ data visualization all the time to “create pictures” or “see others.”  Our brains retain and retrieve pictures faster than words, even when we are dreaming.  That’s another reason why Instagram is more engaging than reading an academic journal.  Process maps can be created in the moment to list possible solutions, do a journey map, ask about future states.  Examples can include photos of the past, sociograms of the present, or vision maps of a future state.   I often use a simple chart with Schein’s culture model (artifacts/actions, shared values, assumptions that are constructive or destructive), during a business meeting to process behavior.  Those process maps help me organize data into cultural schemas.  When useful, I may share the process map. Or not.

8.  Timelines may also be useful to reflect on the past and focus on that windshield view, rather than that rear-view mirror view.  When leaders are stuck/ hostage to the past there may be a need for clinical experts/ therapists.  I use genograms to varying degrees (software includes GenoPro and SmartDraw).  Genograms can be a team shared activity that increases understanding of antecedents, potential risky behavior patterns, genetic heritage, as well as trends in signature strengths.

All owners share the same fear, which may be a mantra:  “Please God, don’t let me screw it up on my watch…”

There are no formulas for what to retain or what to change.  There are no stages.  There are multiple lenses used to describe culture (e.g., financial, strategic, ownership, management, ethical, technological).  There are cultural layers that may be useful to describe culture (e.g. artifacts, values, assumptions).

For a deeper conversation please contact us or call today. 615,236.9845

How to Comply with Human Capital Reporting Rules Today

How to Comply with Human Capital Reporting Rules in 3 Steps

Guest article from John R. Mattox, II, Ph.D., Action Learning Associates

People drive value for organizations, now more than ever. 

Too many managers and leaders struggle with quantifying that value. They do not know how to create competitive advantage. Do you know the VALUE of your Human Capital?

Dave Vance, the Executive Director of the Center for Talent Reporting, (www.centerfortalentreporting.org), recently published an article in Chief Learning Officer (CLO) Magazine that described when the Securities and Exchange Commission (SEC) will require human capital reporting. 

On August 26, 2020 the SEC revised that rule and now requires that organizations report information that is “material”—meaning anything that an investor would find valuable when considering buying a security.  That is BIG news. That ruling includes human capital metrics. Do you NEED to measure the VALUE of your Humana Capital?

Thankfully, there is a readily available framework for measuring and reporting human capital. The International Standards Organization (ISO) which has improved product quality and consistency around the globe with ISO 9000, has developed a standard for sharing meaningful measures of human capital called ISO 30414.

How Should You Prepare?

There are many ways to approach this IS) 30414 Human Capital Reporting Standard. Here are three steps that will certainly help:

  1. Assess your current state.  Look across your systems, analytics resources, and reporting processes.  Can the current state in your organization provide the information needed?  The likely answer is no, but that is okay, because it is a starting point.  The output of this step should be a document that defines what you have, and what you don’t have. We can help.
  2. Plan for your future state.  You need to close your data and reporting gaps identified in step 1.  Leverage your systems, teams, and processes.  Prioritize the metrics that your stakeholders say are most important.  Also spend time determining how much effort will be required to obtain each metric and report it.  Use the business needs and efforts required as guides for prioritization.
  3. Deliver.  Practice generating a full report regularly. Start today. Each attempt should identify persistent gaps and areas that need process improvements.  Set a date for when you need to deliver the full report without any missing data. Drive towards completion.  Launch the report and share results with stakeholders long before the final report is needed for reporting or compliance reasons.  Continue to iterate and improve.

Conclusion

  • ISO 30414 provides a useful framework for gathering, analyzing, and reporting results
  • Prepare by examining the current state of your HR analytics practices; close gaps on the metrics that need to be reported
  • Leverage your internal resources, systems, and processes
  • Engage external resources like Action Learning Associates, with expertise in HR analytics and ISO 30414.
  • Contact us today. You can’t afford to wait.

How HR and ISO 30414 SEC compliance will change your business in 2020 and beyond

SEC Unveils Public Service Announcement To Promote Background Checks |  Vcheck Global

The Next New Business Rule…Will be Driven by HR

Guest article from John R. Mattox, II, Ph.D., VP of Action Learning Associates

Doug Gray, Ph.D., CEO of Action Learning Associates

Tangible and Intangible Assets

Financial capital is the lifeblood of businesses.  It allows leaders to invest in the tangible and intangible aspects of the organization that will drive growth and achieve business goals.  From an accounting perspective, people are an intangible asset.  Like tangible assets such as real estate, buildings, computers, manufacturing equipment, raw materials, etc., WE KNOW that people bring substantial value to the organization.

“We hire the best people,” is not a marketing catch phrase for companies like Google, Amazon, Qualcomm, McKinsey, KPMG, and other organizations that rely on innovations and intellect to achieve their mission. The best people develop new technologies. They build products that can be patented and resold. They program better and faster to streamline business operations. 

Yet, the accounting industry struggles with quantifying intangible assets and how to report them on. 

Why is this so important?

Investors (individual or corporate) review auditing statements to determine whether a company is a worthwhile investment.  An article by EverEdgeGlobal.com titled The Missing Trillions: Valuing Intangible Assets provides several examples of the disconnect between current valuation statements and actual value in the market.  Here is the quote that kicks off the article, “According to a recent report from the UK Treasury, the world’s five most valuable companies are together worth £3.5 trillion, yet their balance sheets report just £172 billion of tangible assets. The other £3.3 trillion of value is missing in action.” Investors are no longer well informed because accountants cannot accurately report the value of intangible assets.

HR is going to drive change for business within the next 3 years.

Until recently, the only human capital metric that was required for public reporting by the Securities and Exchange commission (SEC) was the number of employees.  

On August 26, 2020 the SEC ruled that companies should start reporting information about human capital.  Why? Wouldn’t it be valuable to know the turnover rate within an organization or the vacant positions among leadership?  What about culture? Diversity?  Ethical violations? Would this information change the way you value a company and influence whether you invest or not?  The SEC’s answers to these questions are yes.

The International Standards Organization (ISO) agrees. 

In 2018 after several years of discussion and development in technical committee, the organization approved ISO 30414, a standard for Human Capital Reporting.  This NEW standard recommends that large organizations report 23 people metrics and small organizations report ten metrics.

 The ISO encourages organizations to adopt these standards so all organizations can provide useful information to stakeholders.  The standards also allow for comparison across organizations—again, to help make more informed investment decisions.  The standard also serves as a guide for organizations that are not measuring human capital well.  It is a playbook of important measures.  Peter Drucker said, “If you can’t measure it, you can’t improve it.”  Here is the opportunity for organizations to get better by measuring and managing one of their largest costs and also one of the greatest influencers of profitability.

What are the Human Capital Measures?

The ISO standard contains 11 general reporting areas which are listed below:

  • Compliance and ethics
  • Costs
  • Diversity
  • Leadership
  • Organizational culture
  • Organizational health, safety, and well-being
  • Productivity
  • Recruitment, mobility, and turnover
  • Skills and capabilities
  • Succession planning
  • Workforce availability

Along with these reporting areas, the standard provides specific metrics and recommended ways to calculate them. 

Expect updates to definitions and calculations in the coming years as practitioners adopt and apply the standard.

Conclusion

Employees are gaining recognition as a differentiator that adds more value than traditional tangible assets.  For decades business owners and audit leaders have struggled to frame and quantify the value that employees bring.  Now with the ISO 30414, there is a viable framework and detailed measures for demonstrating value. 

The SEC is now requiring publicly traded companies to report material information about human capital. 

Let me repeat that: The SEC is now requiring publicly traded companies to report material information about human capital. 

Measurement and reporting of these metrics will provide investors with valuable information to fuel decisions.  It will also provide business leaders with valuable metrics to monitor and manage a critical driver of success.

If you need additional information, please contact John Mattox or Doug Gray at Action Learning Associates by phone 615 236 9845. We can help your team measure and manage your ISO 30414 compliance initiatives. Get ahead of the curve. Call us today.

Fee Ranges for Leadership Consulting Services

OPINION:  There is no need for mystery in the consulting industry.

FACT:  Annual revenue from management consulting in the U.S. was over $58B in 2018.

If you are ready to invest in your organization through an Action Learning Associates, LLC workshop, then you are probably wondering about the costs.   You may also be wondering how much you should invest in your team.   Use these fee ranges.  Your investment costs are direct (e.g., training, travel, facilities, food) and indirect (e.g, lost work opportunities, low engagement or undesired turnover from uninvited associates).    Your benefits are direct (e.g., consistent delivery of key content, accelerated launch speed, increased engagement) and indirect (e.g., model professional development, cascade initiatives to all associates, digital distribution.)   Do your cost:benefit analysis.  Use these investment ranges.  Then contact us.

Question:  How much should you invest in your team?

Answer:  You should only invest invest enough to guarantee that your outcomes are exceeded.  Not a dollar more.

Use these Organizational Consulting Activities and Fee Ranges as a guideline.

1.  Consulting Day Onsite.   Fee Range $5,000-$10,000.  The primary reason to invest in external consulting is to accelerate desired changes in performance or behavior.  The services may include (1) assessments, (2) coaching or consulting, or (3) skills training.  Those services may be for individuals, groups (defined as 2+ people), or organizations.  Be wary of consultants who bill by the hour, because that practice is transactional and inherently unethical.  Be wary of consultants who offer an “in-town reduction,” or who charge additional fees for materials or excessive travel.  Only select external consultants who provide tremendous value, clear contracts, expected outcomes, and then exceed any promises.   We typically provide you with 3-4 choices. For details click here.

2.  Consulting Day Offsite  (e.g., research, data analysis, assessment development).   Fee Range $1,000-$5,000.  The primary reason to invest in such consulting days is to enable an expert to customize evidence-based content for your organization.   Be wary of consultants who charge an excessive fee for research on your project.  Those consultants may not be subject matter experts-  they may be billing you for their self-study.  That practice is both expensive and unethical.  However, it is fair and reasonable for any consultant to provide a summary of value provided for any offsite consulting work such as customization, research, or data analysis.  We always include those expenses in our value-based contracts for services.   Click here for details.

3.  Keynote or other brief speech.  Fee Range $5,000- $15,000.  The primary reason to invest in a motivational speaker is to introduce a new topic or to accelerate learning.   For instance, when we speak on “How to Accelerate a Culture of Fiscal Accountability Using the OKR Process” or “How to Apply Positive Psychology to Your Organization” the material is customized for your specific learning outcome.   Only select speakers who can provide video evidence of their relevant expertise.   The real benefit of investing in our keynote speaking is to integrate customized learning content into your performance or behavior outcomes.  For details on our speaking expertise click here.

4.  Half-day workshop.  Fee Range $4,000- $7,500.  Adult learners require meaningful experiential events.  Anything else is a waste of time, money and energy.  There may be a compelling business reason to provide content in a half-day workshop, rather than a full-day workshop.  In all of our workshops we provide workshops we integrate virtual or digital training into the process, with pre-event assessments, a digital playbook, and post-event impact boosters.  Those are evidence-based aspects of our Action Learning process.  Therefore, we provide them at no additional cost for a workshop of any length.   Be wary of the assumption that a consultant can “condense a full-day of content into a half-day.”  That assumption is absurd.  Half-day workshops have different business outcomes than full-day workshops.  For details on each workshop design, contact us here.

5.  Full-day workshop.  Fee Range $5,000- $15,000.  Only select proven management consultants who provide tremendous value.   Adult learners demand meaningful experiential events. Anything else is a waste of time, money and energy.  Leadership development must be customized if you want measurable impact.  We have delivered workshops on “Coaching New Managers, Why Managers Fail, Emotional Intelligence, Communication, Executive Presence, Managing Using the OKR Process, How to Create a Positive Organizational Culture, Leadership Development, and Family Succession Planning.”   Be wary of any leadership program that is “off the shelf.”  There is little evidence to support their value.   Consider these facts:  Your operational investment into your full-day workshop is multi-fold.  The direct costs of the facility ($5,000) plus the direct costs of 20 people away from their desks ($20,000+) plus the real business lost from that day ($20,000+) mean that your investment in that full day workshop for 20 people actually exceeds $45,000.  We strongly recommend that you invest in our expert leadership consultants to accelerate a complete process of pre-event assessment, customized delivery, and post-event impact boosters tied to your business outcomes.  We have delivered hundreds of these programs.  For details contact us today.

6.  Executive Retreat Programs, per day.  Fee Range $10,000-$70,000.  Executive leaders have unique demands on time and energy.  They require condensed leadership development training through remarkable experiences.  We have facilitated executive retreats with private chefs in the mountains and with professional actors in the city.  The reason to invest in an executive retreat program is to accelerate new learning in short, remarkable periods of time.  The goal is strategic transformation or breakthrough.  The Action Learning model fosters breakthrough experiences.  Customization for your executive team is mandatory.  That process requires partnership with external trusted consultants because internal training departments lack the required objectivity.  We have delivered dozens of Executive Retreat programs throughout the U.S.  That’s why you should call us today.   For details contact us.

7.  Systems Implementation  (e.g. talent assessment, organizational culture change, succession planning initiative). Fee Range $10,000- $50,000.  Organizational leadership is defined broadly as a series of  interventions toward desired business outcomes.  That process requires ongoing active leadership from external consultants.  We provide the objective assessments and recommendations that you require.  Be wary of any consultants who depend on online talent assessments for lower level employees, or those who sell boilerplate programs.  Perhaps you know that 60-70% of planned change initiatives fail to be adopted.  We do not want you to waste any time or money. Your success requires executive sponsorship, valid assessments (often at individual, team and organizational levels), proven process steps with measures for accountability, and specific expertise.  We are experts at implementing organizational change.  We typically provide 3-4 choices, milestones and a set of solutions.   For details contact us.

8.   Family Business Succession Planning.  Fee range  $15,000- 85,000.    We have demonstrated expertise that family business leaders require.  The objective of succession planning is to expedite the process of transitioning the management and ownership of your business to the next generation of business owners.   Your key results (KRs) may include:  KR1:  assess the strengths, weaknesses, hidden talents and blind spots of all nuclear family members using a series of 1:1 confidential interviews and validated assessments (e.g., the DISC, PIAV, EI assessments.) Distribute those team results to the nuclear family members.  KR2:  Create a customized succession planning manual within the next 6 months.  That reference manual can be useful for decades ahead.  KR3:  Develop family rules for decision-making, key roles, schedules, milestones, timelines, managing conflict, evaluation, note taking and direct communication within the next 3 months.  KR4:  Design and facilitate a series of family business meetings— up to 14 meetings in the next 12 months, if needed.  KR5:  Design and facilitate a Family Council Meeting at some point within the next 12 months.  Family business leaders have unique demands that require external consultants like Action Learning Associates, LLC to facilitate critical behavioral and performance changes.   For details and confidential examples contact us.

9.  Employee or Customer Surveys.  Fee Range $15,000- $100,000+.   Caution:  the ability to create an online survey does not make one expert in the use of surveys.  The primary reason to invest in any survey is to assess a population and make informed recommendations toward some desired business outcome.   Valid data requires external consultants with a reliable process.  Internal “consultants” or departments may be self-serving, because they are required to justify their importance.  Consequently, their survey findings may not be valid.  External service providers like Action Learning Associates, LLC are absolutely essential for an objective assessment of your organizational performance.  The scope of your investment in these external surveys must vary with the scope of your business needs.   Assessments are (1) quantitative, (2) qualitative, or (3) mixed.  We strongly recommend that you hire an external consultant for surveys.  We have demonstrated expertise with customers in all business sectors.   Contact us for examples or details.

10.  Strategy Formulation.  Fee Range $50,000- $150,000.  One definition of strategy is a 3-year horizon line of behavior that reinforces the organizational culture.  The process of strategy formulation requires expert facilitators who can assess purpose, mission, values and culture.  External consultants with unrelated expertise often provide the best value to your organization.  For instance, we have worked with attorneys and accountants for 20+ years.  Recently we were hired to work with a mid-sized company of IT providers who required a new way of thinking about strategy.  Then we were hired to help leaders at a top-tier university determine their next strategy.   Each client was delighted with their new strategy.  Be wary of any consultant who says, “I have no bias.”  We all have biases, and expertise, that affect any investment in strategy formulation.  Our bias is based on evidence-based research in positive psychology that assumes that groups can flourish.  Our strategy formulation services are always provided in measurable outcomes with milestones, so that all parties are delighted.  For details contact us.

11.  Organizational or Group Assessment.  Fee Range $20,000- $200,000.  External consultants like Action Learning Associates, LLC are the ONLY people capable of providing objective data about your organization.   Internal consultants have an inherent bias that limits their effectiveness.   We partner with your internal leaders to provide the data you need to make informed decisions, reduce cost, or mitigate risk.  For 30+ years we have provided expert organizational and group assessments.  Assessments are (1) quantitative, (2) qualitative, or (3) mixed.   We know that the best talent assessment methodology includes a multi-rater (2+ consultants) multi-method (quantitative and qualitative) design, because the result has high predictive validity and reliability.  However, your team may only need a quantitative assessment.    Our theoretical model focuses on positive psychology, therefore we make recommendations based on your individual and organizational capacity to flourish.  Then we help you implement those recommendations.    Those details are here.

What are you waiting for? 

Now is the time to reach out to Action Learning Associates, LLC and take advantage of our business coaching services. We can help you decide which service is best for your organization. Contact us today.

Call us at (615) 236-9845 or schedule your initial consultation here.