I was listening to a news report today about the economy and there was a reference to the consumer confidence index. The analyst giving the report was explaining how when confidence is higher the more spending will occur at both the consumer and corporate level. What’s interesting is that there isn’t a quantifiable relationship between the index and other indices in the economy. Said another way the things that might make you or me or your business or mine spend money is, in part, tied to a subjective sense of confidence in the future.
A description of consumer confidence is in simple terms, “increased consumer confidence indicates economic growth in which consumers are spending money, indicating higher consumption. Decreasing consumer confidence implies slowing economic growth, and so consumers are likely to decrease their spending. The idea is that the more confident people feel about the economy and their jobs and incomes, the more likely they are to make purchases. Declining consumer confidence is a sign of slowing economic growth and may indicate that the economy is headed into trouble”.
So let’s take a look at the aspect of confidence at a different level. If consumer confidence is a driver of spending or financial involvement in the economy wouldn’t confidence in other areas matter also. I am funny when it comes to confidence. My attitude is noticeably different (in a good way) when I am confident. Confident in landing a new deal, confident in a successful outcome of a project, confident in the outcome of a college basketball game…
When I am confident I think openly, take more risk (although it doesn’t appear so), and am more engaging in getting things done. Amplify this across a group of people, a team, department, or organization and it can be magical. Confidence is a higher certainty that a projected outcome will occur. This outcome doesn’t always have to be positive. Even less than positive outcomes with confidence are better for the future of a team than more positive outcomes with uncertainty.
So How Do We Create An Environment of Confidence?
Let’s start with Competency. Competency around the task at hand and the information required to be confident. In Jim Collin’s book “Good To Great” Jim refers to this as getting the right people in the right seats in the bus. Assess your organization and make sure you have the right people for your business AND that they are all in the right job for what you need to get done.
Feedback. Providing consistent feedback (good and constructive) is necessary to build an environment of confidence. People need to know where they stand, how they are contributing and when not aligned what is expected and support to get aligned. have formal feedback sessions. Formal in the sense that they are scheduled and regular. This will keep everyone on their toes.
Intelligence. This is information that is usable. More useful information structured in a way that people, teams, and organizations can act on is critical to establishing an environment of confidence. At the top of the organization the information is more strategic and results-centric. Lower in the organization the information needs to be more tactical and effort-based. As an example individual contributors are more effective with a clear framework for expectation and knowledge to deliver against it. Managers need knowledge that will allow them to clear a path for results and optimize an organization in doing so. Additionally having intelligence around competitors, market dynamics, customer patterns is critical in keeping all your people on their toes and innovating.
Results. Lastly results are what a business delivers or the outcome of a bunch of efforts and decisions, Results that are tied to expectations and meaningful targets defined appropriately at all levels will go a long way to aligning a business and building confidence. Targets that are too easy or too hard won’t do it. Targets that don’t make sense won’t either. Just try to hold a front line sales rep to a target around Net Operating Income or EBITDA. Won’t work. Hold them to objectives that make sense for what they can influence in the business. Qualified leads, appointments, proposals, and closed business.
The Confidence Factor of a business is the sum of the people’s confidence and a powerful competitive tool. Putting a strategy in place to build your business’s confidence can make a difference in both short and long range goals.