resonant leadership, cover, book, boyatzis, mckee, Toby Elwin, blog

Resonant Leadership by the book

Previously, Boyatzis and McKee collaborated on the book Primal Leadership:  Learning to Lead with Emotional Intelligence.  In this book they team again to provide solutions and incentives to fuel, as well as arm, people around values and importance of leadership introspection and coaching. It is too simplistic to say this book presents the cost of leadership lack of awareness, known as dissonance, has on previously successful high potentials.  More provides a return path to life as envisioned before dissonance.  Through case studies, as well as cited and studied research, the importance resonant leaders have on a team and an organization’s success. The book presents a case for awakening resonant principles for renewal of self and renewal of relationships; and everything in business is a relationship. The book also serves as a guide, a strategy, and a plan that scales from individual to enterprise need or for …

jimi hendrix, ability, risk, technical, Toby Elwin, blog

Technical ability does little to mitigate risk

Organizations don’t simply run from a strategic plan prescription.  Projected cash flows don’t deliver themselves.  Business units don’t run in a vacuum.  All these efforts take the collaborative knowledge, ability, and skills of people and teams. If you recruit people with evaluation efforts that focus on industry experience, work history, and academic education, evidence shows these human resource tools do not show positive correlation to predict someone’s success within a firm or that a collection of technical wizards would impact a firm’s future success. Technical skill has little to do mitigating operational risk within your organization. Evaluations that include work product, reports, stories, and conversations are qualitative views with only limited insight into someone’s technical ability. Further, these qualitative types of human capital assessments remain highly subjective and are neither quantifiable nor comparative. Only quantitative approaches provide comparative analysis. Important predictive human capital …

competing values framework, Toby Elwin, blog

Hiring the right person is more cultural than technical

As mentioned in the post Hiring is more emotional than rational technical skill rarely assures success in an organization.  There are just too many elements that impact someone’s success that are more important than technical fit. Many times when you plant an individual into a team, business unit, or client site there is potential damage that no amount of technical skill can hide:  personality clashes, culture clashes, communication gaffes, and other social or relationship awareness miscues are a few with the potential for huge impact. Hiring is more of a cultural match than a technical match, at certain levels you can expect people are smart enough to build or expand their technical skills, but can you expect them to build their personality skills. These problems can be immediate or on a slow boil, but make no mistake these problems affect morale and motivation …

emotional intelligence, matrix, Toby Elwin, blog

Hiring the right person is more emotional than rational

You have to assume every person you interview has the technical skill to do the job. Once past the traditional human resources gate-keeper by the time you meet a candidate they have the skills. When assessing a potential hire, technical skill should not bias your decision, but compliment decisions on how the hire wire integrate to your need, how they will fit in within a team, and how they meet your organization’s culture requirements. Technical Skill Still If technical skill was the key indicator of future success wouldn’t your hires all work out?  Hiring is more emotional than rational. When you interview what do you rely on to understand if the candidate can successfully integrate into your culture?  If technical skill or industry experience are all it takes to succeed than highly-selective firms, such as Booz Allen Hamilton, (now Strategy&) and Deloitte Consulting would …

goodwill, human capital, risk, Toby Elwin, blog

Discounted risk is human capital risk

Many private equity and venture capital firms claim to rely on the quality of entrepreneur to determine funding.  But rarely is this human “quality” represented in measurable, comparable assessments at least as measurable as weighted average cost of capital, discounted cash flow, capital asset pricing model, risk-adjusted rate of return, and other abstract financial models. Human capital is the only asset that is not tangibly owned, however human capital risk is very tangible: Compliance – Financial or reputation damage to the organization due to failures to meet legal or regulatory requirements; Productivity – Loss of productivity or output due to under-skilled or under-motivated employees; or an organizational culture that does not encourage discretionary effort (the extra contribution over and above required to keep the boss off your back) from employees; and Growth – Failing to maximize organizational capability or to identify and achieve …

human capital, risk, evaluation, criteria

Human capital risk, now that’s real risk

You commonly hear an equity firm or VC partner claim, we invest in the people and when it comes to costs, human capital usually represents nearly 70% of all operating costs. Human capital risk is the real risk, but most investment firms don’t focus investment decisions and deal valuation not quantifying the people or human risk.  The overwhelming focus for investors is on quantifying risk by analyzing: Market growth or potential, Market size, Expected rate of return, and Expected financial risk Their decision to invest becomes a decision to assume the correct amount of risk for the projected payoff. However, the overwhelming valuations of risk are deeply flawed. The gamble, or risk is not on market or legal risk, but really a the risk of a team to deliver something within a certain time and within a certain budget. In other …

nfl, recruiting, strategy, round, irrelevant, Toby Elwin, blog

The NFL draft and your company recruiting strategy (round 2)

The NFL draft reveals all things wrong with talent acquisition and recruiting. Looking at how an NFL team drafts provides terrific insight into what you and your company can improve upon. I wrote in the last blog, The NFL draft and your company recruiting strategy round 1, a sample list of the assessments an NFL team uses to evaluate fit: 40 yard dash, Bench press, Vertical jump, Broad jump, 20-yard shuttle, Three-cone drill, 60-yard shuttle, Position-specific drills, Physical measurements, Injury evaluation, Drug screen*, The Cybex test, The Wonderlic Test, game film* [work samples], scouts and coaches who attend games, interviews*, and recommendations* That list, like your interview and recruiting strategy, is intended to project future performance, but like all the great financial advisors tell us, “past performance is not an indication of future results”. The asterisk next to some of their tests …

nfl, ryan leaf, recruiting, strategy, Toby Elwin, blog

The NFL draft and your company recruiting strategy

There is little doubt each National Football League (NFL) team spends an extraordinary amount of resources preparing to draft their number 1 pick. An NFL team’s number one pick is intended as the team’s future star and this year the NFL draft has changed their format to glorify the first round draft even more. Sure the NFL draft rounds 2 through round 7 does allow teams to fill their talent needs or find complimentary players, but with upwards of a $30 million guaranteed payout, an NFL team looks at their first draft pick as an impact player and as a team franchise star. However, the NFL has shown the sad state of talent evaluation because something more than technical skill is clearly required to succeed in the NFL. If technical skill was the most important evaluator of future success, then …

why people change jobs, Toby Elwin, blog

The cost of human capital is emotional intelligence

Emotional Intelligence (EI) is a capacity to recognize how our own emotions motivate ourselves and the awareness of our emotions on others. Some may find that a little too warm and fuzzy. Now, if 30% increase in bottom line performance, the cost of human capital is emotional intelligence. Emotional Intelligence is vital to maximize any return on human capital. Why does this matter? The happier your people are, and you can’t claim happiness without clarity and consistency from your leaders, teams, and organization culture your human capital creates real cost: highly engaged employees can improve business performance by up to 30% and that fully engaged employees are 2.5 times more likely to exceed performance expectations than their ‘disengaged’ colleagues  The Hay Group and Richard Boyatzis An increase in bottom line performance measures by 30%. I say, again, by 30%, that is nothing to sneeze …

VC’s missing formula, discounted cash flow, human capital, alchemy,

The VC’s missing formula: human capital discounted cash flow

Accounting assigns of assets and liabilities and financial management’s current or pro forma valuation both rely on art and interpretation more than any professional standard, science, or law. What valuation models measure human capital ability to meet financial and strategic business goals? What formulas are used to measure human capital contribution to profits? What are the human capital risk factors you justify when you build your financial statements and projections? Organization valuation usually involves four areas: Physical capital, Financial capital, Intellectual capital, and Human capital Both accounting and financial management start with familiar industry formulas to measure physical, financial, and intellectual capital. The departure from formula comes with asset classification and subjectivity of inputs. You most often witness this in the beta, or the numerical representation of risk, used in the discounted cash flow formulas on glitzy, initial public offering, road shows. …

bugs bunny, tortoise, hare, Toby Elwin, blog

Emotion versus intelligence — the tortoise and the hare

In my Culture war post, I advocate Emotional Intelligence as a more important quality job interview criteria than a corporate or team culture fit. What Emotional Intelligence means (EI) and does not mean as well as how to discern sides in EI* vs. IQ debate means more than emotion versus intelligence. Where IQ intends to measure the ability to reason deductively or inductively. Much has come to light to say it is wrong to expect the higher someone’s measure of logical reasoning, math skills, spatial skills, understanding analogies, and verbal skills [IQ]. IQ is intended to measure intelligence as if IQ is a proxy for expected success. The alternative key to success measurement found not on in how one thinks, but in behavior and interaction with others using communication skills:  EI. EI intends to measure how you motivate yourself and others and, critically, far …

culture, war, Toby Elwin, blog

Culture war

Does your company have a hiring philosophy to find people who fit into the company culture? Do you interview people to fit into the culture of your division? Do you interview people to fit into the culture of your team? Why do we look for people who will fit in when what your business needs are people who stand out.  What good is it to hire for culture fit when we work and live in a dynamic world where change is constant?  You may not want change in your personal life, but you better be building for change in your professional life. Don’t believe in change?  Look at the Fortune 500 from 1998, how many companies are no longer on the Fortune 500 2008 list? Do the same with the S&P 500? The Russell 2000? The English Premier League? Nice …