Chip Headley

Lessons from the NFL

September 28, 2017 Chip Headley Comments 0 Comment

Last year one NFL player chose to sit rather than stand for the National Anthem before a game. Later, he began to kneel for the Anthem and was joined by a handful of other players. President Trump weighed in on Friday at a political rally and in a series of tweets. The NFL commissioner called him divisive, ignoring the divisive action that started this in the first place. The President responded, and things escalated.

On Sunday, over 200 players took a knee for the National Anthem. Others locked arms in solidarity, while other teams decided to stay in the locker room for the Anthem. Players were booed by some, cheered by others.

The league is in a tough spot. They have been maneuvered, or put themselves, into a difficult situation. If they support their players they risk further alienating a significant portion of their fans. President Trump has called for a boycott of the NFL. Overnight ratings from Sunday’s prime-time game were down 8% from the previous week, which were down 17% from the season opener. It is undeniable that ratings are down. Is this because of the player protests or are other factors in play? Only time will tell.

If the league supports the fans that are boycotting or outraged at the player protests they risk alienating their players. What happens if the league orders the players to stand and they choose not to play? The league has chosen not to enforce its own rules.

The rules regarding the anthem are found on pages A62-63 of the league’s game operational manual:

“The National Anthem must be played prior to every NFL game, and all players must be on the sideline for the National Anthem.

During the National Anthem, players on the field and bench area should stand at attention, face the flag, hold helmets in their left hand, and refrain from talking. The home team should ensure that the American flag is in good condition. It should be pointed out to players and coaches that we continue to be judged by the public in this area or respect for the flag and our country. Failure to be on the field by the start of the National Anthem may result in discipline, such as fines, suspensions, and/or the forfeiture of draft choice(s) for violations of the above, including first offenses.”

So, what can our organizations learn from the NFL? Two things stand out for me.

First, at the height of his career, Michael Jordan was asked to publicly to endorse a Democrat for the Senate race in North Carolina. Jordan refused to do so, reportedly saying, “Republicans buy shoes, too.” Whether Jordan actually said this is in some doubt, but the sentiment is correct. The NFL has allowed a situation to develop that has alienated a number of their customers. The damage may be permanent.

Second, the NFL had a rule in place that addressed this very action. They could have intervened the first time a player sat or kneeled. They chose to act in a manner inconsistent with their own stated policy and the protests escalated. The argument can be made that the policy itself was wrong. If so, the league should have determined that the policy was not in keeping with their values and changed the policy, but they didn’t. Now they have to deal with the consequences of their choices. It is almost impossible for the league to now enforce a policy that chose to ignore. Changing the policy now is also fraught with difficulty.

The NFL is facing a number of disruptions to its business model, from CTE concerns, to cord cutting, declining attendance, and now a portion of their customer base who have tuned out. Boycotts rarely last, but I believe this is different. I always saw the NFL as a diversion, a time on Sunday afternoon to cheer for my team and enjoy time free of thoughts of work, politics, and the everyday stresses of life. I stopped watching because it isn’t fun anymore.

Taking controversial decisions may be the right thing for our organizations or for each of us individually. It is important to understand that freedom of speech, and positions or causes we support are not without consequences. When we take positions that alienate our employees or our customers we have to be ready to deal with the fallout from our positions. Sometimes right is right, regardless of the consequences, but that does not insulate us or our organizations from negative outcomes.

This is why I believe in values-based leadership. It gives us a framework or a moral compass to guide us when we make decisions on what causes to support, how to treat our teammates, and how we interact with our external stakeholders. Values provide a guide to aid our actions. Values give us a rock on which to stand. Using the NFL’s situation as a cautionary tale for all of us, I encourage you to review your stated values. Are they what you really believe? Are they what you are willing to stand for regardless of the consequences? Do your policies and actions align with your values? When our values drive our behavior we have confidence in our actions.

New Beginnings

September 1, 2017 Chip Headley Comments 0 Comment

Recently we relaunched chipheadley.com with a new more focused approach. This got me thinking about new beginnings. I realized that our lives are all about new beginnings. From learning to walk, going to school for the first time, first date, first apartment, marriage, new job, first child, etc. It is also about moving on after the loss of a partner, parent, child, business, or dream. Life is a series of new beginnings.

I’ve become focused on being intentional around each new beginning. This starts by asking myself and our team, “what does this make possible?” This changes my focus from overly excited about positive beginnings or dwelling in how things used to be and orients my mind to make the most of a new beginning.

For example, when my former partner and I unexpectedly had to sell our self-storage company a few years ago it allowed me to take some time and plan the next chapter of my life. It wasn’t what we wanted. It wasn’t the plan, but our financial partners wanted to take a different path. Our plan was interrupted. That new beginning led to the development of a plan that resulted in the founding of Artistry Hotels. I figured out how to spend more time with my family, especially my wife. I created a plan to finish my doctorate (I’m still working on that one). A new beginning that we didn’t want, made a new path possible. In this case, one that is challenging professionally and rewarding personally.

New beginning can be an act of intentionality. We don’t have to stay where we are. We may not be able to affect change overnight, but we can change our story. It may be corny, but it is true, a journey of 1,000 miles begins with a single step.

New beginnings can come from serendipity. Intentionality is important, but leaving enough margin in our lives for serendipity is too! I’m working on that balance. I hope you are too.

New beginnings are all around us. What does your new beginning make possible?

We’re Not Giving Back

August 25, 2017 Chip Headley Comments 0 Comment

You’ve heard it, a famous athlete or movie star talks about some cause or charity they support and they say something like, “this is a great cause and I’m proud to be able to give back”. We’re not “giving back”. What? Before you go crazy let me explain. We are “giving”. It is important to us and part of who we are. We “give” in lots of ways from charitable contributions, personal service, kindness to others, and an awareness of our environment.

What we don’t do is “give back”. This implies that we took something that didn’t belong to us and returned a portion to some cause or charity. Words mean things. We didn’t take something that didn’t belong to us, but we do have a responsibility as citizens to make our community a better place. There are lots of ways we do this.

At Artistry Hotels, we do this through contributions to organizations that enable people to help themselves. We do this through a program called “Stay. Change A Life.” We also do it by being aware of our footprint and using sustainable products, supporting local artisans and farmers, and striving to provide a great place to work. Personally, I do it through contributions to organizations in my community and to my church. I mentor, serve in ministry, and strive to focus on others.

In the scriptures, Jesus said in Luke 12:48(b), “Everyone to whom much was given, of him much will be required, and from him to whom they entrusted much, they will demand the more.” Our charge is not to “give back”, but to give and to serve. The more we have, the more that is required. Here is the really cool part, being generous makes us happy. Scientist in Zurich just published a study that showed this. They said, “Our study provides behavioral and neural evidence that supports the link between generosity and happiness.” We are wired to be generous! “Giving back” focuses on us, giving focuses on others!

How can you show generosity today?

The Power of Human Interaction

August 18, 2017 Chip Headley Comments 0 Comment

For most of my career it was expected that I would show up at my workplace every day. Come in early, leave late. Put in the hours, do the work. It was what my bosses early in my career expected, and what I expected of my team when I launched my first business. It was how we did business. It was how everyone did business. Two massive disruptions changed this. First, business today is more about knowledge and less about process and repetitive tasks and second, technology made access to information available from anywhere.

If I need information today I can access it from a coffee shop, in my car, on an airplane, at the beach, or from home. It made working remotely possible. This coupled with a shift in corporate attitudes has led to a significant growth in working remotely. This shift was fueled greatly by companies’ ability to reduce office space and therefor cost by having a percentage of their employees work remotely.

At our company members of our team work away from our headquarters regularly. We couldn’t have done this effectively just a few years ago.

Just ten years ago, the first iPhone was introduced by Steve Jobs and Apple. This device launched a revolution in how we communicate and work. It changed everything. Well, not everything. Apple has begun moving its employees into their new $5 billion headquarters. For the first time in a decade, Apple is consolidating all of their Silicon Valley employees into one facility. Why?

“For all the beauty of technology and all things we’ve helped facilitate over the years, nothing yet replaces human interaction and I don’t think it will ever happen.”

Tim Cook
CEO
Apple, Inc.

Apple believes that human interaction is the key to innovation and their continued success.

At Artistry Hotels, we are building a culture that practices “The Art of Hospitality”. For us that is about delivering what our guest is looking for: to be inspired, to be taken care of, to feel welcome, to be themselves, to be enriched, and to support the greater good in a truly powerful way. Technology can help us do this, but true hospitality, “The Art of Hospitality” can’t be delivered by technology. It takes human interaction. It is a friendly smile, conversation, delivery of service. It is engagement. We don’t believe that there is any substitute for human engagement.

Technology, when used correctly, allows us to leverage our teams’ skill and resources to drive innovation, service, and customer satisfaction. It is a tool, it does not replace human interaction. We agree with Tim Cook, it never will. When you are building your company or division, don’t forget the power of human interaction.

6 Ways to Value Your Employees

August 11, 2017 Chip Headley Comments 0 Comment

Valuing your employees and setting them up for success can provide tremendous benefit to your work place. Here are six ways to value your employees:
1. Groups need a set of shared values. Values are the filter we use for making decisions. What is right and what is wrong. For example, in our organization we believe that our team members deserve to be treated with dignity and respect. This means no yelling, belittling, or intimidating. We also believe we get paid for doing, not for trying. These values are not contradictory. When a team member is underperforming they deserve to be addressed without yelling, belittling, or intimidating. It doesn’t mean they get a pass on underperforming. To the contrary, we owe it to our team to expect the best from each of us and to communicate openly and honestly about our performance.True values are manifested in how we act, not in a fancy sign in the lobby. The quickest way to destroy your culture is to allow your team members to act in a manner that differs from your stated values. When we act in concert with our values we demonstrate that people matter.
2. Hire for values first – skills second. If you have a position that requires people to be nice, start by hiring nice people. Too often we get bogged down in looking at skills and strengths and miss the most important thing. Use values and attitude as a screening tool, then and only then, move to skills and experience.

When we hire for values first we demonstrate that people matter.
3. Groups need diversity. Having shared values doesn’t mean everyone thinks alike. In order to grow as an organization you need diversity of thought and approach. Men and women can share values, but have very different approaches to problems. So too different races and cultural backgrounds. Without diversity your organization can rapidly develop “group think” and cease to see beyond the group. An organization that develops group think is headed for death.

When we build a team of diverse individuals we demonstrate that people matter.
4. Provide incentives that reinforce your values. If your incentive programs incentivize just individuals you discourage collaboration and shared values. Make sure you have incentives for the group and individuals. If you say that quality is number one, but you incentivize people based on how fast and how cheap they complete their project you are acting against your stated values. Your incentives should reinforce behaviors consistent with your values.

When we utilize incentive plans that reinforce behaviors consistent with our shared values we demonstrate that people matter.
5. Relationships are at the core of life. We are made to be in relationship with other people. Even introverts need human interaction. At the end of our time on earth what will matter is the investment we made in others. How did I help someone else? How did I make a difference? This is the core of developing a group of people who achieve great things.

When we build relationships we demonstrate that people matter.
6. Don’t tolerate people who act in contradiction to your values. One of the hardest things for any entrepreneur to do is terminate a high performer, but if that high performer is acting against your values they are a cancer that will destroy your culture and your organization.When we terminate those who act in disregard of our values regardless of their level of performance we demonstrate that people matter.

The power of a group of people who share values and a belief that they matter is incredibly powerful. When we create a group that is focused on people, we develop a unique and powerful culture that is able to do great things. Margaret Mead said it best,
Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.
Question: Is your organization focused on people? If so, what are some of the ways you are demonstrating your focus on people. If not, what are some of the things you can implement right away to create a focus on people?

Lessons from Ritz Carlton: When the Customer is Wrong

August 4, 2017 Chip Headley Comments 0 Comment

You’ve seen the sign – the one proclaiming that the customer is always right, even when they are wrong. How do I put this politely? MALARKEY

Sometimes our team members are right and when they are we need to stand up for them. My son worked for the Ritz Carlton hotel company for a number of years. They are legendary for focusing on their customer, or in Ritz Carlton language their “guest”. One day while working as a front desk supervisor he was in the office when he heard a guest berating one of the front desk agents. The guest was abusive and using inappropriate language and despite the front desk agent’s measured and polite tone the guest continued to escalate the confrontation. My son went to intervene and deal with the guest, but as he came out of the office the hotel’s general manager happened to come into the lobby. What happened next had a significant impact on my son, and his team at the hotel.

The general manager calmly introduced himself and began to apologize to the guest. Explaining to him that he was so sorry that they could not meet his expectations and that it would be his pleasure to help him find a new hotel that would meet his expectations. The guest began to back pedal, but the general manager was not moved from his position. He calmly, but firmly, escorted the guest out of the hotel.

After the guest had departed the general manager gathered the front desk staff and told them that they were ladies and gentlemen serving ladies and gentlemen. He would not allow them to be treated any less than that.

That encounter taught my son, and the front desk team at the Ritz Carlton some important lessons:
The boss had their back. The general manager communicated through his actions that his people were more important than a guest who was mistreating them. He not only stood up for them, but he stood in front of them, taking on himself their problem.

The boss reinforced the importance of the guest (customer). The general manager reinforced that the hotel team were ladies and gentlemen – whose mission it was to serve their guest. He didn’t give them a pass or a reason to mistreat or fail to serve a guest. Just the opposite, he highlighted the importance of the guest.

The boss preserved the dignity of the guest (customer). The boss dealt with the guest with compassion and took the blame for failing to meet his expectations. He did not treat the guest in the same manner that the guest treated the hotel team. He paid back rudeness with kindness.

The boss reinforced the values of his company. Part of Ritz Carlton’s culture is that they are “ladies and gentlemen serving ladies and gentlemen”. This is an important part of their customer service focus. It sets the standard for not only how the team interacts with the guest, but also how they interact with one another. By his actions and discussing this with his team he lived the values that the company espouses. This is how culture and values become alive in an organization.

The boss taught his team how to deal with confrontation. The general manager showed that you can be decisive, firm, and tough, without being a jerk. You don’t have to yell, curse, or become animated to effectively communicate when people fail to act responsibly or fall short of expectations.

The boss taught his team that on occasion you have to fire a customer. Sometimes customers are toxic to our business. They may demand a disproportional amount of our time. They may be rude or abusive. Their expectations may not be able to be met by us. Keeping them may be unprofitable to us. Sometimes the customer may be right, but wrong for us. When this is the case we need to act decisively as did the general manager at the Ritz Carlton.

Creating organizational cultures that win starts with a relentless focus on supporting your team. When teams know their leader has their back they are empowered to focus on the customer. As leaders it is our job to protect and support our people. Sometimes the customer is right, and our team members are wrong. When this happens we need to quickly acknowledge it, apologize to the customer, make it right with the customer, and address the issue with the responsible team member.

What do you think about standing up for your team when the customer is wrong?

Make Money or Do Good

July 28, 2017 Chip Headley Comments 0 Comment

For the last 50 years academics, investors, and economists have argued over shareholder and stakeholder theories. Shareholder theory says that companies sole duty is to maximize profits within the law. Stakeholder theory says that companies should balance the returns of all stakeholders even if it reduces profits. So, which is it, make money or do good?

When we think about this we usually default to examining large multi-national public companies, but they are just a piece of this debate. According to the Small Business Administration there are 18,600 large companies in the U.S., about 3,700 of these are publicly traded. They define a large company as having more than 500 employees. There are 28,800,000 small businesses! That is 99.9% of all businesses! Small businesses employ about half of the non-governmental workforce and over the last 20 years have created over 63% of net new jobs. Those of us who work in small businesses have a role in this debate.

Milton Friedman is one of the leading voices of shareholder theory. He said, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it…engages in open and free competition without deceit or fraud.” There is a common misconception about shareholder theory that it precludes charitable giving or any activity that reduces short term profits. The theory simply says that for an activity or charitable contribution to be made it must in the long term be beneficial to the company’s profits. For example, if a company made a charitable contribution to build a new hospital that would reduce the cost of employee healthcare, such that company profits would increase, this would be consistent with shareholder theory. Ultimately, all activities must increase profits.

Stakeholder theory on the other hand says that a company must consider all of its “community” and must act in a way that yes, makes a profit, but does so in a way that benefits its employees, vendors, customers, and neighbors.

Each of these are normative theories, that is, they say would a company should do, in contrast to descriptive theories that show what they actually do. (We intend in the coming months to share with you some stories of what our company is actually doing to promote our communities, along with what some others are doing. We invite you to share your stories with us.)

So, which is it, make money or do good? Companies can’t exist without making a profit, and making a profit is hard. About 50% of small businesses survive for five years and only 33% last ten years. If your business isn’t profitable you eventually run out of money and close. There is no conflict here between shareholder and stakeholder theories, you have to make money period. You can’t do good if you’re not in business.

The problem with shareholder theory is that it leads to a myopic focus on profitability that results in lower profitability. Shareholder theory operates in a vacuum. It assumes that what happens to a business’s stakeholders doesn’t affect the operations of the company. The welfare of stakeholders is critical to the success or failure of a business. Our team members have joy and sorrow in their lives. Times of health and illness. Customers have times of expansion and contraction. Innovation leads to changes in our environments. A rising tide lifts all boats, but a receding tide lowers all boats. Our companies are interconnected with our team members, customers, and communities. We cannot succeed, if they don’t succeed. This is why stakeholder theory matters.

“Doing good” is about making our communities better. Our communities include all of our stakeholders. When we do good, we help create a rising tide, and oh by the way, we are more profitable, not less so.

So, what do you think, is it making money or doing good?

Organizational Cultures That Succeed

July 21, 2017 Chip Headley Comments 0 Comment

It sounds simple. Of course people matter, but too often we find ourselves focusing on systems, processes, controls, and technical skills. In the midst of our daily challenges we often lose sight of the fact that organizations consist of people, not systems or processes. So what causes us to lose our focus on people? It has its roots in the theory of Scientific Management.

This theory is based on the premise that people are the problem and systems are the solution. Economists and psychologists told us for years that people always act in their own self-interest. By attacking a problem with detailed analysis such as time and motion studies and devising a rigid unyielding procedure for each and every task you would produce predictable and stable results. This would prohibit people from acting in their own interest instead of the organization’s. This may have worked in the manufacturing factories of yesterday, but not in the knowledge based economy of today.

Research has proven that people act in the best interest of the group, when they perceive that they are a member of the group. In fact, people will act against their own self-interest when it is for the benefit of the group. This is why people matter.

Your competition can reverse engineer your products, duplicate your processes, and leap over your technology. What they can’t do is replicate your unique culture. Culture is your only sustainable competitive advantage. People create, sustain, and destroy culture. This is why you must have a relentless focus on your people.