Business is simple; it’s the people who make it hard, says Larry Ferguson, CEO of First Consulting Group Inc., a $264 million
health care consultancy firm. Simply put, business is dealing with people to solve problems, something that Ferguson says has
been both blessed and cursed by a growing reliance on e-mail and other less personal forms of communication. Ferguson says
that while e-mail can be an effective tool to quickly deal with tactical issues, collaboration around strategy and vision is best done
face to face. After all, he says, a breakdown in communication can equal a breakdown in your business. Smart Business spoke
with Ferguson about building consensus, encouraging input and why the proper reward system is critical to achieving goals.
Build consensus to make well-informed decisions. I believe in the power of the network.
CEOs, in general, are generalists. They take
in lots of different data points about markets, technologies and the capabilities of
their own organization, and then assimilate
that and distill it in a general direction.
They then work with their management
team and other associates to work on that
plan and challenge the thought process. It’s
leveraging the talent in the organization.
For example, in a senior management
team, you normally have a financial person
or two, a marketing person or two, a couple operating people, HR, legal, and they
bring a different approach that one person
doesn’t have. I don’t care what a CEO’s
makeup is, they usually come out of a specific domain, whether it be marketing,
finance or whatever, and it’s good to make
sure that all the bases are covered. Just
because there’s a theory there, doesn’t
mean it’s going to work; you have to back it
up with the intellect of people who know
their different domains.
Whether you have a management team or
a board, customers or any organization,
you have to bring people along and, as I’ll
call it, rationalize the database of their
knowledge. You can come out of a room
and have some strategic vision that people
just can’t get their arms around or understand how you got there.
Unless it’s a purely autocratic organization, people would like to know the steps
you took to build the thesis of where you
want the business to go, and that takes
time.
Groom future leaders. Some people don’t like
consensus, even the participants, because
they prefer to have someone just tell them
what to do. That way, they don’t have the
ownership. I’ve always found, especially
with senior people, is that it’s better to have
the ownership there.
It’s a training exercise. To me, any leader
needs to groom the next generation. You
need to have people going through these
thought processes. Firstly, the leader needs
the information because hopefully they’ve
surrounded themselves with smart people, but you’re also developing those folks for
the next level.
Those folks need to understand that it’s
not just the input you’re looking for; it’s a
training mechanism to allow them to
advance in their careers. I have not had
much difficulty getting people to give input
once they understand what we’re trying to
do.
A lot of people like to be creative and like
to have a say in where they’re going. It may
not be the final say, but in general, if they
understand what the goal is and they
understand that this is a way they can grow
their careers, if they’re the right people,
they’ll step up.
Make goals meaningful to employees. You have
to build award mechanisms around what
your goals are. People will do what you pay
them to do, in a lot of cases, so you can’t
have a direction without the proper
rewards system, whether it be promotions,
compensation or acknowledgement. There
are lots of different reward mechanisms,
but they have to be in place to encourage people to want to do what the goal is.
You also have to take the big goals and
strategy and break it down into somewhat
digestible pieces, so people can have input,
and they can see their input and their contribution to the smaller segments. How do
they fit in to the bigger picture? It’s taking
the big picture and breaking it down into
smaller pictures and letting people understand what their contribution is and what
their payoff is for that contribution.
Lure talent with a strong vision. The most difficult challenge a business leader faces is
recruiting, inspiring and keeping top talent.
Business is matching capital and human
talent. There is a lot of capital out there, so
capital is not an issue these days for the
most part. There is a lot of opportunity
because every year, the world reinvents
itself. So it comes down to the people. It’s
attracting the right people to put together
with the capital and the opportunity. That’s
key.
I have this exercise I do. I ask people for
the best company they’ve ever worked for
or been associated with. You hear companies like Apple come up, Microsoft, Intel,
Xerox in their earlier days, but what all
those companies have in common is that
they’re companies with a broad vision. It’s
not just a job and going to work.
If you’ve ever met Microsoft people, they
have a vision and a mission, and they really do buy in to what they’re trying to do,
and they get on a roll. People don’t just
want a job and a paycheck; they want to be
part of something bigger that they can have
pride in.
If you can say, ‘Wow, these are really cool
people, yes, it’s a good job, but look what
we’re doing. We’re reshaping banking,’ or,
‘We’re reshaping health care IT, and this
can be a very significant thing, and I can be
a part of it,’ that is what draws good talent.
People want to be part of something bigger than themselves, and if they see talent
coalescing around a really cool vision,
you’ll attract the right people.
HOW TO REACH: First Consulting Group Inc., (562) 624-5200
or www.fcg.com