And if you don’t believe me, click on the link below:

Receptionist recording

Please listen to the audio above, it is a real company but I have edited out the names.

A clear corporate image is essential for communicating with clients, everything communicates and at every point of contact. Therefore, I am always surprised when companies put temporary staff or untrained staff on their reception desks to greet visitors and answer the phone.

People are the brand, they create an impression within seconds. The immediate impact that your front office make is crucial. It is often the strongest and longest, both verbally and visually. Get it wrong and it is very difficult to change the image that your customers have imprinted in their minds.

They say “you never get a second chance to make a first impression”.

Most economists agree that the worst of this financial meltdown is now behind us. Unemployment is at a 25-year high, it’s true, but at least the pace of lay-offs has slowed. If there was a doubt before, it seems safe to conclude that we’re going to make it through this mess. There will be enormous social costs. People have lost their livelihoods and their life savings. Seniors have seen their retirement nest eggs disappear; young people have seen their employment hopes vanish. But we’re going to make it.
The question is, what, if anything will we learn from this disaster? Already economists are subjecting their field to a long overdo critical review. In their thoughtful book, “Animal Spirits,” George Akerlof and Robert Shiller, suggest that economics has left out the human factor–the emotional components that drive economic behavior. Alan Greenspan has publicly acknowledged that his mental model of the economy clearly did not match reality. It seems clear that we’ll soon see new regulations put in place, new oversight and legislation designed to change the way the public sector referees the behavior of the private sector in economic matters.

But what if the problem isn’t economics? What if the problem is a business problem–a failure of management and an absence of leadership? Shouldn’t business and business schools be looking at their practices and precepts with the same critical eye as the economics profession? I recently wrote a book called Rules of Thumb a collection of 52 life lessons. I think three of them can help propel the thinking on these issues in the right direction.

Years ago, when America’s competitiveness appeared to be failing, two legendary HBS professors, Bill Abernathy and Bob Hayes, challenged business schools and business leaders to take a hard look at themselves. “Managing Our Way to Economic Decline”" became a must-read text. Isn’t it time for another such review?

What is the business of business school?  An what is the purpose of businss?

At least once per decade for the last 30 years we’ve seen American business go seriously off the rails. The reengineering fad, Mike Milken and junk bonds, the savings and loan crisis, the dotcom boom and bust, the Long Term Capital Management panic–only a partial, abbreviated history of business disasters–suggest that something systemic is wrong with the way business goes about business. An individual with this track record of crises would be a candidate for an intervention, a time out in a recovery center, and life-long participation in the 12-step program of their choice. Something is wrong–and it’s time to face it.

Business schools teach finance and strategy, marketing and HR, IT and operations management. Those are the courses of a trade school, not the developmental curriculum of a profession.

The first question business schools should teach their students to ask is my Rule #3: Ask the last question first. The last question is, what’s the point of the exercise? Jack Welch famously said it was to maximize shareholder value–a terrible answer in retrospect. Peter Drucker famously said it was to make and keep a customer. What is the answer that fits our situation in 2009, and beyond? Today, business schools need to teach students to ask the last question first–or risk taking their company down the old dead-end path.

The next piece of the curriculum has to be Rule #23: Keep two lists, one that holds what gets you up in the morning and one for what keeps you up at night. Managers and leaders have got to know themselves before they know their businesses. They’ve got to have passion for their work and concern for their world. Otherwise they’re just punching the time clock and risking everyone’s future.

Finally I’d teach Rule #4: Don’t implement solutions. Prevent problems. Everything that will be put in place as a clean up to the mess we’re in now won’t be enough if we keep creating new disasters. We need a new generation of business leaders who anticipate problems and prevent them from happening. It’s smarter, cheaper, and more effective than the every-ten-year clean up we’ve become accustomed to.

Every one of these three rules has two things in common. First, they cut across all the disciplines of traditional business school. They are ways of seeing the world, ways of making sense of everyday business realities. They teach a way of thinking and a way of synthesizing the world of work that every crisis–and every opportunity–shows us we need. And second, they are about people, not about business. They are about the human side of enterprise. They carry the message that work is personal. That each individual has a contribution to make and a decision to weigh. That we have to decide not only what we will do in business, but even more important, how and why we will do business the way we do it in the first place.

It’s time for new course-ware in the business of doing business.

This point may seem so simple, but customers want to know “what’s in it for me?”.

We have heard enough for one lifetime about the “war for talent”. But this doesn’t mean that leaders can ignore who is on their team. Last week I went to a seminar hosted by the Corporate Research Forum which, thankfully, injected new life into that increasingly tired debate over talent, knowledge workers and the rest of it. It is time to reframe this debate. What we should be thinking about, you see, are clever people.

Clever is a slippery word. It is never a good idea to be thought “too clever by half”. Many people are told at some stage in their lives that “you are not as clever as you think you are”.

But clever people are important. They create “disproportionate value”, in the words of the aforementioned Prof Jones and his colleague, Rob Goffee, who is a professor of organisational behaviour, also at LBS.

Who are these clever people? They work in R&D for pharmaceutical businesses, they develop new computer games for software companies, they are partners (or rising stars) in professional service firms, they are mechanics and designers in Formula One racing teams. But clever people are not all earning huge sums of money in the private sector. Some are also working in intensive care in children’s hospitals, or curating special exhibitions in museums.

What are they like, and why are clever people difficult to lead and manage? Having researched the subject, Profs Jones and Goffee have come up with a 10-point check list for managers.

1.Cleverness is central to their identity. They take negative feedback badly.

2.Their skills are not easily replicated. Not many people can do what they do.

3.They know their worth.

4.They ask difficult questions.

5.They are organisationally savvy. Their projects will get funded.

6.They are not impressed by corporate hierarchy. Job titles don’t mean much to them, but status does.

7.They expect instant access to the chief executive. If they don’t get it they may lose interest, slipping rapidly from obsession in their work to indifference.

8.They are well connected both inside and outside the organisation.

9.They have a low boredom threshold.

10.They won’t thank you. They do not feel they need to be led.

But there is also good (and slightly less daunting) news for business leaders. Clever people need organisations. Their work usually involves complex tasks that are performed in a team setting. They want “a high degree of organisational protection”, Goffee and Jones say. And they are more effective when they are well led.

Who is good at leading clever people? Sir Martin Sorrell, chief executive of the global marketing services group WPP, gets the professorial thumbs up. He has a lot of powerful creatives to deal with. In conversation with the authors he downplays the big impact he makes on his colleagues: “I’m a boring little micro-managing, number-crunching accountant.”

Too modest. In reality, Sir Martin constantly reminds his people that he is running a creative business. WPP’s boss enforces commercial discipline, offering the tough love of a benevolent guardian. He also uses reverse psychology: “If you want them to turn left, tell them to turn right.”

Do we risk over-estimating the importance of cleverness at work? Famously, the clever people at Enron were “the smartest guys in the room”.

Fred Hilmer, now vice chancellor of the university of New South Wales in Australia, but previously a McKinsey partner, business school dean and CEO of the Fairfax media group, says that, while you need some clever people, organisations with lots of them can go wrong fast. The global banking crisis would seem to bear this out.

Still, you need to hold on to your cleverest people, especially at a time like this. Try to create the right amount (neither too much nor too little) of sociability and solidarity within your organisation.

Where do clever people flourish? “In complicated value chains, where there is plenty of ‘unarticulated reciprocity’,” Prof Goffee explains. Build a culture that is hard to copy, and which will give you a significant competitive advantage.

The Quarterly: We’re here today with Bob Sutton from the Stanford Graduate School of Engineering, noted author and specialist on management and organizations. You did an article recently for the Harvard Business Review, “How to be a good boss in a bad economy.” Frame the challenge for us.
Robert Sutton: First of all, the article started because it seemed like every executive I know at almost every level was involved in layoffs, pay cuts, the threat of it. So, I was hearing from people everywhere. But the reason it matters and why it’s hard to be a good boss in tough times starts with a [principle] I call the “toxic tandem,” which I’ve stolen from a lot of good social psychologists who do experiments.

And it’s a combination of two things about power that are very well documented. One is that when people are in positions of power, for better or worse, they often become sort of oblivious to the needs and actions of the people who have less power than them. You can produce this in all sorts of ways-it’s very easy to produce in the laboratory. And the other part of the toxic tandem is sometimes called hyper vigilance.

The Quarterly: So the spotlight raises on you if you’re the boss in tough times.
Robert Sutton: The spotlight raises on you. They’re looking at you really closely. So if you think about the toxic tandem, you’ve got the boss, oblivious, and then the subordinates, even more and more worried. People tend to devote a lot more energy to their boss-or to their board, even, if they’re CEOs-to figure out what is going on. And they don’t engage as much with the people who are under threat.

And then the other thing about the toxic tandem that bosses really have to keep in mind is that there is a lot of research that shows that when people are looking at the boss and worried about what the boss is doing, they tend to assume the worst. So little, tiny signals get magnified.

I don’t think this made it in the article-it’s on my blog because it came afterwards. I presented the ideas to a group of executives. And this guy walks up to me and he starts describing his executive vice president and how one of the secretaries walked up to him and said, “When are the layoffs going be?” And he says, “What?” And then she went to explain. She said, “Well, it’s an ‘interesting shoes’ day for you.”  What this guy has a reputation of doing is he can’t look people in the eye when he’s upset about stuff, so he would always be looking at his shoes. They were saying, “The boss is having ‘interesting shoes’ day.” So from just the fact the guy walked around not looking anybody in the eye, she went straight up to him. So that to me is a pretty good sign he was oblivious to that, right?

The Quarterly: So the point here is that when times are tough, that has its own dynamic. But the thing you have to understand as a boss is that they are looking at you. They may have ignored you in good times, they may have paid attention when they needed to, but you’re suddenly under the spotlight in a way you haven’t been. So what do you do? What do you do to do it right?
Robert Sutton: Well, first of all, one thing I always like to emphasize is that I’m a management theorist. And it’s a lot easier to talk about management than to actually do it. So, you know, for readers of the McKinsey Quarterly and other-

The Quarterly: That’s your disclaimer, right?
Robert Sutton: But it’s not just a disclaimer. It’s one of the reasons I talk about management rather than actually do it. I see how hard this is on my various friends who are CEOs and how it just rips their guts out and how much they worry about it. But there is sort of a little recipe that actually goes back to some research I started with my now, I think, 92-year-old mentor, Robert Kahn, in graduate school. The recipe is prediction, understanding, control, and compassion.

The idea of prediction is that if some sort of stress is coming through, it does much less damage to people when they know when they are safe versus when they are threatened. Martin Seligman is the psychologist most heavily associated with this. But a good example of this, and this comes from one of the CEOs I know-the head of a nonprofit. He was describing to me that they knew donations were falling, grants were falling, and their stock portfolio was falling. Things did not look good. And all those things were sort of intertwined and part of the economy.

But his people were very nervous. So what he said to them was, “I promise you there will be no layoffs or pay cuts for 90 days; nothing is going to happen, so you’re safe until then,” so people wouldn’t come to work every day waiting for the other shoe to fall. So that is the kind of thing that gives people some bit of psychological safety. And also they know when to mobilize to worry about their lives.

The Quarterly: So don’t overpromise, but at least if you can give a certain window of stability, give it to them-right?
Robert Sutton: Yeah, and I’ve heard a number of CEOs in other places say that sort of thing. So the next thing is understanding. It’s very well documented that, independently of how stressful things are, human beings need to know why things happen. They need some sort of explanation. And there is sort of a challenge there, because if you give them too complicated an explanation, then they just get befuddled and freak out. There is an art to be able to give an explanation that’s complicated but not too complicated, so they can follow it. Part of getting rid of the fear is having people understand it.

So that’s understanding. The next one is control-if you can give people some control over the way it happens. A good example of this, which I talk about in the article, is some years back-this was when A. G. Lafley came on in about 2000 as CEO of Procter & Gamble, but they still had John Pepper as the chair-and John Pepper described how they learned a lot about closing plants. Procter & Gamble used to sort of sneak out in the middle of the night. But they learned that when they announce it in advance, tell them why, give people all sorts of exit options and places they can have control, and show compassion that-and Procter & Gamble has very good metrics-they would keep more good employees, they would get better press in the community. And the other thing, which was quite important to them, is that sales of the product in the local community would not go down so much.

And to me, the even simpler idea-as one of my friends, Michael Dearing, who used to be an eBay executive, always says-is that there is a difference between what you do and how you do it. It’s really quite clear that the worst situation, even if they are announced in advance, is when people go through multiple rounds of layoffs. The best people start leaving. The people who stay work less hard, they have mental health problems.

So to the extent that you can-and of course, in this current environment, predicting what’s going to happen is very difficult-but to the extent that you can not put people through multiple rounds of layoffs, you are going to be better off as a boss and also as an employee in all sorts of ways.

The Quarterly: Let me ask you about the “don’t”s. Don’t, you know, look at your shoes if you are normally an avoider of people when there are bad things coming. But what are some broader don’ts?
Robert Sutton: I think there is a really important subtlety that one of the managers I’ve talked to-who has worked at probably six or seven firms where she’s been involved in layoffs-has really emphasized, which is the rhythms and time span of emotion. And there are two parts of this. The first part is that when you, as a boss or decision maker, are going through this process of trying to decide whether or not to do layoffs, you go through all sorts of emotion. First you get angry, then depressed. But by the time you present it to your employees, it is old news to you and it is new to them. So you sort of have to back off.

There is another thing I was going to emphasize-and this is about taking a longer-term time perspective. The story in the article actually comes from Randy Komisar, and it’s about when he worked for a guy named Bill Campbell, who is famous in Silicon Valley for being a coach. Actually, it has been profiled in the McKinsey Quarterly before. Bill was famous for being this real warm, supportive guy. But [Campbell and Komisar] were involved in a startup that was once high flying and eventually sort of wound down. Bill treated everybody so well in the process-both emotionally and then he also went out on quite a limb to try to get people jobs and to sell the company in such a way to save them jobs-that even though the company was just basically winding down, none of the top management team left. And they are all very loyal to him.

That is sort of an extreme case, but I think it is important to remember that it’s a long life, and there are some times when companies aren’t going to make it. There are some times when you, yourself as a boss, are going to lose your job. People will look back and remember how you dealt with it. And you’ve also got to deal with your own conscience in the process. I think that’s a very important thing [to remember] because everybody sort of focuses on the short-term productivity.

The Quarterly: One last question: how do you deal with the folks that don’t get laid off?
Robert Sutton: When they see that it’s fair, they are more likely to stay loyal, suffer less psychological damage, and also feel more guilty and work even harder to help you. There is actually this sort of weird, sneaky part of it, which is that if the survivors are treated well, they kind of feel guilty because of that “for grace of God go I” sort of phenomenon. In fact, most of all the stuff I said about prediction, understanding, control, and compassion-whether people lose their jobs or not-has an effect on the whole system.

Tell the truth:

We all have an impulse to tell people what they want to hear.  Wise executives tell everyone the same unvarnished story.  Once you develop a reputation for straight talk, people will return the favour.

Encourage people to speak truth to power:

It’s extraordinarily difficult for people lower in a hierarchy to tell higher-ups unpalatable truths – but that’s what the higher-ups need to know, because often their employees have access to information about problems that they don’t.  Create conditions for people to be courageous.

Reward contrarians:

Your company won’t innovate successfully if you don’t learn to recognise, the challenge, your own assumptions.  Find colleagues who can help you do that.  Promote the best of them.  Thank them all.

Practice having unpleasant conversations:

The best leaders learn how to deliver bad news kindly so that people don’t get unncecessarily hurt.  That is not easy – so find a safe place to practice.

Diversify your sources of information:

Everyone’s biased.  Make sure you communicate regularly to different groups of employees, customers, competitors, so that your own understanding is nuanced and multifaceted.

Admit your mistakes:

This gives everyone around you perimission to do the same.

Build organisational support for transparency:

Start with protection for whistle-blowers, but don’t stop there. Hire people because they created a culture of candor elsewhere (not because they can outcompete their peers).

Set information free:

Most organisations default to keeping information confidential when it might be strategic or private.  Default, instead, to sharing information – unless there’s a clear reason not to.

- James O’Toole (Distinguished Professor of Business Ethics at the University of Denver) and Warren Bennis (University Professor at the University of Southern California)