Sonya Law and Ron speak to the Annual Review and how it is a reflection on past performance as well as foretelling and discussing what comes next.

Trust, in fact, is probably the whole deal, isn't it?

Absolutely.

You know, we talk a lot about... If you look after your employees, your employees will look after you. They look after our customers. I've called them our heroes since the beginning of time. But I don't know that we do a good job of, let me call it, unlocking the potential of every employee. I don't know we do anything in that direction. You got any observations on that with your clients or the experiences you've had?

Yeah, absolutely. Often there's not. a focus on that in terms of firstly recognising or having a sense of awareness that people have unrealised potential and we can actually unlock that. That's the first thing. It is, as you say, creating a trusted relationship between the manager and the employee, which helps to make the employee feels psychologically safe to actually engage in that unlocking of their performance is very important. And there's often not that sort of dialogue back and forth where you can invite feedback both as the employee and the employer in that scenario. One of the things we've learned in the pandemic is that we do need to adapt and be agile. So having that. psychological safety and that feedback back and forth helps to, it helps employees to adapt and often to learn new skills and to develop a growth mindset which enables them to unlock their potential.

There's a big part that the manager plays in that in terms of communicating what the strategy is and aligning them with the strategy.

One of the dilemmas I see is that, or look to, I don't know how many businesses actually have a strategy. You know, the statistics that you see on surveys in America,95% of the companies fail to accomplish their strategy. And it might be 90%, but it's in that range. And the primary reason is that the employees can't tell you what that strategy is. It's communication. We haven't communicated it to everybody. It gets nasty. To some degree, that causes the employee to disengage from the company. They just do their job and that's it. And that's not a good, I don't think that's a healthy place. No,

it's not. And it comes up in a lot of employee and culture surveys that the employees don't know what the strategic direction is. You can't really unlock potential if employees don't really know what it is they're doing and why they're doing it on a consistent basis. And then when the goalpost shifts, being realigned to what's important. A really easy thing to do is when the senior leadership team meet, they talk about the top three priorities of the organisation and then they communicate it next level down and then all the way through the organisation on a regular basis. Yeah, it's a really simple thing to do, but, yeah, it's not being done. So, yeah, people aren't feeling engaged. So when their performance, as it does, dips a little, You know, they're not being brought back to the fold of why it is they're doing what they do.

And managers daily need to communicate what the strategy is and what that person's role is and the value that they play in that is really important. That's the main role we need to be doing.

Too often recently, Sonia, in discussions with dealer people and other podcasts that I've done, we talk about the kind of work we do. And it seems to be that our job is solving problems. Customer calls in, he needs a part. We're going to find the part for him. Customer calls in, he's got a machine that needs a mechanic. We're going to find a mechanic for him. Customer has a machine that he wants to trade him. We're going to find another machine for him. We're problem solvers. A lot of people call us in that regard firefighters. Well, I'd like to draw a distinction, and this has been a recurring theme for three or four podcasts. Firefighters spend about 5% of their time fighting fires. They spend about 95% of their time preventing fires. We spend about 95% of our time fighting fires and 5% of our time trying to avoid having a fire. It's backwards.

It's almost like we've got a group of employees that are comfortable in this high-pressure, high-stress environment, and they don't know what to do when the phone doesn't ring. They have no earthly idea of what they should be doing if there isn't an external stimulus to provoke work, a phone ringing, a customer walking in. That's weird.

Absolutely. It's becoming weird.

How do we overcome that?

Well, I mean, I will quote Simon Sinek, and I think he articulated it really well in that he said, we often know what we do and how we do it, but we don't know why we do it. Senior leadership teams do need to get together often, not just to talk quarterly about the operations, but also about the vision and to look at, where they are and where they want to, you know, head to in an aspirational sense, have some understanding of the market and the competitiveness and the talent within the organisation, some customer feedback, some information about, you know, product development that's coming up, not just in terms of... what the salespeople think we should have, but in terms of the customers, what are the problems that they're experiencing at a grassroots level, which we typically get from field technicians or mechanics really needs to be fed through. And this information needs to inform the direction that the company takes.

And that feeds into quality and to continuous improvement and to make sure we're actually... manufacturing products that the customer wants to buy, you know, at the end of the day. And unfortunately, you're right, we do wait for that external stimulus that we're getting intel that, you know, our competitors have a better product, it's got better features and benefits, it's priced well, oh, they've got more money for marketing. You know, we respond to external stimuli or, you know, churning customers or... you know, that sort of information. But it's much better when we operate more proactively and take the initiative and drive, you know, re-looking at what it is that we do, how we do it, but more importantly, why we do it, and then communicating that to each individual within the organisation so that we gather momentum. And that feeds then into innovation also.

where people feel comfortable to come up with new ideas and new ways of looking at things. And it's really important, particularly now in the pandemic, that we are innovative, that we find new ways to do things.

You bring up the pandemic. I think the pandemic has caused a lot more long-lasting trouble than we'd anticipated. So many people for, I'm going to call it 18 months, so many people for 18 months have been struggling trying to survive. And even though there's different variants and there's high levels of infections being found, the consequences now are minor. It's two to three days for flu and you're done. But a lot of us are tired. Going back to work, I mean, God, thank God that's over. I can get back to normal now. Well, what's normal? There's a whole bunch of things that have happened. Working from home, as an example, I think has fundamentally altered the relationship that we have with employees. Never to return. We're going to find people that will work from home forever. And it's been coming for some time. We've had the technology. We just haven't pulled the trigger on it.

The other thing is I'm not sure that I want to even contemplate an annual performance review anymore. I think I want to do it every month.

Yes.

And, you know, the age old thing is like, is there an optimum number from your perspective as to how many employees a supervisor should have, whether it's an executive vice president or a foreman? Is there some number that you think is good?

Yeah, absolutely. Twelve. Too many. Too many.

Twelve is too many.

12 is too many. Yes.

What would, is there some, is there, okay, let's, why is 12 too many?

And I'm probably talking really from a national sales and marketing manager, looking after 12 remote salespeople selling a technical product in geographic remote areas. It's just really dealing with. all the stuff that goes along with people in terms of what they do and removing roadblocks and also things that are going on in their personal life as well because people are human and they have things going on.

So one of the things that you then differentiate is the kind of work.

Yes, the kind of work that's making it.

And let me go further. Another determining factor might be the skills of the workers.

Yes,

definitely. The more skilled. the less supervision required. The less skilled, the more supervision, right?

Yes, if they're seasoned versus someone who's quite green, it makes a difference as well because it all comes down to time.

I say it's between 8 and 12 depending on the job function. And what's really remarkable is, you know what the standard number of centurion Roman soldiers was per supervisor?

How many? Ten. That's a good number.

Do you know what the U.S. Army is today?

No. Ten. Ten.

So, again, if you look at the skills, the nature of the work, ten can work.

Absolutely.

So let me come a little bit further and say that ten is our number, not 12 from you or eight from me, just ten.

Yes.

Why the heck can I not spend half an hour to an hour every month? with every employee talking about the good, the bad, the ugly of the last month. And would that not be something that I should get into the habit of doing? I'm writing a blog about the workforce as it sits today. And I ran across a survey from Gallup that was performed this year that said 48% of the current workforce in the United States is looking to change jobs. And their primary motivation to doing that is not because of money, not because of how they were treated, but rather it's they feel disengaged with the business. Now, if that isn't a smack at supervision, I don't know what is. Simon Sinek would kill us on that basis. You know, the golden circle he has, why, you know. Apple, it looks for customers that their customers of Apple want to be Apple. And you've heard the routine. You know, we make computers.

We make high quality, easy to use, distinctive computers, phones, buds, music, apps, whatever the heck it might be. Want to buy some. I didn't talk a bit about features and benefits. I didn't talk about, you know, I've got the best foo-foo valve on the planet. It's just, you want to be like me? We got the best product out there. It looks best. It's sexiest. It's, you know, good price. Really good. You want one? How many do you want? It's kind of amazing. But doing that good, the bad, the ugly, and having trust, that means the employee can tell the boss that they don't like what the boss is doing.

Yes.

I think that's one of the reasons you pointed out as to why employee year-end reviews don't happen because the boss doesn't want to be vulnerable

to that.

They're worried about that.

Yeah, absolutely.

Why?

Because they might be critical. They might be critical of their performance. They want to be in control and a lot of the time leaders and are not always open. to feedback unless they've invited it.

So let me flip it because that Gallup survey was also talking about businesses finally have come to the realization that they need to employ managers, people who have management and business skills, not the technical skills of the job. So as an example, somebody who's going to be a parts manager in current thinking it's somebody who is the best at the parts counter selling parts or somebody who was really good at inventory management, hasn't made one statement about whether they're any good at all with people. And those, that chapter seems to be ending. And the new one coming in is that we're going to have people that are managers. They're like Bruce Baker calls him. He's a, he's a business therapist. A manager is going to be an employee therapist.

Yes. Yes.

How can I help you? What's going on?

Yeah. Yeah.

You know, we don't do enough of that. Now, to some degree, people are going to call that intrusive.

Right? Yeah. It's a

trap. It's a trap, isn't it?

Yeah.

Don't talk to them about my personal life. Go away. That's none of your business. But why are you working? That question, the who, what, and how, and why. It's interesting. One of our classes is what's your why? So we try and provoke people into thinking about it. Most of us do what we do because we like people.

Yeah.

You and I do this because we like seeing people succeed.

Yes, unlocking potential, definitely.

Exactly. And unless I have some kind of discussion with my boss, I'll never unlock my potential. Most of us don't think about our own individual potential.

Yeah.

You know, I don't know how we would do that, to be honest. Having a boss sit down once a month with you and say, okay, what did you struggle with this past month? What were you really proud of this last month? What are you worried about next month? One of the consultant questions I ask all the time is, what would you do if you weren't afraid? Change scares people. Being vulnerable to other employees scares people. How do we get past that fear?

Yeah, it's really, you know, the culture in terms of what people see and really the most important relationship is the one with your manager. So often they can say these words and it's just words. The feeling is not there. And at the end of the day, people want, connection and to feel passionate about what they do and the product. You know, that's the why that they want to connect with. For the manager largely, they need to be themselves. They need to be authentic. They need to talk about personal stories. They need to see the person holistically and be really genuine in that in order to to create, you know, that vulnerability, that openness, that psychological safety. It's really about, I want to say, just be human. Yeah. I understand that some people don't see people that way. They see them as a resource and almost a robot and feelings shouldn't come into it. And, you know, that's one sort of group. And then you've got another group much.

like us and Simon Sinek, Bruce Baker, who you know, who operate from creating a culture of openness. That's how we do things here. We do connect with each other. We do talk about things other than work. We want to know more about how a person works from the inside out, not just in their job. And once people identify with that, the dialogue between the manager and the employee is a lot more relaxed. They feel confident to bring up, you know, ideas about how to get efficiencies and innovation. And this process in itself unlocks their potential, just even coming up with new ideas. You hear a lot of people say, They've worked somewhere 10 years. They're leaving because their ideas weren't taken in and they feel that their contribution is not valued and so they leave and primarily, yes, they're disengaged. So there's different levels of disengagement, but the biggest one is that relationship between the employee and the manager.

People do leave their manager.

Disengagement is an interesting word. You know, in North America, I'm going to say 50 to 60 percent, maybe a bigger number. This is a guess of the employees of the workforce today live from paycheck to paycheck. There is no comfort. There's no insulation. There's no emergency fund somewhere. If you get sick, you're in trouble. Your car breaks down, you're in trouble. your child has an accident, you're in trouble. That might go a long way to explaining why a lot of the leadership is just directing activity. Do this, do that, do the other thing. Not letting the person rise to or execute according to their ability or inability. It's almost a reflection of serfdom, isn't it?

Yeah, absolutely. We just call it differently today. Yeah.

How do we get past that one?

Well, the best managers are the ones who, as a HR manager, you know, they would come into my office and talk to me. I've been thinking about this employee. You know, I feel like they, you know, could be stretched in this area. They've got all this, you know, potential. They actually think about them other than what it is that they're doing. They're always trying to think about stretching or growing them. and engaging them in their work so that they stay. Managers who actually think about employees and that they are volunteers, essentially. I think about employees that they could quit any day. And what can I do as a manager and a leader to engage them in the purpose and what we are doing and the importance of their role in it? I think about it like they're making a choice to come and work. Like you talk about a paycheck and yes, that may be the reason for them and that's understandable.

But it's actually the manager's role to think about that person in terms of how to engage them and to grow them. And that could be around some specialisations or more education or another role they see them in within the organisation for internal promotion. And it's interesting when you say to, you ask a business leader, how do you recruit? And they don't do any internal promotions. That's a sure sign that they have a disengaged workforce and managers who don't think about that employee beyond the job that they're doing.

Yeah, I actually had an owner of a business say to me in the last couple of weeks, I hire people that have the skills that I need. And if in six months or nine months time, the skills that they have no longer fit what my needs are, I get rid of them and get somebody in who has the skills. I said, do you ever consider that you want to train them to have the new skills that are required? No, I'm not going to do that. That'll make them more valuable. They'll want more money from me. They'll want to leave if I don't pay them. I mean, this is a smart man. That's a very stupid approach, but that was a smart man. I couldn't believe it was coming out of his mouth. Yeah. There's a lot of that thinking out there. Yeah.

The problem with that is that the IP walks out the door, the customer relationships and the suppliers, vendors, relationships have to be reestablished. So it's not just that skill set, that person. It's the interconnections that they have with others outside of the business. And a company is an organization. It's like a living, breathing organism. If you cut off part of your way that those relationships, it's hard to rebuild. It takes time. You don't work in silos.

There's interesting statistics about customer defection based on the number of salesmen that they have in a period of time. Very much. It's compelling as hell. It's unbelievable. What about performance standards? Should every employee be given a personal performance standard?

How do you mean?

I expect you to process 72 orders an hour. I expect John over there to do 45 an hour. And I expect Helen over there to do 110 an hour. And you and I will work out why the 72. How come it is 72 for you and not for you? 45 or not 120. Is that a good plan, a bad plan, or it doesn't matter?

I mean, I'm someone who's very interested in performance, but it's very, it should be done on an individual basis. Even with routine activities, we've got more than one person processing. Yeah, I wouldn't set like a benchmark or a standard just for, you know, across the board because there's so many variants to that. Performance standards are good because you can stretch someone beyond that, but it would always be a consultative, collaborative process of where are you at. Where can you get to? And then the manager stretching them beyond that. Because in that stretch process that you get the growth and the unlocking of potential, as long as it's not to the diminishing returns.

Yeah, I'm with you. And again, I'm just throwing spitballs up there.

Yeah, it's really interesting.

Yeah, how about I have a project for you, a project for each employee. month or every quarter that, you know, go see what you can come up with to make this better. And always have something like that on the, and not in the form of a pressure, but to get them thinking beyond the mold. Yeah,

that's important. Outcomes based where it's around continuous improvement or customer satisfaction, quality of the product. Yeah, that's important. Outcomes-based, yeah, that's good to do. I definitely do that with employees to stretch them. It's an outcome of, you know, it's that they can feel proud of and then they get confidence and then you can put them on another project and gives them a feeling of job satisfaction and you generally don't have to get to a micro level with them as well of how to do it. You can just say, you know, aim for 90% in this particular outcome. And it's up to you how you get there. If you hit a roadblock, let me know and I can support you. People do like those sort of projects. Otherwise, it becomes a bit mind-numbing. If we just set a random number, they focus on the number rather than going beyond.

Yeah, exactly. So if I gave you a choice between having, a standard of some kind of a production aspect of the job versus individual tasks or projects or goals to pursue, you would take the latter?

Yes, if it was practical, definitely, definitely.

I don't know why we don't do that. Every single, like one of my... core beliefs is the person who's doing the job knows it better than anybody else. Yes. Why I don't ask them to, you know, how, what I should do and how I should do it, it doesn't make sense to me. Yeah.

The best managers are the ones that, you know, in a manufacturing environment, they walk the shop floor and they ask the operator, the person who's actually doing the job. You know, I don't know the job that you do. You know, teach me, tell me, show me, you know, what's a good day, what's a bad day, what are some of the things, you know, you experience. yeah, just have a general chat with people and they come up with so many great ideas and you start to notice the theme and then, you know, it's communicating that feedback upwards if it's about quality, safety or efficiency or production or output or conditions, that's the best way to work with a group of people. And then that filters down through to the customer experience and the quality of the product and satisfaction.

One of the things that, you know, that's the management by walking around, that's almost gone away. I don't see very many people get out of their offices. They're comfortable in their office. They hide behind their computer screen. You know, I used to say I wanted to get a manager out in the marketplace with customers half a day every week. Yes. I was like trying to pull chicken teeth to get them to do that. That's where all the fun is. That's where the enjoyment is.

Yes.

You know, this grunge that we've got going in and it comes down to time. Another of the elements that gets in the way of doing this is time management. We're so focused on solving problems. You know, I used to the service managers in a class, I'd be asking, okay, what do you spend most of your time doing during the day? Answering questions. I said, really? Oh, yeah. Well, what happens? Somebody comes to the door, they ask a question. What do you do? Give them the answer. Oh, you're enabling bad behavior. What do they do? Check their brains at the door before they come into your office? They don't know how to think. They know their job. Don't answer the question. You say, well, I've got to answer the question. I say, well, why don't you ask them what they think? You know, well, geez, I can't do that. They don't know. Well, guess what? They know better than we do.

Absolutely, they do.

And the same thing in walking around. I might get confronted by somebody with a question that I don't know the answer to. And, oh, I can't do that.

You just say, I don't know. I'll find out for you. I'll come back to you.

Precisely. Precisely. I can't begin to tell you, you know, because I started pretty young in crazy places. And I can't begin to tell you how often I had to. Well, I don't know, but I'll get the answer. Am I supposed to be walking font of information of everything known to man? Go away. So it becomes so I can give them projects to identify those things that excite them, that can lead them in a different direction. I can engage more frequently so that it becomes less of an anxiety having this discussion in order to try and build trust. The more frequently I do it, I think the better. The more normal and natural the employee will feel. But if I don't have trust with the employees, I don't have anything.

Oh, absolutely. And I mean, it was one of my favorite things. I agree. It's really enjoyable to walk the shop floor. We had an errand center. I used to say to the air-end tech, yeah, just show me what you're doing. And with an air-end, as you would know, the first thing you do is you assess it, you do a quote for the customer of the work that will be involved and you strip it and then you put it back together and you fix it and you paint it. I mean, it's a very simplistic way, but I actually was in the air-end centre. said I wanted to see the whole process sort of end to end. And then there's so many questions and information you can elicit by doing that and what tools or lifting equipment or things could enable them to basically complete more errands. You know, in one day they'll tell you if I had this piece of equipment or this tooling or this, you know, sort of apparatus to speed up the stripping process because the paint.

is the longest thing that takes. Whereas if you put it into a tank of chemicals, you know, while that's soaking in that chemicals, you could be doing something else, like stripping the next one. So unless you do that or simply, you know, going to the stores and seeing how much containers are coming in, how much floor stock there is, where they're up to is really important. But unfortunately, what managers do, they sit in their office. And they are so focused on reading numbers and reporting numbers. And that's really all they do. Whereas if they went down to the workshop floor and actually were out in the field and saw what was happening in practice, it would save them so much more paperwork. They wouldn't find out about problems when it gets to firefighting mode. They'd be more proactive to ensuring that people have the tools. to do their job more efficiently in a continuous improvement methodology.

So going from firefighting mode to being more proactive about getting product, you know, out the door. So the numbers will go up organically because you're actually doing what you're supposed to be doing and that's supporting and working with people. But if you're just focused on the numbers, you can't read numbers, but you can read people. And you can read, you know, what it is that you actually see. So that observation method's a big part of continuous improvement in Japan and in Germany, in fact, as well in manufacturing and engineering. That part of their process is actually having someone stand there and watch, you know, watch certain elements of the process and then doing a report on how it can be improved. There's lots of things that can be done, but whilst you're sitting in the office not connecting, it's very hard to read the play. You never see a coach on a sporting field, you know, sitting.

They're out there with them, with the players. They're the best coaches.

Yeah, there's no question about that. The managers, and I'm going to say it dates back to maybe 1990. with the advent of computers being rather universal. We have financial reports that come out of accounting, but we don't have management reports. So the managers didn't like the financial reports, so they reformatted things so that everybody could understand what it is. So you ended up having classes finance for non-financial people, you know, so that I can teach you what finance is. Well, you balance a checkbook. I think you know how to write checks, you know how to pay bills. I mean, life is very simple. It's people that mess it up. So we we end up in a circumstance where the boss is doing something a clerk could do.

Yes.

And then we end up with this data. We have data coming at us from every single direction, but hardly any information. Data is not information. And that becomes another challenge. So, you know, engaging with the employee, if they do something well, I want to acknowledge it right now. Same thing if they do something wrong. Wait a second. Let's talk about that. I think the more frequently I can sit down and have casual conversations, and if I've got eight or 10 or 12 people, and I cannot spend an hour with each person every week, at least every month, there's something fundamentally wrong with me.

Absolutely. Absolutely.

I'm probably going to wrap it there. A couple of things that came out was the size of the team that you're leading is critical, and that's dependent on the skills of the team members and the degree of difficulty of the work. But once we get there, managers, leaders need to be people managers, not thing managers, much more so than ever before. You agree with me so far?

Yes.

And then I want to try meaningful things at least once a quarter that I'll assign to those people that work with me, the eight or 10 or 12. I'll give every single one of them something to go poke at.

Yeah.

See what you can do about, is there a better way to do that? Why do we do that? Do we need to do that? That kind of a thing.

Yes.

And get everybody into the mode that. We are not just working in the business. We're working on the business. We're not just answering the phones. We're trying to figure out how to do it effectively. And that then is a performance review.

Yes.

Much more meaningful performance review in my mind. You agree with that?

Absolutely. A lot more enjoyable too.

Yeah, I think so. Okay, so let's wrap it there. Bye, John. Let me just make sure. You know what? I'm not sure that I – yeah, I did. Let's wrap it there and come back with a blog if you can make some sense out of this thing and publish something for us. That'd be wonderful. And you got any closing comments you want to make or do we want to wrap it now?

Just, yeah, take care of people and I'll take care of customers and business. It's important.

That's probably the most important piece of advice we got, right? Thank you, Sonia, for another great conversation. I appreciate it. And thank all of you who listened. And we'll see you soon with another candid conversation in the near future.

Pleasure. Thanks, Ron. Aloha.

Thank you for listening to our podcast. We appreciate your support. Should you have any thoughts or comments, please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.