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Episode 31: Building your collaborative A-team

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All Xero In episodes

Hosted by Jeanne-Vida Douglas and Rob Stone

Hiring, firing: They’re two of the most dreaded words among leadership teams everywhere – and rightly so. What exactly should you look for when you’re building your dream team? And how do you know when it’s time to let employees go?

This week on Xero In, Rob and JV are joined once more by Steve Vamos to talk about building a collaborative work culture that will last. With many decades of experience in leadership and management roles, Steve shares insights that will help you when it comes to the recruitment and HR process.

“I think that probably the biggest thing you can do in hiring people is spend time with the person you’re about to hire and find a way to get them to help you on a project,” Steve said.

Tune in to discover how to build, and keep, your ultimate collaborative team.

Small business resources:

How to build a great small business team – Xero Small Business Guide

Job Vibe – web tool + app for team and culture building

The Five Dysfunctions of a Team by Patrick Lencioni

Episode transcript

Hosts: Jeanne-Vida Douglas [JVD] and Rob Stone [RS]

Guest: Steve Vamos [SV]

JVD: Welcome back to Xero In, I’m Jeanne-Vida Douglas and I’m joined by Rob Stone.

RS: Hi JV.

JVD: And I’m so excited today because we’re going to be joined again by one of the most interesting business people I think in Australia, Steve Vamos and this time we’re going to focus a little bit on his experience around building teams.

RS: Yeah and also when is the right time to let staff members go. He’s such a good people manager and just a wealth of experience when it comes to a leadership role so I can’t wait to hear what he has to say.

JVD: Let’s switch over to Steve.

JVD: Today we’re joined by Steve Vamos who’s headed up some of the world’s most successful companies including Microsoft Australia, Apple Asia Pacific and Nine MSN and steered these companies through some pretty challenging times. He’s currently the non-executive director on a number of corporate boards and heavily involved with the startup community. Steve, thanks so much for joining us.

SV: Hi, good to be here.

RS: In your career you’ve hired countless people and you’ve also had to performance manage people. I always come from the lens of, you know, you hire an attitude and you coach the skills later on. So you hire on the how and you develop the what. What are some of the lenses that you look at people through when you’re trying to find the right people for an organisation?

SV: I think hiring is one of the hardest things you have to do and certainly my success rate isn’t as high as I would like it to be. I think what’s happening, from what I’m picking up around business, people are expecting a lot more interviews. There’s a lot more conviction around testing, you know, psychometric and other testing whereas back in my day it was a little bit suspect. Probably because anything like that was fluffy and was doubted.

I think that probably the biggest thing you can do in hiring people is spend time with the person you’re about to hire and find a way to get them to help you on a project or something. Get to see them at work and then finally the most important is the reference checks, really work hard to find people they haven’t given you the names of who may be one degree of separation between you and them and find out more about that person because, you know, a lot of reference checking that is done in the process is just not effective because…

RS: It’s a stacked deck already.

SV: Well if you ask me, you know, you want to talk to two people about me, I’m going to tell you the two people that say the nicest things about me, not the two that are going to say the worst things about me. So I think you have to work over time to get those other perspectives.

JVD: All industries need to constantly change now and need to be able to create systems that adopt change quite easily. The collaborative management approach fits into that but not all people fit into the management approach and I’m not just thinking of managers here. There are people who don’t feel comfortable giving their point of view, who don’t feel it’s their place to be involved in the generation ideas and change, who are actually far more comfortable turning up to work, doing a specific job and going home afterwards.

Does collaboration always fit all industries?

SV: Look the word collaboration is tricky.

SV: What’s happening in our world today is things are changing and customers have access to far more information and options than ever before and whilst we talk about a low growth economy, the truth is transactions are booming. What’s happening is inefficient income and expense is being washed out because people are finding better, more efficient ways of getting things done. And that’s what’s happened in media and advertising is that, as online and digital media has grown, people are spending less where they don’t know or don’t think they’re getting value and more, where they can see they’re going to get value which is through that, the interactivity of digital media.

SV: So customers now have a holistic view of their life and the world and they don’t like the fact that a lot of businesses make them behave or interact in a way as if they’re not known or they have to go through different hoops to get something that’s related to something else. So what’s being forced is the move away from functional silos to a much more networked organisation. Now there’s nothing wrong with hierarchy and management and functional definitions. What is wrong is when the leaders don’t show those functions where they interconnect and really formalise those interconnections.

So that when I’m in product development I’m talking to sales and I’m talking to marketing about revenue and usage. I’m not isolated in my little world of product development. So that cycle of interaction between revenue, usage and product is continuous, continuous and that we all see the big picture. So the salespeople understand the audience and they understand what it takes to evolve the product. Marketing people also understand those things. So in the old days when things were slower and we were more siloed in organisations, the boss could say you’re sales, go get me the revenue, you’re marketing, go and make sure we’ve got lots of customers wanting our product, and then you’re product development go do it.

It’s not enough anymore. You have to get them in the room together and say here’s what we’re trying to accomplish, the three of you need to interact all the time because we have to evolve our product and service every day consistent with what we see in the market and where we see the revenue opportunity to be. It’s a very, very big change.

RS: In larger companies, what’s your thoughts around inertia via consensus where you have all these various silos working closely together but there’s a weight of numbers so you go with the majority versus say a Steve Jobs where he comes in and just completely there, right saying “this is where we’re going, we’re going to strip away a lot of the other parts of the business and just focus on one marquee product”. Is there a right or wrong answer? Where do you think one’s appropriate and the other one’s not?

SV: I think that what Jobs brought to Apple was focus, the willingness to make tough decisions and prioritise. And clarity. You know, I think that all organisations need that. Not all leaders are Steve Jobs obviously, but there are ways of – of accomplishing that by spending time with your leadership team, the people around you and making sure your management is good, they’re aligned with you and they’re spending their time making sure every staff member is connected to your big picture purpose, the priorities and the way you want to behave. So that just comes back to what I’m saying is that you have to work extra hard as a leader, or as a leader in an organisation, to keep your people aligned.

And if you’re not sure what you’re aligning to them to, you need to work with those above you to get clarity. And until you get clarity and alignment you’re in trouble, you’re in danger. So being clear and aligned; companies with great customer service are generally very aligned. They know why they’re there, they know what’s important and they know how to go about their jobs. They know what the expectations are. That’s why so few deliver great customer service because the leaders of most organisations don’t spend enough time on getting their organisation aligned; getting people to understand the big picture.

JVD: And is this because people come from a specialist background? Sort of engineers come into engineering companies and end up running engineering companies and they’re not necessarily people-people at any stage. So these are the skills that all leaders need to develop as they’re coming through and I guess a lot of them – and I’m totally speaking for myself here too – are quite scared of the idea.

So how do you overcome that?

SV: Look, I think it is a function of our kind of industrial-age past.

And most leaders of large, certainly large, organisations and many small to medium organisations are people that are probably in their 40s and 50s and 60s, maybe some in their 70s and 80s who were brought up in a world where you were expected to be in control or look like it, not make mistakes or hide them well, and know the answer to questions you were asked, or question the question, or shuffle around the question. We were expected to know. We were expected to be in control. In a slow changing world that mindset is okay, in fact that mindset is still okay today for things you don’t want to change.

What I’ve learnt by being in crazy volatile undefined environments is that control is an illusion. You’re deluded if you think you’re in control.

I mean who controls anything nowadays? And hate the words, you know, “own the customer relationship”. Well you don’t own the customer relationship, you embrace the customer and hopefully that customer will bless you with ongoing business. But you don’t control it. You have to care, connect and enable. Not control. Care about those around you, connect with them and help them. Instead of being afraid to make mistakes – which is a huge issue in our business cultures – you have to be clear about your change agenda and then encourage people to fail on the road to learning because there is nothing you are good at today that you didn’t get good at by making mistakes. Nothing.

JVD: Now, is part of the challenge actually measuring success of cultural change? Because we can all measure the number of widgets we make. We can measure the amount of sales we make and the margin we’re winning and all that kind of stuff. Measuring people change, measuring organisational change, setting KPIs around it. How do you do all of that?

SV: Let’s talk about culture for a minute. Because culture’s complicated. Because culture is actually an output of why you do what you do, how you do what you do and what you do. That defines your culture. So often when we talk about culture we mean behaviour. So if we talk specifically about behaviour, any organisation if it takes the time can sit in a room with its people and say “what are two things that we do when we work together that we don’t like, just pick two”. One or two. It could be we turn up late to meetings, we talk nasty, say nasty things about each other behind each other’s backs. We don’t make tough decisions, for example, blah and blah, whatever. Get to the bottom of the two things that stop you enjoying working together or being productive together that are behavioural attributes and then when you’ve defined those commit yourselves to saying, ‘we’re going to get good at those’.

Now, how do you measure it? The way you do it is you get feedback and there’s really three ways. Don’t let the HR people overcomplicate this.

[Laughter]

When it comes to the way you behave you’re either a role model, you’re acceptable or you need development. It’s one of those three. So turning up to meetings on time, are you a role model, acceptable or need development? Get that feedback from the team.

And when I was at Ninemsn one of the biggest behavioural issues was our content producers all saw themselves as siloes. So if we wanted to introduce a new logo, a new navigation or a new format, they’d say go away, you’re not going to do that on my site.

JVD: Right.

SV: So the lifestyle or the news or the sport or the travel leaders would say, “No thanks I don’t want that” and what I had to do is say, “That’s unacceptable behaviour, the network comes first, so you as leaders of your areas need to accept that what we do is defined by our network needs”. So we made Think Network First a behaviour we expected of those leaders. A couple of them changed a couple of them didn’t, and they ultimately didn’t stay in the business, because they weren’t going to play as part of the team.

So it’s about being really clear about the behaviour you expect and then giving very direct feedback.

RS: And Steve, you’re advising many CEOs, you’re involved with a lot of interesting startup companies as well as being directors for a lot of big players in the Australian stock market. What, I guess, tools have you seen that you wish you’d earlier in your career when it came to helping people management and also what do you see the gaps are still out there in the market, where you know, there are other tools that can come in and address problems that you see that could help people manage other people better?

SV: That’s a great question and I think that certainly the HR space is an area where a lot of technology innovation is now starting to happen – especially with mobile phones where you can reach your people wherever they are and through apps on mobile phones you can interact and communicate. An example of a company that I’m involved with that is trying to do something in this space is Job Vibe which is a combination of a web app and a mobile app which is focussed on driving feedback amongst teams and when they celebrate something they’re doing well together – that success is shared in a buzz and if there are things that are getting in the way of good performance those things are shared as a fix and then the team has a look at that and decides what they want to do about fixing that problem.

So I think applications like that which make teams better, help teams work better together is a real opportunity.

RS: I love that because I often think you can tell a lot by a company about what they celebrate and really drives home for that.

SV: True.

RS: And what’s your views on the future remuneration structure? Because obviously when we’re asking people to be more creative and not just siloed like in a production or a canning factory. You know, the remuneration based on money is less effective and there’s lots of studies that point to that. So the impact of purpose is obviously increasing very much within companies. But where do you see the end game will be for remuneration structures?

SV: Look I’ve been on and am on remuneration committees and I have to say that it is a really interesting and difficult area to kind of get your head around in terms of where should we be going and where are we today and are we in the right place. I guess, the most simple way to say this is that with remuneration you have to be fair. So to the extent possible understand the market, understand the relativities within your company and make sure that people are paid in a fair way. Because I think that’s what people expect. They want to know that where they’re paid is fair relative to others in the organisation and fair to those external they might compare with.

If you’ve nailed that you’ve probably nailed 90 per cent of it, the other 10 per cent is spent a lot on is it short term incentives, long term incentives, how do you compensate sales. You know, I’m less switched on about that, or less a believer about that, because as a salesman I wasn’t motivated by money, I was motivated by hitting my target and beating it and then at the end of the year if I did, I was real happy with the money I got. But the money didn’t motivate me.

RS: Do you believe it’s better to kind of coach the underperformers, focus your time in the middle section or really double down on the top performers?

SV: Look, as long as you’re having regular and honest conversations with your people and in particular those who aren’t performing well, I don’t have an issue if you take a bit longer to manage them out. I really don’t. I think that that may be counter-intuitive. A lot of people lament, gee I took too long to deal with that. I always say, “well did you deal with it?” And the answer is “yes”, and I’ll say “good”.

So, a little bit of humanity around that which in a sense is just common decency means that the legacy of your action ends up being a positive for those who are left in the business or are still in the business. I remember after having to do some layoffs in a particular environment I was in, how a number of employees came up to me and said, “Gee I’m glad I never had to do that and the way you handled that was really, was really good.” If you can, if you can get that sort of reaction from the people who are in the organisation after you’ve let people go, that’s pretty good. And, you know, I always say there’s a decent, humane way of saying anything if you choose to put in the effort to do that. So giving feedback, performance feedback, is something that can be done in a really decent and humane way.

RS: Could you give us some examples of that? You know, the way that you have those conversations?

SV: Yeah, so look here – the big turning point for me in managing poor performers was to realise that I don’t have to be the company in that I’m Steve, I’m a human being and I’m representing the interests of the company here. And what the company needs of someone in this role is X and where you’re at in delivering on your role is over here, it’s Y. So let’s talk about that. Let’s talk about what the disconnect is between the way you’re performing and the expectations. Is it something that I’m doing? Is it that you don’t have clarity? What is getting in the way of your performance? And listening and asking questions. And then, in a sense, being the intermediary between the person and their job rather than the company and that person.

And then by virtue of stepping back a little, this took me years to kind of figure out, let me tell you, it’s not something I suddenly learnt day one. I mean this took me years to realise I don’t have to take it personally. So then what you’re doing is saying I care about you the person as much as I do about the job and if this mismatched it’s not good for either of us. So we’ve got to confront that and we’ve got to talk about that. And – and then over time you continue those conversations you get to a point of saying, “you know what, it’s not working and you are going to be better off going somewhere else”. And eight times out of 10 people who you bump into down the track will say, “thank you, because I wasn’t in the right place for me, and I’m much happier now”. Unfortunately, two of them two out of 10 don’t like you and never will like you.

[Laughter]

JVD: Steve, I want to say thank you for coming in today because this has been a fantastic conversation.

RS: Yeah, thanks so much.

SV: Well, thanks for having me. I appreciate it.

JVD: Thanks for joining us.

Now wasn’t that a fascinating conversation really about a time of immense change in Australian corporate culture.

RS: Yeah, just incredible, the stories that he shared.

JVD: Absolutely and drilling down into that cultural change within Nine MSN and how he not only expressed it himself but communicated it out throughout the company.

RS: Yeah, and a real master of collaboration and distilling that whole illusion around control.

JVD: Thanks again Rob.

RS: Thanks JV, bye.

 

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