Annual reviews are designed as a part of an overall performance management process. During the typical annual review, managers are usually assessed in a number of mission-critical competencies. Unfortunately, though well-intentioned, the typical review contains a number of flaws.

First, adequate training in assessment areas is not always forthcoming. In fact, specific competencies are not always adequately identified for managers prior to the review.

Second, in many cases, clear objectives and expectations have not been established for each competency, so the review takes on a highly subjective tone. For example, in the presence of a single instance in which a manager has seeming failed to demonstrate “initiative” (over a 12-month period), a manager may receive only an average score on this required competency – a 3 on a scale of 1 to 5.

Third, at some companies, managers may be assessed (allegedly) on literally dozens of competencies. In one case, I consulted with a company that assessed managers on over thirty management or leadership competencies in which they were expected to do well. However, the review process often devolved into identifying the two or three areas that needed improvement, while little attention was given to areas of strength or excellence. Managers perceived the whole process to be about about finding what was wrong with them rather than truly managing and improving performance.

All of this caused me to think about which competencies are really important in management leadership, i.e., which competencies should a company focus on to improve management performance? The Center for Creative Leadership – a well-respected leadership think tank – recently surveyed 2,200 leaders and asked what they considered to be the most important skills that leaders must develop to be successful in the current business climate. Here are the top 5 competencies they identified:

1. Leading people: directing and motivating people.
2. Strategic planning: translating vision into realistic business strategies, including long-term objectives.
3. Managing change: using effective strategies to facilitate organizational change.
4. Inspiring commitment: recognizing and rewarding employees’ achievements.
5. Resourcefulness: working effectively with top management.

(Hmmm.  It seems that, to be successful in the current business climate, leaders must first and foremost be good at leading people. But, isn’t that what leading is? What else would they lead – the facilities?)

Notwithstanding my sarcastic comment about No. 1 (I’m sure what they have in mind is for leaders to be more effective with people), I think they have it right – with one glaring omission. The single most important skill that any leader must possess is the ability to communicate effectively. Of course, those surveyed would likely say that communication is intrinsically present in each of these competencies, but in my view that is exactly the problem. While organizations consistently claim communication is critically important to success, it is rarely identified as its own competency – as demonstrated in this survey [Note: In many reviews, "verbal communication" and "written communication" are listed as necessary skills, but these generally refer to presentation skills (verbal) and general business correspondence (written)].

The important take-away here, I believe, is that current leaders do believe that working with people is the single biggest competency needed to be successful. If that is an accurate assessment, then managers would be well served to access any training or education available to improve those skills.

How important is it for a manager to be an effective communicator in the workplace? The most recent data suggests that, for corporate recruiters looking to hire for management positions, communication skills rank at the top of the list of core competencies managers need in the workplace:

Good communication skills outrank other core business competencies as the number one skill for corporate recruiters looking to hire MBA graduates. That rather surprising conclusion comes not from communications specialists, but from an organization that has all the relevant data at its fingertips, The Graduate Management Admission Council (GMAC), which runs GMAT testing for MBA applicants.

The question, however,  is how much does one really learn in college or graduate school with regard to the art and science of communication? The most recent data from the National Assessment of Adult Literacy indicates that only about one-third of college graduates have a high-level of proficiency in reading and writing, while almost two out of every ten graduates had only basic or below-basic proficiency in reading and writing. The rest – about half of all graduates – fall somewhere in the gray area called “intermediate” proficiency.

But that’s just reading and writing. While the ability to read well and pen effective business correspondence is certainly important in the workplace, to limit communication to reading and writing is to completely miss the boat. A significant amount of relevant, influential, and potentially damaging communication is transmitted in a number of different ways:

• What you don‘t say
• What you do
• What you don’t do
• Who you include in meetings or projects
• Who you exclude from meetings or projects
• How you react to mistakes or failure

Help Wanted: The Parts of Communication Managers Don’t Understand

I have yet to see the organization that doesn’t complain about the the prevalence of inadequate, inconsistent, or incomplete communication. Ten minutes with a group of employees anywhere below the executive or ownership level will quickly uncover of host of communication issues. However, a bit of digging usually reveals that what employees are really concerned about is NOT how poorly their immediate supervisors or managers assigns job tasks, sets deadlines, or criticize performance (very low rungs on the communication ladder). Instead, what employees label as poor communication is:

1. The lack of communication about the “big picture”
2. The inability to have input into the process
3. Management implementing change without clear explanations
4. Management actions that are inconsistent with their words

While there are plenty of applications of communication skills that the average manager usually has yet to master – setting expectations, giving praise and encouragement, and providing effective feedback are good examples – it is these four items that tend to create the most problems for employees.  In fact, as Art Petty points out in a recent blog post regarding communication, a manager’s actions alone have the power to completely override the strongest verbal communications:

…while words are indeed powerful tools for creation or destruction, it’s your actions that will seal your fate as a leader.  Or rather, how well your actions and your words match.

Everyone IS watching you and they are all passing judgment on your credibility as a leader.  Constantly.  Constantly that is, until they find you guilty of failing the test of credibility and they shift into compliance mode.  You’re finished as a leader at this point.

The challenge is that quite often managers are weak communicators to begin with; they were promoted because of their knowledge, skill, or performance. To make things worse, they fail to realize that everything they do is communication and they fail to manage those messages well. And finally, the average manager is often guilty of saying one thing and doing another – as if employees don’t pick up on that stuff?

What part of communication don’t you understand?

I recently read a Blog post entitled “Why Engagement May be the Best Management Voodoo Ever.” As I worked through the article, I also worked my way rapidly through a range of emotions – from curiosity to irritation to anger to defensiveness to understanding and, finally, back to curiosity. The author, Wally Bock, posits that “employee engagement,” and those consultants that preach its importance, have simply created the next management fad. His points, if I understood them correctly, are that employee engagement is poorly defined and difficult to measure, that it is not the be-all, end-all answer to management success, and that consultants tend to be more concerned about the actual state of employee engagement rather than how engagement impacts productivity

Message received, understood, and ultimately agreed with.

That being said, I enthusiastically believe that employee engagement is absolutely critical in the workplace. Important in the sense that, with scant few exceptions, it is not possible to create a consistently top performing team (hence, a team with high productivity) with participants that are not engaged. Any kind of team for that matter – workplace, athletics, volunteers, whatever.

I believe the research data clearly indicates a direct correlation between employee engagement and key metrics like productivity, profitability, employee retention, safety and customer advocacy. I agree that definitions are not wholly consistent or crystal clear, but companies whose employees report (through independent surveys) that they like their jobs, like their bosses, feel valued on the job, and feel connected to the company’s vision and objectives consistently report better results in critical performance metrics.

Frankly, I don’t care what we call it, but the concept of employee “engagement” to me isn’t really new. An examination of successful leaders (as well as coaches and teachers, for that matter) reveals a consistent set of skills that have always been used to create highly productive teams. What are those skills? Here is my “short” list of ten critical management/leadership skills necessary to effectively engage employees and build a productive team:

• Be competent in the team’s core skill set
• Create an environment of trust
• Make sound and well-reasoned decisions
• Prepare and empower employees to do their jobs well
• Fully support employees with appropriate resources and training
• Provide a clear sense of vision and direction
• Set and communicate clear expectations, and create accountability to those expectations
• Provide effective feedback and coaching
• Recognize and reward excellence
• Sets leadership priorities as: communication, people development, and strategic planning

What Are Your Top Priorities?

From my perspective, effective leadership skills naturally create employee engagement. It’s simply a question of learning and applying those skills in the workplace.  The challenge is that most managers are not trained to be good leaders and/or they are too bogged down in the daily grind of the workplace to focus on leadership priorities. In my view, those leadership priorities should be: 1) communication, 2) people development, and 3) strategic planning, but are often these instead: 1) paperwork, 2) problem solving, and 3) doing a lot of the work employees should be doing instead.

Or something like that. Managers are so busying doing things that they have little time to develop things. In a recent article from CFO Magazine, I read this this quote:

“Internal communication issues are rarely top priorities….that is, until they create potential liabilities.”

I think this is pretty profound. Many of the important things that management/leadership should be doing for an organization are rarely even a priority – until a warning bell sounds. Employees, for example, routinely complain about the communication problems that exist in the organization, but rarely is it considered a priority to remedy the problem, so next year we will be talking about the very same communication problems.

Communication is rarely a priority because things like budgeting, decision-making, and resource allocation (to name a few management activities) seem more directly connected to productivity – except at those organizations where leadership believes there is a direct correlation between engagement and productivity. At those organizations, communication is seen as a critical component of employee engagement and, therefore, an absolutely necessary skill to be developed right along with budgeting, decision-making, etc.

Some consultants may use “engagement” as the latest fad; but, regardless of misuse by others, good leaders know that engagement is a critical part of a highly productive team.

Broad-based competition, a severe economic slowdown, and many other factors have combined to stagger the coffee juggernaut known as Starbucks. Sales are down; profits are down; and analysts, in general, have not been kind to the former Wall Street wunderkind.

So, it was with more than a passing interest that I read a WSJ article entitled Latest Starbucks Buzzword: ‘Lean’ Japanese Techniques (Julie Jargon, August 4, 2009). It seems that Starbucks has discovered the concept of a “lean” approach to doing business; i.e., changing processes to become more efficient in the use of labor and other resources.

It appears that the “lean” approach may be paying dividends. For the quarter ending June 30, Starbucks reported gross profits increasing 14.6 percent, while net income jumped from $25 million to $150 million. Of course, there are other factors at work in the performance improvements, but one store, for example, reported improvements in both efficiency and customer satisfaction as a result of working with “lean” techniques. This Chicago, IL store had a dismal customer-satisfaction score of 56 percent in April, but saw that number jump to 76 percent in June while customer transactions increased 9 percent in the same period.

However, my interest was more in how the everyday work changes were impacting the company’s employees and culture. To that end, one particular statement in the article caught my eye:

Starbucks has faced some resistance to the program. “They’re trying to turn workers into robots,” says Erik Forman, a barista in Minneapolis. “It’s going to essentially turn the cafe into a factory. They want to control our every move in order to pinch every possible penny.”

Here is the ever-present evidence of the consequences of change – there will always be resistance to doing things differently. While the reasons for resistance will vary considerably, the fact is that change always creates organizational friction. And, while that friction will never be completely eliminated, it can be lessened dramatically by focusing on communication before, during, and after the change.

How to Lose Up to 99% of Your Effectiveness

John Kotter, “widely regarded as the world’s foremost authority on leadership and change” and “the premier voice on how the best organizations actually “do” change,” believes that one of the problems in an organization during times of significant change is that leaders will under-communicate by a factor of ten or even a hundred.

Knowing that communication can have a dramatic impact on the change process, here are some things to remember:

• Communicate early and often; use different media (group meetings, email, memos, intranet, etc.)
• Explain the reasons for change; be specific (economy, sales and profits declining, competition from McDonalds, etc.)
• Acknowledge the inconvenience – the need to do things differently – especially when the perception is that things have worked fine in the past
• Show the benefits to each employee (improving profits helps avoid lay-offs, preserve benefits, etc.)
• Use one-on-one communication for best results

As a general rule, managers are promoted to their positions because they know how to get thing done – they learn quickly, overcome obstacles, complete projects on time, and often do all of this with little supervision or oversight. So, when it’s time to find a new manager, who better for the job than someone who makes things happen?

If these managers have a consistent, predictable weakness, what might it be? In my experience, the answer is most likely patience. These capable taskmasters are quite often long on activities and short on time; find it hard to delegate important responsibilities; and generally feel the need to be directing most tasks. After all, that “Just Do It” reputation they have created was a primary factor in their promotion to management.

People Issues Usually Include Emotions

Unfortunately, not all work problems are task problems, and this can present a unique challenge to managers: how to efficiently manage employee issues?

Employee issues come in all shapes and sizes: poor performance, lack of cooperation, inadequate communication, attitude problems, personal problems, and so on. Because these are people problems, they rarely come without the side effects produced by the emotional side of people: enthusiasm, impatience, fear, resentment, excitement, hurt feelings, worry, disappointment, and more.

The problem here is that is impossible to be efficient with emotions. Managers can’t just troubleshoot the problem and come up with a new process or a new solution. Of course, they often try to do exactly that (ignoring the emotional fallout), but the results are fairly predictable – the employee feels used or disregarded and the disengagement process begins.

Effective leaders understand that employees are human and have emotions that must be acknowledged and/or addressed, a process that takes an investment of time. In fact, the leadership concept of emotional intelligence relates to the ability to manage one’s own emotions and the emotions of the people you lead. However, investing time in your employees – to listen, to explain, to train and develop, and to deal with personal issues – rarely leads to efficiency.

Instead, the most important objective, in dealing with people, is to be effective.

1. Focus – engage the employee
2. Listen – don’t fix (not at first)
3. Clarify your understanding
4. Ask for input
5. Create clear expectations
6. Clarify their understanding

By the way, the time you invest in dealing with the issue now probably prevents you from wasting a whole lot of time you would have needed to revisit the problem/issue later (in many cases, more than once).

You might be more efficient than you think…

The foundation of 1-on-1 Management™ is that critical employee development tasks like establishing expectations, creating career goals, and performance recognition (among many other things) are all done best one-on-one. I read an article this week by Carol Kinsey Goman, an executive coach and author who made this interesting observation:

“In this fast-paced, techno-charged era of email, blogs, wikis and IMs, one universal truth remains: Face-to-face is still the most preferred, productive and powerful communication medium.”

I wholeheartedly agree. The fact is, despite all the electronic tools available to us, another universal truth is that the vast majority of problems in the workplace are created by poor communication. In many cases, we have attempted to solve or address our communication issues by using those electronic tools, but, in most cases, email and IMs seem to make the problems even worse.

As a manager, you would do well to listen to Ms. Goman. While face-to-face communication can still be done badly, the odds of communicating effectively are far greater when you can observe body language and tonality, ask clarifying questions, and explore details. Even if an employee (or your boss) is a poor communicator, you can take up the slack by listening carefully and asking good questions.

That is actually one of the most common questions I receive: “How can I improve my boss’s communication with me?” Here are a couple of ideas:

• When the boss (or an employee) uses email in a situation that is critical, requires clarification, or may lead to misunderstanding, don’t respond with email. Instead, opt for a face-to-face meeting. Once you clarify details, follow-up with an email that confirms those details.
• When appropriate, ask the boss, “What are your expectations for this (project, assignment, or task)?”
• If you boss loves to have things done a certain way, ask “Do you have any advice or recommendations for this (project, assignment, task)?” If you get some specific directions that conflict with how you might proceed, you have the opportunity to say something like, “My first thought was to (proceed a certain way)…what are your thoughts?”

The chances that your boss will change in his/her management style are fairly remote unless he/she is committed to improvement as a manager. However, my experience is that micro-managers crave information and actually would prefer to communicate more effectively (for their own benefit, usually) even if they are not very good at it.

Take the lead and improve the communication from your end. The truth is, your boss might begin to catch on.

People usually do their best work when the task at hand is something they believe in. It’s not that people won’t work if the task is mundane or fails to serve their interests, they just don’t develop the same passion and intensity they would for something that is truly important to them.

The challenge is that it is difficult, if not impossible, to connect every job – or any job all the time – to something that is inherently motivating to the employee. Great managers overcome this hurdle by creating a mission and vision for the company and finding people who share a passion for that vision.

The weakness for most managers, assuming they have created a compelling vision for the company, is communicating it effectively. This issues was discussed in a recent article from AMA’s Leader’s Edge newsletter (March 2009):

So, why don’t leaders focus more of their time and energy on communicating to inspire others? The simple answer is that they feel they are too busy with their own tasks. Many are struggling to keep their heads above water, trapped by demanding schedules of travel, meetings, and day-to-day activities. Yet, if leaders don’t find the time to physically connect with their people, to communicate an inspiring message and mission, they ultimately fail.

["How to Motivate Like a CEO" by Suzanne Bates. March 2009.]

Whether you lead a team, a department, or a company, it is critically important to “connect” with your people – and connect them to the organization. The nature of the organization is irrelevant. The key is that people are more focused, more enthusiastic, and more willing to go the extra mile when they are inspired by the organization’s mission, vision, and values. Bates explains:

Leaders who connect people with the company and its message and strategy find it far simpler to accomplish their goals. These leaders harness energy and talent and drive their organizations forward. You can see the difference in the way they behave: they preside over an organization of people who are working, not just for a paycheck, but to achieve their own potential as individuals. They want to make a difference. They believe that what they are doing matters and it motivates them and ignites their passion and creativity. They become energized by the possibilities and feel connected to each other by a common purpose.

What exactly can you do as a manager to harness this powerful idea? Here are some ideas to consider:

• Work with your team to create an identity (Who are we?)
• Set your standard of performance to be the very best at what your team does
• Recognize and celebrate excellence at every opportunity
• Make one-on-one communication your most important priority

Take time to create vision and purpose for your team – you won’t be disappointed.

Creating a vision is critically important for an organization. Vision not only creates purpose, but it unifies the organization and provides its guiding principles. A majority of CEOs agree that this particular skill is among the most important for their position:

The Center for Creative Leadership collected data from 146 CEOs between September 2007 and September 2008. They were asked to select the top five factors for success in their current position from a list of 13 items. The ability to communicate a strong vision emerged as the single most critical factor according to 75 percent of the CEOs surveyed. [Quotation from CCL Online Newsletter. Leading Effectively: Think and Act Beyond. March 2009]

Although CEOs find that communicating a strong vision is very important, the question for us to consider is whether or not this is a critical skill for a mid-level manager, department head, or other team leader.

The answer to this question, I believe, is unequivocally “yes.” Keep in mind that the vision may be one that originated with the CEO, the owner, or the leader of the company, but every manager needs to communicate a strong vision to his/her team because vision creates purpose for a team. Great teams always rally around a common purpose, a clear and compelling objective.

The challenge is that, in many companies, a strong vision doesn’t exist or is not communicated effectively. This creates a void that a strong manager will rush to fill because top performance is essentially unattainable in the absence of a clear and compelling objective.

If there is not a guiding purpose or vision articulated within your company, get with your team and create one together. Help them find a common goal, a compelling objective they can work towards together. When people find a purpose for doing their best, they will find ways to do just that.

The recent economic turmoil will likely challenge small businesses in ways they haven’t experienced in many years. Managers will be forced to evaluate every dollar they spend, consider how resources are allocated, determine which initiatives should be advanced and which ones should be tabled. They may be forced to evaluate each and every employee and be asked to trim budgets through lay-offs.

For some businesses, the marketplace may change so dramatically that the company cannot survive. A small business supplying products to the flailing automotive industry, for example, may not be able to adapt their products or services to other industries and simply fail. For others, however, this down cycle may create enormous opportunities to dig in, improve products and services, and capture market share.

A recent Business Week article (“Managing Through a Crisis: The New Rules”, Emily Thornton, January 8, 2009), sets forth some advice in adapting to the realities of the changing marketplace:

Acknowledge to yourself and your team that the world has changed. Dennis Carey, a senior partner at Korn Ferry International (KFY), argues that now is the time to question every technique that worked during boom years. “You can’t rely on a peacetime general to fight a war,” says Carey. “The wartime CEO prepares for the worst so that his or her company can take market share away from players who haven’t.” Many of the best managers in 2008 were gearing up for battle during good times.

Perhaps you were one of the “best managers” that geared up for this battle during the good times; perhaps not. Regardless, this business climate provides enormous opportunities for the great manager.

First, this is the time to get back to basics. Review skills, ensure employees can do the basics of their jobs perfectly, provide additional training, update knowledge, even cross-train. Why? Because many companies – in a panic – will react quite differently. They will reduce training, automatically reduce their workforce, and slow down advertising. A “wartime” manager will recognize that opportunities abound as competitors pull back.

Second, turn to your employees for ideas. How can we improve? Where can we cut costs? How can we become more efficient? How can we become more competitive? What opportunities exist to capture market share? Great teams are often forged during tough economic times.

Third, if there was ever a time to evaluate and improve communication with your team, this is it. Change always creates stress, which, in turn, can create needless worry. Communicate with your team as a group, but spend plenty of time in one-on-one conversations with your direct reports – and make sure they do the same with the people they manage.

Economic downturns can create challenges; however, they don’t necessarily have to lead to crisis. Quite often, they can be opportunities in disguise.

One of the primary components of 1-on-1 Management™ is a weekly 1-on-1 Meeting™ with your direct reports; a planned 30-45 minute, face-to-face session that provides the opportunity to communicate objectives, set expectations, review progress, coach, and – most importantly - listen.

I ventured across an excellent Blog this week called The Slacker Manager, written by David Zinger and Phil Gerbyshak (don’t be confused by the title – it’s not what you might think at first!). As I reviewed the last several Blog posts, I eventually found one by Phil entitled “You Are Your Only Competition.” His point is that each employee brings a different set of talents to the workplace and comparing one’s productivity with someone else is misguided. He starts the post with the following statement:

“As a manager, I have weekly reviews with each member of my team. We talk about 3 things:

1. What’s gone well (and how can we do more of that)
2. What needs improvement (and how can we improve faster)
3. What’s the general feeling of how things are going in relation to your goals and the rest of the team.

3 simple questions, but they get right to the heart of what we try to focus on, and that is living our strengths, shoring up the weaknesses enough that they don’t bring our strengths down, and how do we FEEL things are going.”

Weekly reviews – a page straight out of the 1-on-1 Management™ handbook! Savvy managers understand that employees engage in the workplace in direct proportion to the engagement skills of the manager. In this case, Phil outlines a process (weekly reviews) and a methodology (three questions) that will necessarily lead to a productive dialogue with an employee, the first step in employee engagement.

These questions are similar in nature to three others that can be used to initiate some very productive dialogue with an employee:

1. As a manager, what am I doing that I need to stop doing – that may be a hindrance to your effectiveness at work? (Stop.)
2. What do I need to start doing to help you be more effective in your work? (Start.)
3. What am I doing that that I need to continue because it’s working – it helps you to be effective in your work? (Continue.)

Again, employee engagement is mostly a manager’s responsibility, and it begins with strong communication. However, communication doesn’t just “happen.” It has to be a planned part of your management practices.

Weekly review sessions are a perfect place to start.