Tim Clark sent me his book, Epic Change: How to Lead Change in the Global Age. I like it a lot. He points out what a lot of leaders and commentators fail to notice: that the leaders’ (plural on purpose) ability to draw out people’s discretionary efforts is more important in success than strategy or other issues that are usually assumed to be primary success factors.
I also like his other central point - that the role of leader(s) is largely one of energy management within an organization; generating, releasing and channeling people’s energy.
This brief extract is particularly relevant to leadership today:
Great results over time isn’t a mark of a great leader, it’s often a sign of a ‘Teflon’ leader
“I was more than a bit startled to hear a quartet of prominent leadership scholars recently declare that ’superior results over a sustained period of time is the ultimate mark of an authentic leader.’ My own research comes to a very different conclusion. What I find instead is a pattern in which capable leaders at every level are struggling with unremarkable results and are often checkered with failure. The leader who is able to move through a career with sustained results and uninterrupted success is the rare exception indeed.
“Often these are the leaders who are either not playing hard enough or gaming the system to select low-risk opportunities that are likely to return professional success. So-called Teflon leaders are more often those who have ridden market waves but successfully avoided down cycles.”
(This is an extract from September’s Taking The Lead, the monthly email newsletter from Leaders in London, published today).
Carly Fiorina led the merger of HP and Compaq before being given the order of the golden boot, but has since had her reputation re-built by results: Thanks to her HP strategy, Hewlett-Packard overtook IBM last year as the world’s largest technology company. Tom Peters, the business guru and a past Leaders in London speaker, now refers to her as his “CEO Hero”. Fiorina likes to quote Lao Tsu:
“A good leader is he whom people revere.
An evil leader is he whom people despise.
A great leader is he of whom the people say
‘We did it ourselves’ “
(Or she, of course). Yes, we’ve used that before here, as it’s my favourite leadership quote.
Fiorina is talking about embedding leadership within the system. At the moment, a lot of companies are dealing with the downturn by pulling leadership – as in decision-making about the future of others – back behind closed doors. Those outside the doors wait to learn their fate; who will be cut, who will stay.
The lesson of every downturn is lost on subsequent managers going through this same process; the approach destroys morale and lowers performance, the very attributes that will get you through the downturn. Smart leaders have open conversations with the workforce and enroll them in helping to find efficiency savings, cut costs, abandon inefficient old ways of working and move to new ones.
(If you found that extract useful, you can subscribe to Taking The Lead using the link on the right. If you are already a subscriber, you should receive yours today - and you can skip the next post…)
This is an excerpt from September’s Taking The Lead, the monthly email newsletter from Leaders in London. If you like it, you can subscribe using the link on the right. If you already subscribe it should land in your in-box any minute.
Carly Fiorina also reminds us that you will navigate best through the current turbulent economic conditions if your attention is kept outward, on forward indicators, rather than being sucked into the classic mistake of looking inward and focusing almost exclusively on resource reduction (cuts) without paying enough attention to what’s coming. Fiorina says you need to watch four leading indicators:“The leading indicators of any business are
1. Customer satisfaction
2. Rate of innovation
3. Diversity of your management team
4. Ethics”
Now, that’s really interesting because, apart from the first one, most companies would have rolled those bottom three, or at least the bottom two, up into the category of ‘nice to have in good times, but time to ignore them and bare our teeth now’.
Why Diversity? “If everyone thinks in the same way…something important is going to be missed, some problem ignored, some risk under-estimated. The only antidote to the dangers of ‘group think’ is a diverse team sitting around the table,” says Fiorina.
And Ethics? The FT reported recently that regulators are on the lookout for a rise in questionable behaviour as companies take whatever measures they can to protect themselves from the downturn. If you sail close to the edge, argues Fiorina, inevitably someone in your organization will cross the line. And, in a transparent age, you’ll be sunk.
* * *
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Some sectors of the economy have been hit harder by the downturn than others. This is always the way. Leaders in those sectors are possibly, for the first time in their career, looking at how to avoid failure big time. It’s easy to ride the wave of a buoyant economy and look successful. It’s only when the tide goes out, as Warren Buffett likes to say, that you find out who’s swimming naked.Also, to be fair, you can be a very good leader and also fail. Failure isn’t a sign of bad leadership. A long, glittering, successful career, likewise, can just be a sign of adeptness at avoiding trouble rather than brilliance as a leader. But, that’s for another post.
So, if you are looking to make big change in response to changed economic conditions, what framework of change to choose? Past Leaders in London speaker Allan Leighton tells us you have two paths to choose:
Failure, he says, comes to CEOs who rely almost exclusively on Theory E. Here’s how it works:
“CEOs who believe in Theory E (the Economic theory of firms) focus their energies on achieving economic value through restructuring. They believe that change should be driven from the top and that people, culture and organizational arrangements are not a priority.
“CEOs who employ Theory O (Organizational) strategies for change, on the other hand, believe in the development of the organization’s human potential. Rather than change driven from the top, Theory O strategies for change involve employees in identifying barriers and creating better ways to run the business.”
Source: Allan Leighton, explaining Harvard Professor Michael Beer’s theory of the need for balance between the two theories, and how Leighton uses this approach in his companies, from his book Allan Leighton on Leadership. You can watch clips of Allan Leighton and other 2007 speakers, to give you a taste of what to expect from Jack Welch, Carly Fiorina, Daniel Goleman and our other 2008 speakers, on Leaders in London TV.
Martin Sorrell, CEO of the advertising and marketing group giant WPP, has been in the news recently , pouring resources into China. His reasoning is that if you are leading for growth, then you have to look to be where the growth will be. And it won’t be America. Sorrell spoke at Leaders in London for us last year and a clip is below, in which he talks about this strategy.
Of our 2008 speakers, Andy Cosslett, CEO of IHG, the hotels giant whose brands include Holiday Inn, is also expanding the company’s presence in China - spectacularly so. IHG already employs 32,000 people in China. It needed to recruit 20,000 more before the end of this year to keep up with its expansion plans.
Like all of us, IHG faces a war for talent in moving into new regions. So, they grow their own. They are building 22 IHG Academy sites in China to train local people and then recruit them. Twelve of the sites have been built already and thousands of local Chinese are trained to IHG standards in how to run a hotel and then employed each year. IHG’s future leaders within China will emerge from these new cohorts they are developing themselves.
So, to lead for growth in tough trading conditions, it seems you need to look East, not West. Are you facing the right way? And are you putting the resources in to get the results you will need? More from Martin Sorrell in the clip, below.
As mentioned in the post below, it occurs to me a lot of us are leading through a downturn - tough trading conditions, whatever you want to call it - for the first time. So, Douglas Adams’ advice from The Hitchhiker’s Guide To The Galaxy, is the best of all. It’s on the button.
Part of your leadership job now is helping others not to panic, too. People panic when they feel things are out of their control. Rising energy and food prices, an uncertain economy, talk of recession, worries about their own future as some organizations shed jobs…All of these can contribute to low morale and a drop in performance just when you need a high performing organization most.
You help fix that by:
Clearly setting out what’s happening in your market. Also, listening to what your front line is telling you is happening in the market, as they are your eyes and ears and often know best what needs to be done.
Involving people on how the organization should respond to emerging trading conditions.
And doing what you say you’ll do.
‘Consulting’ doesn’t mean a long drawn-out consultation process. It means using the rapport and open communications channels you have established with individuals and people en masse to involve them in adjusting the organization or team’s path to account for changes in the market: you need their agreement and buy-in, as always, and then they’ll help you get there.
Daniel Goleman calls this ability to take the emotional temperature of the people who report to you ’social intelligence’ - part of the broader ‘Emotional Intelligence’ that he has popularized. Where EI includes knowing yourself and your emotions, SI focuses on knowing the emotions of people you work with, who report to you, and customers. This used to be called ’soft stuff’. But, as it’s critical to how you and your people adapt to the current environment - whether you thrive or not - and to maintaining high performance, the soft stuff is now clearly the hard stuff.
Goleman is coming to Leaders in London to help us lead in a way that harnesses Social Intelligence.
Bill George, who is coming to speak to us at Leaders in London, emphasises a point that Warren Bennis, the leadership guru, has been making for a long time: that great leaders are forged in hard times. Bennis says you don’t really know who you are until you have been through what he calls ‘the crucible’ of tough times.
Now, it occurs to me that many leaders out there have not been through a downturn before. And this is the first time your mettle is tested in leading through tough trading conditions. This may be your crucible time. Lesson one: Those oldies among us who have been here through previous downturns are still here. It can be done. Lesson two: get things in perspective. This will help…
After the awful Madrid plane crash last week, I was contacted by Pedro Algorta, who survived a plane crash in the Andes in 1972. He asked me to look at his blog. Part of my interest in leadership is how ordinary people are capable of extraordinary things, and how leadership (self-leadership and with the help of other leaders) can make that happen. Sometimes we only become aware of our ability to perform at extraordinary levels when facing the unfaceable, as Pedro did. Here are the key learning points he says come out of his survival experience. They apply to leading people and organizations in tough times, if you think about it. A biography of Pedro and link to his blog are below.
“1. The extraordinary capacity of the human being to overcome the most adverse situations. When one is almost defeated or dead, we build up strength from adversity to continue fighting for life. We go deep into our most basic instincts and gather strength to live.
2. We were ordinary people. Anyone, under similar circumstances would have done the same, and eventually survived. And once you have overcome your mountain, you have another one to climb. Ordinary people can accomplish extraordinary objectives.
3. We couldn’t have survived individually. Survival was team work, which needed each one of us to be OK. You need to work for the team and for you.
4. There were no absolute leaders. Different leaders emerged according to different circumstances. You have to find your authentic leadership style. Not all leaders are alike. One thing is to be a hero, another is to lead.
5. The final walk, as a group objective. The need to live focused on surviving day by day. One day at a time.
6. We didn´t have all the answers. We wanted to live, we worked to survive, but we were not sure we were going to make it.
7. Our enormous capacity to recover. Our resilient capacity. After this ordeal, we have all lived ordinary lives. How we managed. The need to put it in a backpack and look forward.
8. The different perceptions. The ordinary out of the extraordinary. For 35 years this ordeal was not an issue for me.”
About Pedro Algorta
“I am one of the survivors of the Uruguayan airplane that crashed in the Andes Mountains in 1972. Following the crash, I moved to Buenos Aires, where I graduated in Economics at the University of Buenos Aires and then furthered my education taking a Master in Business Administration from Stanford University in 1982. I have served in top management and board positions in first class Argentine companies in the food and beverage industry such as Cervecería Quilmes, Peñaflor, Campofrío and Cepas Argentinas. While doing my mainstream corporate life, I seldom talked about my Andes survival experience. But now, free of day to day responsibilities I am looking back into my ordeal and I’m willing to share my Andes experience and how I managed to live an ordinal life after such a difficult experience. I’m married to María Noelle, my wife since 1974 and mother of our three children. In 2003, we acquired a cattle breeding ranch in Uruguay, in which we apply state of the art breeding practices. Today, my time is devoted to managing my ranch, leading workshops and talking about my Andes ordeal and visiting our children and grandchildren in Spain.”
Here’s his blog: Survivor Walk (www.survivorwalk.blogspot.com)
Over in Leadership Now’s Leading Blog, Michael McKinney summarizes the four essential things you need to do to inject urgency into the organization, according to Professor John Kotter’s new book, which we previewed below. Michael says:
1. Bring The Outside In
“Kotter offers four tactics to establish a sense of urgency in any environment:
First, bring the outside in. A “we know best” culture reduces urgency. “When people do not see external opportunities or hazards, complacency grows…. With an insufficient sense of urgency, people don’t tend to look hard enough or can’t seem to find the time to look hard enough. Or they look and do not believe their eyes, or do not wish to believe their eyes. Even if seen correctly, and in time, external change demands internal change.”
2. Model it every day
The second tactic is to behave with urgency every day. “Increasingly changing environments create a need for alertness and agility, which demands a sense of urgency that must be modeled by the boss all the time.” A few of the behaviors he details: purge and delegate, speak with passion, walk the talk.
3. Find opportunity in crisis
Third, find opportunity in crises. A problem with a damage control mind-set is often eliminates an opportunity. A properly leveraged crisis can be a valuable tool to break through complacency.
4. Deal with the ‘NoNos’
And fourth, deal with the NoNos – those people that are “always ready with ten reasons why the current situation is fine, why the problems and challenges others see don’t exist, or why you need more data before acting.”
I think 4. is the same as 1. and can be summarized as ‘Challenge denial’. What’s the most powerful force in the Universe? I once heard James Taylor say (no, not THAT James Taylor. This one’s the former CEO of Gateway and co-author, with Watts Wacker of the Five Hundred Year Delta).
Love? Hate? Gravity? Compound interest, as Einstein is supposed to have said? Nope. The most powerful force in the Universe is denial. When I say that in workshops I always expect someone at the back to stick their hand up and say “Oh no, it’s not…” (Think about it).
A nice reminder of what a leader’s approach should be, in contrast with the mindset a lot of leaders fall into in a downturn: time to be ruthless with people to show how strong you are as a leader. You need to rethink that one if that’s the mindset you are in at the moment.
These are from the book The Leadership Secrets of Colin Powell, by Oren Harari, who is the source of a lot of material on Colin Powell’s leadership that people often assume comes direct from Powell himself. A lot of it does; the rest is Oren Harari’s interpretation of General Powell’s leadership. The next post down contains a video clip: 13 Rules for Leadership that do indeed come from General Powell himself.
Being responsible sometimes means pissing people off.
The day soldiers stop bringing you their problems is the day you stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership.
Don’t be buffaloed by experts and elites. Experts often possess more data than judgment. Elites can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world.
Don’t be afraid to challenge the pros, even in their own backyard.
Never neglect details. When everyone’s mind is dulled or distracted the leader must be doubly vigilant.
You don’t know what you can get away with until you try.
Keep looking below surface appearances. Don’t shrink from doing so (just) because you might not like what you find.
Organization doesn’t really accomplish anything. Plans don’t accomplish anything, either. Theories of management don’t much matter. Endeavors succeed or fall because of the people involved. Only by attracting the best people will you accomplish great deeds.
Organization charts and fancy titles count for next to nothing.
Never let your ego get so close to your position that when your position goes, your ego goes with it.
Fit no stereotypes. Don’t chase the latest management fads. The situation dictates which approach best accomplishes the team’s mission.
Perpetual optimism is a force multiplier.
Powell’s Rules for Picking People: Look for intelligence and judgment, and most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego, and the drive to get things done.
Great leaders are almost always great simplifiers, who can cut through argument, debate and doubt, to offer a solution everybody can understand.
Part I: Use the formula P=40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired. Part II: “Once the information is in the 40 to 70 range, go with your gut.
The commander in the field is always right and the rear echelon is wrong, unless proved otherwise.
Have fun in your command. Don’t always run at a breakneck pace. Take leave when you’ve earned it: Spend time with your families. Corollary: surround yourself with people who take their work seriously, but not themselves, those who work hard and play hard.
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