invested nearly 30 years of my life as a

professional street performer, traveling the country, mostly working Renaissance festivals as a solo street comedian. I earned a good portion of my yearly income from tips, or what we pros call “passing the hat,” and enjoyed the luxury of only having to work weekends. It was this environment that taught me so much about the nature of business, change, and management.

Renaissance festivals were ushered into existence by the counterculture hippies of the Sixties and are sustained today mostly by the new counterculture of pierced and tattooed heavy-metal misfits. No matter what decade, it has always been home to the fringe, delightful, and a bit strange.

It’s easy to dismiss this type of theater, or any street-performing venue, because it is so unfinished, rough, and seemingly without much control. In truth, the value of these odd performing spaces is because they are rough and bit unrefined. The top performer understands that

the unpredictable and the rough are gifts, and recognizes that the best ideas are often discovered when things seem to be a bit of a mess.

When I was performing, I carried no props and didn’t have a script. My performance was built on the notion that everything I might need for a performance would be present in the audience or the environment. The most powerful insight I gained in the years I spent on

the street was when I realized that if I enrolled my audience (a performer’s version of “a customer”) in partnering with me, I never lacked inspiration because I no longer was working alone! I saw that

the environment itself was often rich with provocation, and that nearly any intrusion or disruption could be used to the benefit of the show. In this way, everything was material, and nearly everyone was my collaborator.

It’s easy to perceive economic disruption as a sign of impending doom and the end of good things. But our anxieties may betray us into believing things that

Please turn to page 7.

volume 3 issue 1 summer 2008

Pulte Homes Weathers Tough Times | Reciprocity and Customers | Plus a ready-to-use visual tool you can use now!

Point of View

a Necessary Roughness

Carr HagermanChief Creative Officer Top Performer

Employee Engagement in an Economic Downturn www.watercoolernewsletter.com

I

It’s easy to perceive economic disruption as a sign of impending doom and the end of good things. But our anxieties

may betray us into believing things that aren’t really true.

� Employee Engagement in an Economic DownturnEmployee Engagement in an Economic Downturn

when people think of current economic challenges, one of the first industries to be mentioned is homebuilding. When that’s your business, keeping employees engaged and confident is a major focus.

At Pulte Homes, we’re proud of our 58-year history and the half-million new homes and communities we’ve built for people across the country, and the awards and recognition we’ve gained over the years. In the past few years, we were growing at a pace that moved us from not even being on Wall Street’s radar screen to being a Fortune 200 company.

Tough Times, Tough DecisionsSince 2006, there’s been a drastic shift in our market. Housing starts that had been at 2 million a year just a few years prior are now less than 800,000. Markets shifted, where supply drastically outweighed demand. We knew we faced a decision: Should we focus solely on the short term, as many of our competitors were doing, or should we take advantage of the situation by building a stronger, more disciplined organization that would thrive in any market? We did both! While shoring up the business in the short term was a key priority, a significant portion of our focus and energy has gone into investing in our employees and keeping them engaged. Because our business is a local business driven by local market knowledge, the value of our employees can’t be underestimated.

Having made that decision and refined our business strategy, we needed a way to communicate it to our employees. We had to do more than just present the strategy clearly, but to explain why it was needed, how the business would change, and most important, what individual employees

needed to do. We wanted to create a sense of urgency for stabilizing the business in the short term while also building a sense of hope that the company would thrive in the long term, even though we didn’t have all the answers just yet.

An Active ResponseWe worked with Root Learning to develop a Learning Map® module, “Thriving in a Turbulent Marketplace.” The intent was to ensure that every employee understood the case for change and their role in the process. Although we were certain that this would help employees be clear about our marketplace realities and strategic direction, we had some unexpected benefits as well. Because we implemented the session using division presidents as facilitators, leaders were able to interact directly with all the employees in their divisions; this showed employees that leadership was dedicated to inclusion, one of our core values. Having division presidents facilitate the sessions also allowed them to have a deeper understanding of where our employees are strong, where they have opportunities to improve, and where there is confusion within the business. The Learning Map® development process also enhanced the alignment of our leadership. A second module will be implemented soon that will more deeply explore the details of the new strategic plan. Together, the maps will create a direct line of sight for employees

and enable them to connect their team and individual actions to our overall strategic direction.

In the near future, we’re hoping that positive market conditions will return. But we’re proud that, in a time when uncertainty forces many companies to be

paralyzed by fear, we decided to take the offensive, and we did so first and foremost

by investing in our employees.

Case Study

Matt BertmanDirector, Leadership Development Pulte Homes

Engaging People in a Down Economy

Helen HamptonDirector, Organization Development Pulte Homes

Employee Engagement in an Economic Downturn � www.watercoolernewsletter.comEmployee Engagement in an Economic Downturn

to earn and keep

the trust of your customers, your company must become a kind of advocate for the customer, and this means applying the philosophical “principle of reciprocity” to all customer dealings. Known to Christians as the Golden Rule, this principle figures prominently in every major religion and humanist philosophy. Applied to your business, it simply means treating a customer the way you yourself would like to be treated if you were the customer.

Feel free to take this approach out of religious conviction, but realize that applying the principle of reciprocity to customers is also the easiest, most direct way to maximize the shareholder value your customers are likely to create for you. Either way, if your business is to earn and keep the trust of customers, then your employees must constantly take the customer’s point of view. What’s it really like to be the customer? What is the day-in, day-out “customer experience” your company is delivering?

• How does it feel to wait on hold on the phone? To open a package and not be certain how to follow the poorly translated instructions? To stand in line, be charged a fee, wait for a service call that was promised two hours ago, or come back to an online shopping cart that’s no longer there an hour later?

• And what’s it like to be remembered? To receive helpful suggestions? To get everything exactly as it was promised? To be confident that the answers you get are the best ones for you?

For a business, reciprocity means operating in a way that constantly looks out for the customer’s own interest, putting yourself in the customer’s shoes, and seeing things from the customer’s own perspective, whether that puts your company and product in a good light or a bad one. Honestly taking the customer’s perspective is really at the heart of understanding and managing the customer’s experience with your brand or product.

Of course, this is already an important objective for any company implementing customer relationship programs with newly available technologies. It’s called many different things, including customer-centricity, CRM (customer relationship management), customer intimacy, customer focus, customer experience management, and one-to-one marketing, but the common thread uniting all these ideas is the belief that a business can compete more effectively by seeing itself through its customers’ eyes.

Research clearly shows that companies with reputations for respecting customers’ interests, get a disproportionate amount of additional business from customers. A Forrester survey of 6,000 North American consumers, for instance, found that companies with a reputation for “customer advocacy” (defined by Forrester as “the perception by customers that a firm is doing what’s best for them and not just for the firm’s bottom line”) tend to outperform other companies when it comes to generating cross-sales and repeat purchases.

If you think about it, this is only logical, because when a customer perceives you to be acting in his interest, he benefits every time he deals with you, which makes it more likely that he will want to do more and more business with

you in the future, and tell his friends good things about you too.

Excerpted from Rules to Break and Laws to Follow: How Your Business Can Beat the

Crisis of Short-Termism (Wiley, 2008) by Don Peppers and Martha Rogers, Ph.D.

www.peppersandrogers.com www.1to1.com

Industry Perspective

Reciprocity:the Golden Rule Applied to Customers

Martha Rogers, Ph.D. Founding Partner Peppers & Rogers Group

Don PeppersFounding Partner Peppers & Rogers Group

Honestly taking the customer’s perspective is really at the heart of understanding and managing the customer’s experience with your brand or product.

Everyone agrees that the economic downturn has caused a lot of distress. Although it’s not really “all in our mind,” mindset does have a lot to do with how we view the future. Let’s talk about it.

1. The man’s head represents a company. Look at the left side of “his head” first. Describe the images and read the signs.

2. Do these behaviors remind you of anything happening at our company? What do you think is the mindset of each person at the edge of Hopeless Gulch?

3. Now look at the right side of the sketch. The people are climbing the same mountain, but with a different mindset. Describe each image on Engagement Terrace.

4. Have we seen any behaviors at our company that remind you of these people?

5. What are the people on the stairs at the lower right doing? Why is this important?

6. In order to get to Payoff Peak, the teams need to pass through the Cloud of Turbulent Times. How does mindset make a difference when companies have to go through that cloud?

7. What are some ways to get our people on the right side of the sketch instead of the left?

8. What will it take to get us to the top of Payoff Peak?

9. When we get there, what different things would we have to celebrate?

Mindset Mountain

� Employee Engagement in an Economic DownturnEmployee Engagement in an Economic Downturn

Try this with your team! How has the economic environment affected your company? Does it resemble this sketch? Gather your team around this illustration and discuss these questions.

Employee Engagement in an Economic Downturn � www.watercoolernewsletter.comEmployee Engagement in an Economic Downturn

How has the economic environment affected your company? Does it resemble this sketch? Gather your team around this illustration and discuss these questions.

� Employee Engagement in an Economic DownturnEmployee Engagement in an Economic Downturn

some companies

emerge from an economic downturn stronger and more highly valued than they were before the economy soured. The big differentiator that separates them from companies that falter is people… how their leaders engage, motivate, and capitalize on their talents and knowledge in the face of adversity.

The critical first step in making sure that people don’t jump on “the freakout train” of doom and gloom is to truly identify with their initial mindset. But how do you tell people that they’re more important than ever after you’ve just laid off 15% of their colleagues?

The Root Watercooler™ sketch at the center of this issue is titled “Mindset Mountain.” On the left, we

see the natural and absolutely destructive behaviors that kick in during bad times. In essence, people are typically trapped on three “Survival

Cliffs” – the emotions of control, fear, and anxiety. The focus shifts from team performance to self-preservation, and this is exactly the opposite of what’s needed! At a time when we need people to contribute their best, we often see the worst. At a time when information is vital, organizations go silent. And at a time when we need to take smart risks, people become more conservative than ever and play it so safe that it accelerates more negative outcomes.

Engaging people in turbulent times requires leaders to be aware, care, and be regularly engaged in truth telling.

One of General Colin Powell’s leadership lessons applies well here: “The day soldiers stop bringing you their problems is the day you stop leading them. They have either lost confidence that you can help them or have concluded that you don’t care. Either case is a failure of leadership.”

The key is to use the adversity to engage your people (see the “Engagement Terrace” on the sketch) to constantly define reality, communicate the score, use urgency as an alignment ally, scout the possibilities, and celebrate small victories.

1. define reality. People are amazingly able to deal with reality even if it has a downside, but the unknown is paralyzing. The leader’s job is to bring the facts of “exactly where we are” to the workforce. Not only can most people handle it, but they crave it in times of economic trouble. Uncertainty has greater negativity than the bad news itself. That’s why accurate “big picture” news becomes an important tool. Providing the context of actions, or the “whys,” is essential.

2. communicate the score. More than ever, people are interested in costs, sales, and financial strength as a measure of “how we’re doing.” Use this curiosity and interest to better immerse all employees in the metrics of the business. Leaders need to balance the tension of “what’s real” with “what’s possible.”

From the CEO’s Desk

changing mindsets inTurbulent Times

Jim HaudanChief Executive Officer Root Learning, Inc.

Engaging people in turbulent times requires leaders to be aware, care, and be regularly

engaged in truth telling.

Employee Engagement in an Economic Downturn � www.watercoolernewsletter.comEmployee Engagement in an Economic Downturn

3. use urgency as an alignment ally. Instead of looking at change like a near-deathbed crisis lurking just around the corner, accelerate your efforts to immediately analyze and act on problems instead of wandering around it. Urgency can better frame the challenges, engage people in a deeper understanding of the issues, and equip them with the responses necessary to be successful.

4. scout the possibilities. Deputize your people as “opportunity scouts.” Doing so means tapping into what your people know about the current challenges and getting them involved in imagining a response and a recovery plan that creates value in the current environment. No matter how intensive past productivity efforts have been, people can always see more opportunities when they are engaged in the “why” and the “what,” and then given a chance to suggest the “how.”

5. celebrate small victories. This means even more recognition of the adaptive actions that are getting positive results. Don’t over-hype the small gains, but in baseball lingo, it’s the singles and doubles that allow you to emerge stronger and persevere throughout the game.

As leaders, we need to ask ourselves these questions: Am I defining reality and creating hope in this economic downturn? Am I helping my people to become the change agents that we need them to be so we can thrive in difficult times? And do they truly know the score so

they can actively engage in improving it?

Jim Haudan’s book, The Art of Engagement: Bridging the Gap Between People and Possibilities, will be released by McGraw-Hill in August. www.rootsofengagement.com

aren’t really true. Perhaps we’ve cultivated an unrealistic belief in stability and symmetry, though we know life doesn’t roll that way forever. Roughness and disruption are just “hecklers,” reminders that life, like the street performance in the park or on the dirt lanes of a festival, leans towards emergence.

As a performer, I have learned to embrace the mess, be comfortable with the roughness and the unfinished, and become inspired to collaborate

with others in new and interesting ways. We aren’t alone here, and there are so many resources to draw from, even when it feels like we’re in a bit of a jam. It’s likely that, when we look back on this rough patch in our nation’s economic history, we’ll recall just how many useful ideas were born and how much we improved our businesses. We may also recall, in retrospect, that we had everything we needed, that we had one another, and a big, beautiful rough-and-tumble mess called life.

For 15 years, Carr has been committed to bridging the worlds of art and commerce. He’s translated his streetwise wisdom into Top Performer: A Bold Approach to Sales and Service, co-authored with Stephen Lundin, Ph.D. Learn more at http://topperformer.com.

a Necessary Roughnesscontinued (from page 1)

It’s likely that, when we look back on this rough patch in our nation’s economic history, we’ll recall just how many useful ideas were born.

5470 Main Street Sylvania, OH 43560

Events and NewsWant a free copy of Jim Haudan’s book, The Art of Engagement? Go to watercoolernewsletter.com to find out how.

“Leading with Kindness: How Good People Consistently Get Superior Results,” American Management Association webcast, September 10, http://www.amanet.org/events.

The World Business Forum, September 23 & 24, Radio City Music Hall, NYC.

Jim Haudan, CEO Root Learning, will be presenting at a luncheon during the World Business Forum on September 24 at Cipriani, Rockefeller Center. For more information, go to www.hsmglobal.com.

Perseverance is not a long race. It is many short races, one after another.

– Walter Elliot

CLO Symposium, Measuring Success: Learning’s Positive Impact on Business, September 24 – 26, Hotel del Coronado, Coronado, CA, www.clomedia.com

Learning 2008, October 26-29, Orlando, http://www.learning2008.com/

The next issue of The Watercooler will be published in October.

Visit our new website! watercoolernewsletter.com