Shownotes
There are so many different models of leadership and there are so many different solutions out in the market. Martin Lanik, CEO of Pinsight and the author of the business bestseller, The Leader Habit, says what makes their process different is the realization that traditional classroom-based leadership development just doesn’t work. They focus on 5-minute daily leadership exercises that build positive habits. They work with organizations to help them hire better leaders, and then to promote better leaders to identify the right high-potentials that they should invest in and to develop them to prepare them for executive positions. Martin shares some effective leadership behaviors you can practice to the point that they are your second nature.
Hiring and Developing Better Leaders with Martin Lanik
We are in Downtown Denver with Martin Lanik. He’s the CEO of Pinsight and the author of the business bestseller, The Leader Habit. I had the good fortune of getting a copy before it was released and finished reading it. Martin, thank you so much for taking time to be on the podcast.
I’m happy to be here. Thank you, Bob.
Martin, if you would tell us a little bit about your business and who you serve.
I run a software company called Pinsight and we focus on leadership development and leadership assessment. We work with organizations to help them hire better leaders and then to promote better leaders to identify the right high potentials that they should invest in and to develop them and prepare them for executive positions and work with those high potential as we are developing them.
I’m paramilitary so the leadership model was pretty understood and taught and so on. What took you down the path of working on leadership and developing solutions and applications to help?
I have a background in Industrial Organizational Psychology. I have a PhD from Fort Collins from Colorado State University. I started very early on in my career focusing on leadership and leadership assessment and then development. Then I worked as a consultant out of Pittsburgh and London working with global organizations, helping them with their leadership strategy. When the recession hit, I identified an opportunity. I thought, “There’s an opportunity here in the market where you can take all the really good parts of general leadership programs and then streamline them so they become much more cost-effective and scalable globally. That’s how I founded Pinsight.
Let’s make leadership as natural as brushing your teeth.
I think about the folks that are listening and they’re going, “There’s a number of leadership programs with one description or another.” It’s really module-based inside the book where you could go through and try to do some work with big topics and work your way through, what led you basically to the thought process to start chunking it for lack of a better term?
You are absolutely correct. There are so many different models of leadership and there are so many different solutions out in the market. What makes our process different is the realization that your traditional classroom-based leadership development just doesn’t work. This was actually why I decided to write the book. Several years ago, I came across an article in the Journal of Consulting Psychology that shows that American corporations year-over-year are now spending more and more money on leadership development, to the point that it was about $14 billion in 2012. Our general confidence in leadership is actually decreasing. There’s a negative relationship. We end up spending more on leadership development, but we are less confident and our leaders. Then I started thinking, “Why is this happening? Why are we producing better leaders despite all this investment?” What I realized is that majority of leadership development programs really focused on knowledge. They focus on different theoretical models of what good leadership should look like or maybe personal experience of some wonderful leaders. That does not translate to behavior change.
The Leader Habit: Master the Skills You Need to Lead-in Just Minutes a Day
I started looking at the research on behavior change and more specifically habits. How do people develop habits? How do they adopt and internalize behaviors to a point that they are automatic? They do them without thinking. For example, like making your bed in the morning or brushing your teeth. You just do that automatically. You don’t even think about it. That’s the whole point behind my new book, The Leader Habit that you practice these effective leadership behaviors that we found through our research and you practice them to the point that they are your second nature. You just do them automatically. You don’t even think about that.
Let’s say I’m a big picture leader, but I’m a horrible detail leader. Everybody goes, “You’re really good at vision and whatnot, but you fall off the cliff on the detail execution.” Inside the book, you went through some exercise there. Could you walk us through that?
The first point I would say is you need to be much more specific. What does it mean from a behavioral standpoint? When you say that you’re not a detailed person? What is it that you’re actually not doing that you should be doing? An example that comes to my mind is, for instance, with delegations. The way you are delegating may not be the way that’s effective and successful to use delegates. We can then pinpoint very specific behaviors. For instance, we found throughout research of about 800 leaders around the world that what effective delegation looks like. Effective leaders, when they delegate, they for instance, match the project to the skill. This could be an example of why somebody might describe you as not detail-oriented because you just throw projects and tasks at people without thinking about this and do they have the right set of skills to be successful with this project.
There’s a series of exercises that you do on a repetitive basis that you talked about.
That’s exactly how you internalize it. Think about how do we learn new behaviors? How do we learn to play tennis or football or play a musical instrument? We practice on a daily basis. If we go with that example of delegation for instance, you could build an exercise where five minutes a day when you delegate or when you make the decision to delegate, you write down what are the two most important skills that are necessary to complete this project. Then you rate the employee you are thinking to delegate in a project to on where they are maybe on a scale of one to ten on those two skills. If you practice this for 66 days, you internalize it. After about two months, you’ll notice that you’ll automatically, the minute you think, “I should delegate this project to Tom over here,” you start thinking automatically. What are the skills that are needed to complete this project and is Tom ready to do it?
You’re an exchange student, yes?
Yes. I was born in Slovakia. Back then it was actually Czechoslovakia. I was actually a student in high school and I ended up in California. It was one of those things where I finished high school, graduated and then I figured, “I’m having a really good time here.” I was a teenager living in Northern California. I’m going to just try here for college and see how that goes. Another year of college and then graduate school and the next thing you know, it’s been eighteen years.
I think about for everyone that are here, 66 days, why not 72 or 58 or some other number?
That’s what the research shows. The popular belief that you might probably have heard about it is 21 days. That’s how long it takes to build a new habit. When you actually look at where that estimate is coming from, it’s coming from a claim that a medical doctor made in the 1960sand he said that it takes a minimum of 21 days for people to get used to change from plastic surgery. It’s very interesting how this became the popular belief that it takes 21 days to build a new habit. When you actually look at the research literature, it takes on average 66 days for people to internalize and new behavior to a point where it becomes automatic and they don’t even think about it.
That would explain why the people says 30 days is all it takes. They do it for 30 days and it doesn’t stick. That would explain that very well. Let’s say that there’s a company and they’re listening to this and we want to do some leadership development in our company. What should they expect if they reach out to you or they go to Pinsight?
It stands for People Insight. Just combine those two words and that’s how we arrived with Pinsight.
What should they expect if they were going to do some leadership development using the tools that you bring there?
We always start with an understanding of the company strategy. Any leadership behaviors or any change in leadership behaviors really needs to support the strategy of the business. We ask executives generally, what are the two to three most important strategic initiatives for you? Are you’re trying to grow revenue? Are you trying to increase customer satisfaction? Are you trying to increase the engagement of employees? What is it that you’re trying to achieve? From there, we translate that into leadership behaviors? We have research that tells us, if you are looking to increase operational efficiency, it takes this type of leader and these set of skills. If you are trying to grow revenue or building products, services, it takes this type of leader and these set of skills. We round the critical leaders through an assessment. We place them in a simulation and this actually grew out of the military, this approach. We place them in a simulation for half a day and then we observe what skills, what habits they already have. What makes these simulations different so it’s not just watching videos, you’re interacting with live actors. You are really placed in this fictitious company.
We think of it as a Harvard Business School case study come to life with these live role play. You might have an angry customer calling you, an underperforming employee calling you that you need to coach, maybe you need to do a presentation for your board. It’s very much real life and that’s the key behind these assessments. It’s not just the questionnaire or survey that you fill out. We are actually testing you and testing your skills in a very realistic scenario. That helps us understand what are the leaders strengths and what are their development. Then our software develops or designs very specific development plan for each leader based on this assessment so that you’re closing the gaps that are necessary for them to achieve your business strategy. We have an app that is based on The Leader Habit book. The app gives you daily exercises that you practice. As you are practicing these exercises, it actually tracks your progress so it works like a FitBit. Maybe you started at about 50% when you took the simulation assessment, but now you’ve been practicing for two, three weeks and you see that you have actually improved by 10%, 15%.
Any leadership behaviors or any change in leadership behaviors really needs to support the strategy of the business.
For the companies that engage Pinsight, initially, what’s the tipping point for them to take in and engage Pinsight?
Generally, it’s changes, big changes in the business. It could be a new CEO coming on board and needing to understand, “Do I have the leadership team to help me take the company where I want to take this?” In other words, “Do I have the right people on the bus?” That’s one of the key questions we get. An organization realizing that most of their executives are retiring in the next two to three years, that’s another big trigger. General fed up or disappointment with the leadership programs that they have in place and they want to try something different. Maybe their leadership programs are feeling stale. They are looking to refresh them and that would be another trigger when they generally come to us.
If you’re coming into an organization-wide need, the assessment that you mentioned were there are role, is role play necessarily brought in or can be driven by the software that you have?
It’s all driven by a software. We have a software application that delivers all of this online so nobody travels anywhere to take the assessment. Even with the live role plays from their home and office, we bring the role players through webcam to them.
The role players are used to playing difficult customers.
That’s all they do. That’s their job to be a difficult customer.
I think about the company and the folks that are listening and you’re looking for practical transformation and not just, “Everybody read the book.” What are you getting on feedback after these companies are going through with this process?
We actually do research and launched general research, so we track the leaders over time. First of all, the assessments tend to be about 250% more accurate than job interviews that managers do, which makes sense when you think about all the biases that we have as people. When we’re interviewing people, when we’re deciding who should be the successor or who should be promoted. Then from the development standpoint, most people tend to improve their skills in about two months. You see that there is a visible behavior change that happens in about two month’s time.
I’m a company CEO and I’m listening to the podcast and I go, “I’m interested.” What’s the process for the CEO? Then does the CEO get a compiled report? What’s that process like?
As far as the buying process, we would do a demo and then we would identify the need, scope of the project and then it goes from there. From an implementation standpoint, that analytics is really one of the most valuable things. The most unique and exciting part about our software for me, is that I can see very objectively on a dashboard, the skill set of every single leader in my organization, but better yet, I can see how much they’re improving on a daily basis. I have access to the real-time data of the skill set of people on my bus.
You can tell whether they’re playing or not?
Yeah and who’s serious about their development.
I’m thinking about the software and thinking I’m about the CEO as they’re doing the review. Let’s say the organization has progressed through and everybody’s moved up to speed. What’s the biggest behavioral change that you see from the CEO now that he has this database at hand?
I wouldn’t necessarily say behavioral change, but it is more of a comfort. More of the ability to make better decisions around the people side of the business. You know as a CEO what are your key objective and what you need to achieve. The thing that keeps most executives up at night, I found is just having the right people to do it because you know that you can do it on your own. Especially in large organizations, you need fellow leaders and executives to help you achieve those goals. It’s the ability to have the right set of analytics, the right set of data to make informed decisions around having the right people, the right places to help you achieve what you need to achieve.
Is there a common weakness in organizations or do you see just distributed weakness there?
What I usually find when I do succession planning projects when you do this around the world, is that oftentimes when you put a group of leaders through an assessment, you found that the ones who have been picked as the official successors are usually the ones who are the farthest away from being ready. There tends to be these diamonds in the rough that the company has been overlooking. This process helps them identify those people that are really better fit and requires small investment and can be ready sooner.
Are you finding this as driving behavioral shift in succession planning?
It’s driving conversations and driving revaluation of the succession plans. They are really looking critically at why have we selected these people and what are the biases that came into this? What are the internal politics? They appreciate a much more objective, unbiased way to make these decisions.
How long has your company been around?
I founded the company about eight years ago.
The software came before the book too?
Yes. The several previous versions came before the book. It is last year that we’ve released the new platform of our software that also now includes a whole development solution. Previously, before that we’re focused on the assessment side. Clients where often asking, “We love the data. We can make the right decisions, but what do we do now?”
If there’s a prototypical size of a client whether it’s employee or revenues, is there a prototypical client that serves best?
We usually work with organizations that have at least $100 million in annual revenue and up. Some of our bigger clients are AIG and CenturyLink but we also worked with some mid-sized organizations.
Leadership Development: It’s the ability to have the right set of analytics, the right set of data to make informed decisions around having the right people.
You have employees everywhere. Your clients are also international, correct?
Yes.
You’re in Europe on a regular basis?
Yes. I was last year and almost every other month.
Do you find the acceptance rate different overseas than domestically?
Not necessarily. We work with organizations all around the world and that is really the benefit of having a virtual company and running a virtual online solution. For instance, with one client, a new CEO came on board and very quickly they needed to assess 300 executives around the world so that the CEO could understand...
