Transcript of Loose Expectations are Dangerous

My name is Jack McGuinness. I'm the managing partner at Relationship Impact. We're a consulting firm focused on working with the executive or leadership teams of growing organizations, to help them get themselves in shape both structurally and relationally, so that the can can continue to do their best work. So again, a couple logistical notes. As I mention on most of our webinars, our slides are chock full of content, so they're a little thick with information. So if you don't like that, I'm sorry about that. But we hand these out or distribute these at the end of the session, and hopefully there's some good content here for you to take and use with your teams. Secondly, if you have any questions during the course of the discussion, please don't hesitate to ask them. And I'll... In the Q and a or the chat feed feature, just ask a question, and then I'll try to address it as best I can.

So with that, let's get started. This month's session of Great Leaders Build Great Leadership Teams is called Loose Expectations are Dangerous, and got a pretty good turnout for this, probably for a couple of reasons, because a lot of you are working from home. But also I think even early on when we announced we were doing this, I think it's a topic that's near and dear to many leader's and many people in organization's hearts, is expectations, we all know, can get ourselves in trouble down the road. And today is a little bit of a discussion about, why does it get in the way? Why do we let it get in the way? And what are a couple things we can do about it to make expectations more clear?

All right, so there's there's been a little bit of research done on employees in organizations, and LinkedIn and Gallup has done some studies around poor expectations, very frustrating to managers. Cap Gallup consistently says that only about half of all workers indicate that they really know what's expected of them. And so it's not an insignificant challenge, and I'm sure that all of you know that lack of clarity, lack of consistency around expectations can cause downstream problems. And so what I wanted to start with is just talk to you a little bit about a few examples pulled right from the mouth of babes as they say, or right from our clients.

A few scenarios, one is kicking, kicking the can down the road. And what I mean by that is, rather than addressing on being clear upfront, there's a tendency to, "I'll take care of that later," or "We can discuss that later." And lots of time goes by, or even not a lot of time goes by, and things have to be taken care of. And because there was a lack of clarity when something's executed on, we get ourselves in trouble. So there's a good example of this. One of the clients I'm working with, when they first started, it was just a few of them, and now they're 100 plus. And the CEO kept saying, "I'll take care of you, I'll take care of you," to the early principles in the firm. And he likely meant it, that he was going to take care of them. But what taking care of meant was different to all the parties involved. And when they... The founder actually stepped back and tried, and put some pen to paper, as they say, around how he was going to take care of the three principles.

The expectations were just way, way wide apart. The principals were expecting some ownership. The principals expecting to pay more with less ownership. And so you get the puzzle, instead of clarifying up front. And even if you don't know, just saying, "Hey, I don't know how we're going to deal with this. I'm going to... We're going to make sure that we address it at the appropriate time." But kicking the can down the road because we're uncomfortable about it is never, never a good thing.

Faulty assumptions are another thing. Rather than gaining clarity and taking a step back for various reasons, which we'll get into in a couple of minutes, we've seen individuals on teams, could be the CEO and a VP, it could be two VPs, talking about an important issue and down the road something's executed on, and there's a wide gap in terms of what those expectations look like.

Example of that, I was working at the end of the last year with a trade association that has a big event coming up, recently canceled, but nevertheless an event coming up, and getting close to the event, which was last week, the CEO ripped one of the VP's heads off by saying, "This is not what I expected for this particular panel that they were having." And her response was, "We talked about this upfront." But they did. They said, "We're going to have a customer panel." But they didn't talk about what the expectations for that panel were all about. And they got themselves in a little trouble. Fortunately, in this case, they were able to recalibrate, and when the actual event is held, there'll be able to deal with it. But you get my drift there.

Pulling back on overdone incentives. Working with another client right now that has a little bit, not so much kick the can down the road, but has set unrealistic expectations upfront with perks, company cars, golf club memberships, a whole host of other things, expenses for family dinners that type of thing. And now the organization is a $40 million organization, has moved from nothing 12 years ago. And rightfully so, the CEO and founders saying, "Hey look, we need to right size our compensation benefits and perks structure." But you know what happens when you pull back on incentives, right? And so it's almost like setting false expectations upfront. Unintentionally, likely, but not thinking it through to start.

Another one we see quite often is, "Isn't it obvious?" And there's a great example of this, there's a number of organizations we've worked for over the last several years, where the CEO will... The team will be asking questions like, "Okay, we need to get some clarity on our strategy for the next year, 18 months." And the CEO gets a little frustrated and says, "Our strategy is to grow, and in a manner that's consistent with our values." And while that's true, there's obviously some lack of clarity and things left up for interpretation, particularly about, grow to what? And grow how big? Or even if you say grow how big, how are we going to get there? And so, we hear comments like, "I shouldn't have to tell you, it should be obvious to you."

And so these are just a few examples that we've pulled from the work that we do with clients that we work with over the last several years. And you know, so kicking the can down the road, not getting clear on assumptions that we're making about important initiatives, not taking a step back to really think through what we want the business model to look like upfront. And then making assumptions about, or not having the discipline necessary to really define what are our priorities and how are we going to get there, leads to the, "Isn't it obvious?" type of scenario. So these are a few scenarios that we've seen, and there's a couple of root issues behind all of these scenarios. And they fall into two categories. Discipline and avoidance. And so let's first talk a little bit about discipline.

Unclear and shifting priorities, from our perspective, is really a lack of discipline in terms of establishing what's most important, and sticking to what's most important. Or at least having some mechanism for agreeing when priorities need to change. And so that's something we see quite often. And that even the most... Even organizations that are quite structured, or CEOs that are often structured, fall into this discipline trap when pace happens, when crisis happens, whatever it might be. And those are... It's okay, but it's really important to have a mechanism to get a team back on track, in terms of where we're going and how we're getting there, and what those priorities are, and what the mechanism is for talking about when priorities change.

Inadequate assumptions. We see this as well, and this is a discipline challenge as well, because if you don't take the time to step back and talk about... And I guess this comes down to... In most cases, the organizations that we're working with often have a good sense of their strategic direction, but oftentimes do not have a good sense for how they're going to operate to that strategic door, execute on that strategic direction. Each functional or business line leader may have their understanding from their narrow perspectives on how they're going to reach that strategic direction.

But how they get there has not been really talked about in terms of how they're going to operate together, what does it mean to execute on a, for example, a customer concentration problem. It's a classic example we see in a lot of growing companies, is organizations, when they're young, have customer concentration issues. You know, reliance on one or two or three or five customers, and the strategy will be, "We have to differentiate," or "We have to reduce customer concentration risk," and those are great strategies, but how are we going to get there? If we don't talk about how we're going to get there, we will trip over each other. I have an example of that that I'll share with you in a couple seconds here.

So unclear and shifting priorities, inadequate assumptions, a big deal. There's an organization we work with, it's a 10 year old financial institution that has a CEO that's a great leader. Very dynamic, been involved early on in the organization, on all facets of the organization, has built a good team of talented people. But now they went public about three years ago, and his role has changed to having to deal with governance type of issues, investor relations issues, and strategic growth type of issues. And so unfortunately without him in the mix, his team had been struggling a bit. And so, figuring out what's most important, who's responsible for what cross organizational initiatives they need to deal with. How do we prioritize with limited resources, all the stuff that organizations deal with all the time without him in the mix.

His team has gotten to a point where they're very much operating in these silos, which are not uncommon, but without clear expectations for... If M and A and acquisition is one of their targets, how do we attack that acquisition, and how do we execute on that acquisition? And so without having alignment on how we're going to execute, things can go out of whack. And I talked about the customer concentration issue. This comes a has come up several times in the work that we do. Working with a professional service firm earlier last year, and they had a pretty significant customer concentration risk, and the team agreed we have to go out, and the lines of business leaders are three different lines of business, we have to go out and differentiate ourselves, and reduce that customer concentration rest.

So what happened three months in, they're at three lines of business leaders, and their individual teams are out calling on the same customers with slightly different pitches, and lack of integration of how their services overlap with each other, and obviously looked kind of spastic in the market. Real life example, and one that's very clear on when you don't differentiate, or when you don't set clear expectations upfront, you can get yourselves in trouble. So lack of discipline is not an insignificant issue. Avoidance is another one. You could maybe combine these two. But we see them as fairly distinct issues.

Avoidance. Look, tension is a natural part of any leadership team, and to make progress and to innovate and to really come up with the best solutions, tension should happen on any team. But unfortunately what we've found in the work that we've done over the last 10 years or so, is that tension is there, but many executives tend to avoid tension, as most adults don't really like conflict. They don't like having tough conversations, or confronting each other. And some organizations are not very good at disagreeing with each other. So what that does in terms of expectation setting with a leadership team, people tend to avoid the tough discussions they need to have when setting expectations on strategy, on how we're going to execute on a particular strategic initiative. So without the ability to discuss, debate and gain clarity, for example on how their roles need to support a particular initiative, teams can get out of whack very quickly.

I know that when when executives kick the can down the road about issues like compensation or ownership or promotions or restructuring, frustration often brews or permeates, and it can chip away at trust on teams. And so avoidance behavior, which is what we found, is fairly natural. Because people ask us all the time, "What is the number one thing? What is the thing that gets in the way of leadership teams being as effective as they possibly can?" And there's a bunch, no question about it, but probably the number one thing that we see is the team's ability to listen to each other and compromise. And I would take that a little bit further, and disagree well. That really important skill gets in the way of teams being as effective as they can, and avoidance is a big part of that. So really, from our perspective, lack of good expectation, getting clarity among teammates or with the CEO on expectations, either individually or collectively, falls on two things: A lack of discipline, and often an avoidance behavior.

Any questions so far, please feel free to reach out. Okay. So what's the spectrum of impact then, that inconsistent, unclear expectations can have on a leadership team? Well, clearly frustration. Frustration among teammates. I'll give you an example, about the VP and the CEO who were talking about a customer panel at a... You know, relatively not insignificant thing, but not a hugely important thing, because they didn't get in sync on what their expectations were for this event. The CEO was very frustrated, and there's two sides to that frustration, to which we'll talk about in a second. But frustration can brew on any team.

Second is trust erosion. The more you kick the can down the road, the more people don't have the discipline, or avoid the tough conversations they need to have to get clear on expectations, the downstream effect is things are going to get out of whack sometimes. So people start pointing fingers at each other. Natural part of human behavior. Unfortunately there's also a cascading effect that happens, and these are from left to right in order of impact that they can have in an organization. So folks are watching how the executive team or leadership team or management team or whatever you call it, works together. Not so much how much they like each other, or enjoy each other's company. More about how they hold each other accountable, how they work with each other to get clear on expectations, for example. And the impact of leadership team members not being on the same page contributes to the building of silos between organizational units in an organization could be that a line of business or a functional unit, and that can have an increasingly broader impact if not taken care of.

And then the ultimate challenge here is poor expectations, if expectations aren't clear. So for example, again, I'll use a stupid example with this event last week that didn't happen, but it was this trade association where the customer panel didn't go, maybe it wasn't set up the way they wanted it to be set up. And so there's an impact on their membership base if it wasn't set up properly, for example. Now it has impacts on services, and it impacts on... Bad expectations contribute to inefficiencies in organizations. They can relate to service problems, they can relate to, we're not being as innovative as we should be. So there are multiple impacts that emerge from inconsistent or unclear expectations, as I'm sure you've all seen.

So what do you do about it? In very, very simple terms, there's two things you need to do. And they were very obvious. Be disciplined and don't avoid. I know that sounds very simple, but get more discipline and don't avoid. And how do you do that? And so there has to be, and what I'm showing you here in the next slide is that it's sort of a process to recalibrate how you set expectations. But then this is probably an overdone slide on... This is pretty simple. It's like, you have to acknowledge that you got a challenge with how you set expectations. It could be as simple as, we make the implicit stuff, we have to make it more explicit.

But there has to be an acknowledgement that we're not doing a good job at establishing expectations, and it's getting us in trouble. And so, setting some principles. You hear me talk about principals all the time, and really this is just, what commitments do we need to make each other, to make sure that we're doing a better job, we're not avoiding, we're getting more discipline around setting expectations. Could be as simple as, I'll give you a couple of examples here. Make the implicit explicit. Both parties have a responsible for clarity of expectations.

If for example, a CEO is not being clear, it's important to ask the question, "I'm not sure I'm getting, not sure I'm following you here. You may think I'm stupid, or you may think I'm being obstinate, but I'm not getting where you need me to go. This is my under..." Or alternatively, "This is what I think I heard you say." Those types of things are really important. Don't make the assumption, don't leave with a lack of clarity and say that, "Well, I think I understand where he's coming from. I think I understand where she's coming from." Get the clarity you need.

And that leads to the next one, is expectations should be a two way discussion. It shouldn't just be the CEO or the VP to his or her team saying, "This is what I want to see. Go forth and execute." It's fine to say that, but there has to be some level of discussion, particularly when what we're talking about is important things here, important priorities. And then obviously, linking expectation to key priorities is important. This doesn't have to be a long, drawn out process. It just simply has to be, if you're not good at setting expectations, you have to take the time to step back and commit to doing things a little bit differently than you've done them before.

Next, really important that you... If there are some trust issues that have been broken down, that those trust issues are worked on. You can't, if there's lack of trust on a team... Trust is obviously foundational for any team to work effectively. And for folks to be able to dig in and not avoid, they really have to work on those trust issues. Lots of the webinars and writing that that Gail and I have done over the last several years has really focused on building trust, and the importance of trust on leadership teams. So doing the work necessary to repair trust, which involves starting with you if you're part of the trust problem. What am I doing that's getting in the way? Secondly, having some patience with your colleague as we move towards operating a little bit differently. So those are just a couple of things, but you can't assume that the trust is going to get better just because you have a principle, I guess what I'm saying.

And then, go forth and execute and see how it goes. But most importantly, commit to saying, "Hey, we agreed, CEO, that if don't understand where you're coming from, it's okay for me to say, 'Hey look, this is what I hear you said, but I'm not... I just want to get clear.'" And dealing and having some patience with each other. But most importantly, really important to acknowledge that there are some problems with expectations, and then doing the right work to gain the discipline necessary, and building the fiber necessary to not avoid the tough discussions teams need to have.

One other thing I wanted to share with you, as it relates to this, the left side of this impact spectrum. I skipped over this slide real quickly, and I didn't mean to do that. So I just want to go back to it for a second. There's a pattern of behavior that we see on teams that relates to expectations in a whole host of things. But it relates to this whole issue of avoidance. And I'll give you an example. This is a typical avoidance scenario. Teammates avoid having the tough discussions they need to have, sometimes they talk negatively about each other to others, could be with the CEO, could be with each other, but often not directly. They directly or indirectly undermine colleagues with whom they're at odds. And that could be as simple as just saying to their teams, "Yeah, don't talk to him unless you run it by me first."

Or things like, "Well, that's just a stupid idea. I don't know why we're doing that," rather than just having the conversation you need to have. A situation sometimes gets out of control, and the CEO often has to step in to temper the situation. And you can imagine teams that don't set expectations well, if they also have an avoidance challenge, the downstream impacts, unless you have a Charles Atlas type CEO that can come in and solve all the problems for the team. And believe me, we've seen that happen as well, but it doesn't last long, because the CEO's frustration gets out of whack as well. And anyway, there's lots of challenge wrapped up in this whole avoidance dance scenario.

So let's wrap it up in a nutshell. Just to summarize. Inconsistent, unclear expectations have impacts on organizations. Anything from frustration that leads to some trust issues, to a cascading effect in the teams or the functional and business leaders that relates into some silos, to ultimately some efficiency challenges, some customer service challenges, some lack of innovation challenges. And without taking a step back and making sure that you acknowledge what the problem is, establishing some principles for really taking care of how we're going to get more discipline and how we're going to move into the tough conversations, it's really hard to get back on track. So acknowledge, agree to the principles, establish a strong foundation, a relational foundation, and then monitor how you're doing with it, and make sure people are able to say, "Hey, we're still off track here. Let's get back on track."

So that's all I got for you. I would love to entertain any questions you have, if anyone has anything. And while I'm waiting there, I've moved to... I used to provide a complimentary assessment, and what I'm doing now is, I'm giving you a link to our How Effective is Your Leadership Team quiz. So if you want to jump on as you're sitting at home, working remotely and take this quiz and see how you view your team, I's be happy to review those results with you.

All right, let's see here. Question, move to the chat.

Okay. Thank you, Rita. "No questions today, I just want to say I wish you and your family safe and well during this [inaudible 00:32:15]." And then a couple other folks said, "Good job." Well, thanks again for participating in this month's webinar. Next month's webinar is going to focus on lessons I'm learning with the CEOs and executive teams that I'm working with, on how to manage or lead in a crisis.