Nelson Chan loves to play
mystery shopper.
Despite his wife’s protests,
the president and CEO of
Magellan Navigation Inc. frequently poses as a would-be
consumer to observe the
behavior of customers at retail
chains throughout Northern
California. It’s not that the GPS-unit manufacturer doesn’t designate enough resources for
market research; it’s just that
Chan is obsessed with understanding his customers, which
he says is the key to success in
business.
In a similar vein, the executive
also analyzes the behavior of his
management staff members by
revisiting their personal objectives at employee-led quarterly
reviews. The exercise sets a tone
of accountability that has helped
the company and its 475 employees worldwide push Magellan’s
total market share from 1.9 percent in the second quarter of
2006 to 5.7 percent in the second quarter of 2007.
Smart Business spoke with
Chan about how to foster such
accountability by pushing back
on decisions and practicing
transparency.
Don’t be afraid to push back. I
really like decisions to be made
at a different level than always
having to be at the CEO level.
Decisions made at the lower
level are better made.
When decisions are pushed up
to me, and I don’t think it’s the
right place, I push back.
It’s listening to them and basically saying, ‘Guys, this decision
should not be coming to the
CEO’s office. This decision
should be made by you,’ whether
I’m talking to my staff or multiple
levels below in the organization.
You’re just encouraging their
behavior if you don’t push back.
The fact that people come to
you and expect you to make
decisions all the time, and you
do it — well, guess what? That
reinforces that.
There are a lot more decisions
that really should be made at
other levels in the organization.
It’s even healthier for the organization — not only is it a scalability issue but also a knowledge-level issue.
There are many people, if you
hire smart people, that can
make much more intelligent
decisions than if they filter all
the way up to the CEO. It’s not
healthy if employees don’t feel
empowered and don’t feel like
they’re held accountable.
Hold employees accountable. When
people succeed, you reward
them. You reward them lavishly,
and you reward them publicly.
When people don’t perform,
you do the opposite. If they don’t
perform consistently, you have
to make changes. Those are also
made very public.
If you say you hold people accountable, you have to show you
hold people accountable, which
means you have to fire people,
and you have to reward people.
I have a quarterly meeting with my staff where they stand
up and they basically review
their objectives. They tell me,
‘Here’s what I’m committed to
do this quarter.’
Likewise, they spend time
reviewing the objectives from
the previous quarter that they
committed to the organization.
They get a chance to grade
themselves and say, ‘Based on
this objective, I said I would do
such and such. This is how I
would grade myself whether I
did or didn’t do it and why.’
The whole idea there is having very specific, measurable,
achievable objectives that are
black or white, whether you did
them or not. There are no
shades of gray. You’re standing
up there and holding yourself
accountable to your peers and
the company on whether you achieved them or not.
They are doing that not just for
me as their direct management
but also to their peers, which I
think is even more important.
When you commit, it’s not just
committing to your boss but to
your organization and your peers.
This is a team sport. That peer
pressure is very important. Sometimes, it’s even more important
than any other pressure you can
get.
Practice transparency. When I talk
about transparency, it’s really no
hidden agendas. We don’t come
into a room and try to have a strategic decision and people are having different agendas. We’re all
trying to achieve the same goal.
A lot of it has to be basically aligning your goals and objectives. You want to make sure
that the management team as
well as the employee base all
understand what your goals and
objectives are and also what
your values are.
[It’s also] communicating to
employees the status of the company. Be open and forward with
them with both the good and
the bad. Not everything’s rosy.
It makes life a lot easier. It
makes a lot less politics. Everybody knows where they stand.
It makes getting to the point
much quicker and much easier.
Keep moving. A lot of people get
into an analysis-paralysis issue,
where they feel like they need
to have all of the information
before they make a decision.
In life, unfortunately, you don’t have all of the information, and
you’ve got to know when you’ve
got to make a decision. At the
end of the day, if you don’t
make a decision, a decision’s
actually made for you, whether
you like it or not.
I like to sail. If you’re moving
[in a sailboat], it’s much easier to
change course and change direction than when you’re sitting still.
The same goes for business.
Even though you may be making
the wrong decisions, you get a lot
of feedback, and you get a lot of
data that says, ‘Hey, this is wrong.
You need to change course.’
If you’re moving in the wrong
direction, it’s much easier to turn
because you’ve got momentum
that allows you to change
course.
HOW TO REACH: Magellan Navigation Inc., (408) 615-5100 or www.magellangps.com