An Honest Conversation with Todd Holzman

An Honest Conversation with Todd Holzman

Todd Holzman is the CEO & Founder of Holzman & Company, preferred supplier of leadership and sales training to Global 1000, FTSE 100 and Fortune 100 Companies. He talks to Deborah Valentine about the importance in performance management of honest dialogues between managers and their reports, and how this can be applied to developing a wider influence into other departments within your organisation.

You hold a couple of masters’ degrees, one in leadership development from Harvard and another in social organisational psychology from Columbia, what made you decide you wanted further education in these areas and set you on this career path?

Before these degrees I attended university at Cornell and did my bachelor’s in industrial labour relations. One of the first courses I did was in organisational behaviour which, ironically, I found incredibly boring. So I shifted my focus to something that seemed more practical at the time — business management and entrepreneurship. During one of the introductory courses, our professor showed a video of Tom Peters, who wrote In Search of Excellence with Robert Waterman, describing the resurgence of America industry — in particular, the automotive industry after being beat-up by the Japanese. What I found exciting was the notion of creating a culture where people really cared about performing and doing their best, and finding the organisational behaviour theories I had initially found so boring could be useful. Then coming out of university, I helped start up a small business in New York. I managed a staff of around six people and we had a 300-person customer base. I saw first-hand the huge impact the correct application of these theories had on me, our people, our customers and ultimately the business’s finances. I also felt we were creating something special — a culture where people took risks and constantly strove to be better than the day before. I realised it wasn’t only business I loved, but also leading, creating a fantastic culture and constantly looking for ways to improve things. I also became frustrated with my own inability to get the business’s owners to keep pushing after our initial success, despite applying everything I had learned and read on leadership, human motivation, negotiation and influence. So, instead of going back to school for my MBA, I went to Columbia University to go deeper into the world of organisational psychology — and this is where I met Dr Victoria Marsick, who introduced me to the work of Dr Chris Argyris from Harvard Business School. Argyris’s research and perspective remains at the foundation of everything we do in the areas of leadership, management and sales training space to this day. She helped me see the limitations in myself as well as the commonly accepted theories I had learned. It was at this point I decided to dedicate myself to this particular aspect of the field.

So it was the experience of running your own business and having to manage people’s performances that actually inspired you to move forward with what you’re doing now?

Yes, and appreciating how much it mattered. On a personal note, I remember when I was growing up my Dad would ask, “What do you want to be when you grow up?” It was the perennial question. My uncle’s partner was a leading psychiatrist in New York and I ended up spending time with him. On the back of that when I was 13, I did a paper on Freud’s psychoanalysis of dreams and was just enchanted by this notion of psychology and psychiatry. I found it fascinating. So when Dad asked me what I wanted to be when I grew up, I said a psychiatrist. And he said, “Why do you want to do that? You’ll have enough problems of your own.” [Laughs]. So I kind of put that on the back burner. But I also remember my Dad saying “people don’t change”. I felt that was really pessimistic and defeatist. He was a corporate executive and sometimes told me about the organisational politics related to his job. I didn’t like them. So that was with me the whole time — psychology, not liking organisational politics, getting really interested in leadership culture and business.

Well, talking about politics I know you advise a rather non-political approach when you say managers should give people the straight story about the gaps in their performance and behaviour — and their overall capabilities. The whole thrust of your group seems to centre round having honest dialogue, which sounds simple — I know we all think we have honest dialogue with our staff — but it’s a lot more difficult than we realise.

A lot of the things Argyris was trying to address were the approaches leaders and managers use to get better performance from their people, to bring about changes in their behaviour and address any issues that needed to be resolved between leaders. His research — which has been replicated around the globe — his big discovery was that our natural ways of handling these issues and the all-important conversations with our people and those around us, often create problems. The usual training given, for the most part, just strengthens, reinforces and deepens these ineffective practices. That’s why the title of one of his seminal articles in the Harvard Business Review is ‘Communication that blocks learning’. Though always well-respected, for awhile he was a bit of a black sheep in the field. It wasn’t until the mid- to late-90s, he got the credit he deserved. Peter Senge, who wrote a book called The Fifth Discipline, began popularising his work, and I have taken up where he’s left off. When I say the ways that managers approach, for example, getting better performance from their reports are ineffective or create problems, that’s judged on the fact they don’t result in sustainable improvements in either performance or behaviour. They also tend to feed performance-debilitating politics and relationships that actually undermine the company’s ability to get the performance out of people they need.

On a practical level being honest with people is quite difficult. How do you suggest managers/leaders approach learning to be honest? On a simple level?

Let’s talk about what makes for an honest conversation that’s actually effective. We have to have some criteria for that, right? Because there’s a notion you can actually put 
‘the real issue on the table’ — but that isn’t enough. We’re not just interested in having honest dialogues — it has to cause people to change or take action in a way that improves the business, otherwise why bother? If all the dialogue doesn’t translate into something better for the business, what’s the point? We know that for adults to really learn and change, they have to agree there’s actually a problem or an opportunity which can only be addressed, solved or seized if they change their behaviour. You don’t get action unless you first get agreement. And you can’t get that agreement unless as a manager you tell your people in a very clear and direct way what you think it is about their behaviour that needs to change; what you think it is about the way they’re doing their job that is creating a problem or is sub-optimal.

But that falls into leadership having to determine and reinforce the values of the corporation and the corporation has to establish its own values before someone is effective in leading and getting performance out of people.

I think what you’re actually saying is they have to value honesty.

Yes, and they have to set a standard for themselves before anyone will accept their leadership capability.

Generally the problem isn’t with the corporation’s espoused values, they all espouse putting the real issues on the table, having open dialogues and making sure decisions are based upon high quality information. They all believe that monitoring the way we go about solving problems and seeing whether it actually gets a result is important. They all espouse putting those things above power, politics and personalities. The problem is that managers, for the most part, have the right intentions and the right principles but when it comes to having a real conversation with a real person in a real situation — and they feel the conversation is going to trigger some threat or embarrassment for themselves or the other person — their desire to win, look good, control the situation, and keep things comfortable and on an even keel kicks in. All this ends up driving people to behave in ways which, unfortunately, ensure we’re not being as honest as we should, or if we are being honest we’re doing it in a way that isn’t going to create agreement in the other person. Or, it’s not approached in an open-minded way so we realise the person we’re talking to actually isn’t the problem. The problem lies somewhere else — sometimes with ourselves. 

That’s true.

This was Argyris’s research. We have one espoused value — be honest, be open — but across the globe people are programmed with a theory called ‘Model 1’. The problem isn’t analytical; managers on the whole are very smart. When they look at their people and want better performance from them, they usually see what the problems and opportunities are, and have good ideas about what their people need to do differently in order to improve their performance and the business. They’re quite smart, they’re quite insightful. The problem is they think it, they tend not to say it. The other person doesn’t hear it and — surprise, surprise — they don’t change. [Laughter.] The managers, not realising this, blame the person who is not changing instead of themselves. So they think it, they don’t say it, the other person doesn’t change and they blame them. Or, they think it, they say it but don’t handle the conversation well. The person doesn’t change and, again, the manager ends up blaming them. In the manager’s mind, all the principles they’ve learned have been applied, they’re doing the very best they can. But if you’re doing the best you can and the other person isn’t changing it’s natural to think ‘the problem isn’t me, the problem is them’. Yet when we look at how the manager has handled it, their approach almost guarantees the other person is not going to change and improve. For example, sometimes when the manager tries to bring up an issue, they avoid it entirely or soften the message so much, their people don’t realise the size of the problem.

You’ve just described British culture.

What’s interesting about that comment, is no matter where I go, whatever country I’m in, they say the same thing — you’ve just described American culture, you’ve just described our culture. I remember a recent example working in Germany, a manager had a conversation with one of his direct reports who was negotiating a large deal. In his mind, he was thinking ‘the way you’re working with the client right now could end up hurting us to the tune of ¤30m’. He sees the problem. When he goes to raise it, he says “I think we might have a bit of a problem...” Now, €30m is not a ‘bit’ of a problem — it’s a big problem.

True.

So he softens it and, of course, his direct report doesn’t take him seriously and nothing changes. Or the issue might be raised by asking a leading question like ‘Do you think the way you’re working with that client is really the way we need to go?’ So, Deborah, for example, if you were a salesperson and you thought you were doing a good job and I was your manager and said, “Deb, do you think the way you’re interacting with the client is really going to help us close the deal?” What’s your initial reaction to the question?

I would probably say that I do.

Exactly. So yes, you do. So what might be going on in your mind when I say that as your manager?

That he probably didn’t think I was.

My guess is — tell me if this is incorrect — you probably would prefer for me to say, ‘Listen I’ve got some concerns about the way I think you’re handling the interaction with that client. I think it’s actually going to hurt us in terms of closing the deal. I’d like to talk to you about that’. My guess is you’d prefer for me to say it that way than, ‘Do you really think that’s the best way to handle the client’. Is this true?

Possibly. I don’t know. It’s certainly less wimpy but to be honest most of the time — and shall I be really blunt?

[Laughing] I knew that would be part of the deal...

I would prefer a senior manager to just butt out because often — not always but often enough to count — they can be more of a hindrance than a help.

Well, I think that’s fair. But if they’re going to raise it with you, which way would you prefer? Would you prefer for them to honestly tell you what they think?

I would prefer to hear how he thinks directly on the whole, but it depends on the feeling about the manager themselves as well. Some people could do that and you would say, fine, because you respect their common sense. But if you find you have someone you don’t respect on a personal level, or you feel doesn’t understand the wider issues, who are too many steps removed from what you are actually doing, then you don’t care how they approach it so long as they quickly leave you alone to get on with things.

That’s a great comment. So this is the challenge of managers — to even get the people they supposedly have authority over to take them seriously.

You can’t manage performance unless that person does.

And a lot of that is determined by how the conversation is handled because there’s a credibility issue to deal with there. If you soften the message too much, or you put it in the form of a question, it’s guaranteed the person won’t take you seriously. Because you’re not saying anything to cause them to do so. But if, as a manager, you can actually tell them — ‘Listen, here’s what I see you doing, here’s my evidence, here’s why I think it’s going to hurt your ability to close the deal’ — you have to be able to make a compelling case for your view, otherwise they shouldn’t take you seriously. This is what we find, that a lot of the performance management, performance leadership and communications training has taught managers to raise the issues in too ‘softly, softly’ a manner.

This ties directly into something I was thinking since, working on some of our HR titles, I see the trend in leadership seems to be less the old fashioned authoritarian model. I’m not saying you’re advocating that particular model, but it does seem the line you’re taking is strong and also more ‘manager as social psychologist’ which, given your background, isn’t surprising. How do you advise someone who needs to develop that quality?

Here’s the thing, when people listen to our work who come from the more authoritarian command-and-control mindset, they say we’re teaching managers to be too open and listen too much. This is a minority, but real strong command-and-control types will say ‘I don’t really want to be open and listen to my people, I just need them to do what I want’. The other camp — the more democratic, softly, softly camp — are surprised we’re telling managers to be more honest, not to actively avoid conflict and not just to be nice. Depending on which purist camp you come from, we’re teaching people what we would consider a third way. And it’s not just from our social psychologist background, because in the tradition we were trained — not from Argyris, but the schools we attended — it would be much more the softly, softly ‘never say something that might upset someone’ approach. What we actually studied — in the real world, not in academia — was this: What do effective managers say and do to get better performance from people? After studying 12,000 cases where people brought us their real performance challenges with people and when we looked at the managers who were successful — we saw their behaviour, how they handled these conversations — there was a very consistent pattern. 

In a nutshell we’re saying, you’ve got to be really honest. Now this is not about saying everything you think and feel in your mind — we’re not trying to turn people into socio-pathic Jack Nicholson As Good As It Gets characters. We’re not trying to them bring into the world of John Wayne ‘you better clean up your act, Pilgrim, or else...’ honesty. It’s more about engaging them in a dialogue where you’re very honest but you’re also very open to having your own point of view disagreed with. This notion of thinking we are always right is a big problem. The hallmark of effective honesty is that you can be honest in a way that elicits the same honesty in return. Because we’re not teaching people to put the real issue on the table and just blame their people. We want them to put the issues on the table and be able to hold their people accountable for the performance if that is the real problem. That’s why you must take a very open-minded approach. What we see is when managers are very open-minded, but also very honest, and can actually engage reports in honest dialogue, their people internalise the need to change — and actually do.

So this touches on not just a rational but an emotional element of leadership as well.

Absolutely. If you’re going to get someone’s attention, you better tell them what you think, you better tell them why you think what you think and you better be able to back it up. You also better frame it in a way that shows what the stakes are for them. You might care about one series of things, I might care about another. Let’s say we both report to the same manager. Let’s say we’re both doing something that is undermining performance. Let’s say we’re doing the same things. But the way our manager might talk to you versus talk to me, how he or she would frame it might vary a bit depending on what you and I care about that’s different, what we’re both trying to achieve, what our aspirations are, the things we worry about — all the things that have an emotional impact on us. So when a manager has that conversation they need to take that into account. People don’t take on board the need to change through reason alone. Reason is paramount, it’s absolutely critical and largely this field makes too little of it. The quality of the rationale and of the manager’s thinking is absolutely essential, but attention also has to be paid to the emotional aspects that cause people to change. One of those things is certainly being able to frame things in a way that speaks into the person’s ‘listening’ and articulates the right stakes. But getting the emotional element of these conversations is only partly about technique. Right technique coming from the wrong place — with the intention to manipulate, for example — often backfires. As a manager you have to be open to changing your own mind as much as the other person’s. What we see is, when managers have that mentality and demonstrate it in their conversations without backing down, if the evidence still supports their view, people are willing to change themselves.

What about internal management processes? What are your thoughts about them? Are they helpful or not?

In this discipline of getting better performance out of people we can often get lost by focusing too much on performance measurement processes. How should I rate my person on a scale from one to five? How often do I conduct one-to-ones? Am I rewarding people appropriately? What is the process around grievance and discipline when someone needs to be exited from the company? All those things are very important, particularly when you’re working in bigger organisations in the industrialised world with their complex legal structures. You have to work in accordance to these things. But what often happens in companies is they lose sight of a very simple point that performance management is about managers getting the kind of performance out of their people required for the business to be successful. It’s about business performance. At the end of the day, if you’re not having an honest and effective conversation with them, all the measuring of performance, all the ratings, all the evaluating, all the processes you take people through — don’t matter. If we had a small business, we wouldn’t have all these processes in place, we’d just be talking to each other. It’s the talking, and how we handle it, that makes the difference. This is what determines whether someone grows and develops to the level we need.

Everything you’ve just outlined and defined, is not restricted to report-ins. It can be applied to a wider influence as well, couldn’t it? In dealing with other departments or outside clients?

Absolutely. These conversations are critical and not just in the realm of managing one’s own people. It’s hard enough when you do have authority over them. That difficulty magnifies when you’re trying to lead people who aren’t within your direct line. You need to be even better at getting their attention for them to make changes. That’s the challenge of leading across the matrix. Fortunately, we see people can get a lot better at it. People make a series of very predictable errors. For example, when I’m trying to get you to do something and you don’t report into me, I’ll tell you why I think it’s important from the perspective of the things I care about, but I don’t frame it in a way that’s relevant to you. That’s the issue. Partly it’s because I’m not even thinking about you. I’m not thinking about what your objectives are, how you’re measured and why you should care about the issue I’m raising. I’m just thinking about why it’s important to my department and the pressure I’m feeling. What people need to get better at when they’re trying to influence people outside their authority is to understand why the other person should care, given the things they already have on their plate.

It’s making the links between the two objectives then.

That’s exactly right. Take this scenario. If you say to someone ‘we need this because reducing costs for the company by 50 percent is one of our top five strategic objectives’, the person feels he has to agree with you because they can’t disagree with the principle that costs have to be reduced by 50 percent. So they’ll say ‘yes’ but their manager is holding them accountable for doing a whole set of other things. What you’re asking them to do often requires them to disappoint their boss. In the name of wanting to be congenial, they’ll tell you ‘yes’, drag their feet and essentially do ‘no’. Because you haven’t been able to first talk about why they should care given the things they already care about. Also, there is often no appreciation that what is being asked of them is actually putting them into a bind. Then, since you’re not getting any result you use the authority structure to get them to do what you want them to do. So now you have a conflict with them, they have a conflict with you and — voilá — there are two problems. One, the original problem; and two, now there’s a relationship problem which deepens the politics that were part of the problem in the first place. 

I think that is a huge issue for managers in all departments — being able to find the link with another department that makes everything worthwhile for both sides.

Yes, but people can get a lot better at it. There’s a proven set of practices they can learn. This is a particularly relevant issue with functions others don’t have to listen to and take seriously except where there’s a clear legal or other serious violation — and then it’s too late. What we find is there are things people can do to influence other departments and the higher authority structure, but they first have to make departments worried about what they’re doing right now — and that’s the most important step to get right. Because if I can’t convince you that the way you’re operating is going to cause problems for you, you’re not really interested in the things I want you to do. You have to see what I’m asking you to do as a solution to problems you care about. If I first can’t get you to see there are problems you’re creating for yourself, then I can’t ‘sell’ you the solutions that come out of my particular functional discipline.

I was just thinking back to how you go about teaching people to confront these situations and deploy these skills. Personally I’ve been involved in one of your leadership role-play workshops —

And we’re still speaking —

— Yes, just barely. [Laughter]. It was very challenging, you don’t feel particularly natural in it but at the same time it’s quite useful to put yourself in that awkward situation. You play the role of a manager whose talk with their deputy he thinks is effective and went well, but obviously has not. We were meant to analyse his approach and talk to him how it could be made better, but we wound up picking him apart with a great deal of... relish. 

That was Model 1 behaviour. You guys didn’t intend to behave in the same way you criticised the manager in that case scenario for behaving, but despite your very sincere intentions to behave otherwise, and despite being very intelligent, you all still fell into the same traps you critiqued him for. This was Argyris’s point. This Model 1 theory is ingrained in us and drives us to behave in the very ways we find ineffective in others. And we’re largely unaware of the extent we do this. We see it very clearly in other people but struggle to see it in ourselves. Leading people is actually an educational process where you’re trying to change people’s minds whether they’re directly reporting to you or not. So in order for people to change the way they’re going about things, they first have to agree there’s a problem about how they’re currently doing them. The same thing is true in the educational environment when we’re trying to develop leaders’ ability. The first thing we do is help the people we’re training see the extent their behaviour isn’t getting the results they want — essentially see the way they are behaving is creating all sorts of problems. But what we know about behaviour change — and this as applicable to myself and my colleagues as leadership educators as it is to the managers we’re training — is just because someone realises what they’re doing is a problem, doesn’t mean they’re going to be able to change. People have to see what the alternative is and believe the alternative will get them better results.

Once people see how they’re falling into these Model 1 traps, then we can show them the Model 2 and how it works. People apply it and see the results in their behaviour. Then they become more committed to breaking themselves of those ingrained habits and replacing them with something more effective from a business standpoint and helpful from a cultural standpoint.

Do you enjoy doing it?

I do enjoy it. My colleagues and I get this question a lot. Everywhere we go, regardless of the industry, regardless of country, company, level, function — the organisational problems are very, very similar. They way people go about trying to solve them are also incredibly similar. We see they all fall into the same set of traps.

No matter who you are, no matter where you are, it’s the same sorts of issues.

Yes, but it’s still interesting and challenging. This is not the kind of thing you learn how to do well with one of us speaking at you or by reading it in a book. These workshops are a conversation, where as the leadership educator we’re having to really think about how we discuss this with people. People talk, they have ideas, then they have objections and they disagree — they have their own view of things. We have to work with individuals in a way that really works for them. Every workshop, because you have different personalities and different people and slightly different cultures, every workshop ends up a little different. You can’t just phone it in, you know? You have to be totally present and work with people so they take a hard look at their own behaviour, try on some different things, experiment and discover the way that works with their own personalities when using the practices we know work, because they’re proven in our research. But we also have to be open to looking at the gaps in what we’re teaching and in ourselves — because there’s always more to learn, and the field of leadership and performance management is still relatively new.

So you love what you do.

I’m passionate about it, I think it helps businesses. And, it actually makes a difference to people. A lot of times when they require changes in other people’s behaviour, managers are frustrated. They become cynical about the likelihood of change. So when people apply the practices we teach them they become a lot more successful and optimistic... even in Britain.

Certainly optimism is thin on the ground at the moment and not just in Britain.

Optimism is not something that we’re intentionally trying to produce, but it is one of the consistent outcomes. People feel a lot more optimistic and hopeful about the prospect of improving things inside their companies.

If you weren’t in the career you’re now in, what would you do?

I’d be a race car driver.

Really? Why?

I spent a little time in a race car going around a track and it’s incredibly difficult. When you’re doing it, nothing else exists. You can’t afford a lot of distractions otherwise, best case scenario you’re not going to drive at your best; worst case scenario, you’re going to crash. You have to be able to keep your attention in the moment, but also think ahead. You can’t beat yourself up for making a mistake because in the moment you’re beating yourself up, you’re not focusing on where you are and where you need to go. It’s interesting, rewarding and there’s a great camaraderie around it all. I think I like it for the same reasons I love this field.

It’s fun?

It’s incredibly fun.