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Successful Approach Your approach to leadership may be bold as you go for the goal, but monitor your success rate and brand your development so that you cultivate sound judgment and lean thinking and learn the lessons of wins and losses.

JIM COLLINS in talent-share? ...... 8 Learn from your Revamp old ways of Failure or Fallure losses and victories . . . .13 recognizing people . . . .17 Start measuring JUDITH A. HALE OWARD UTTMAN your success rate ...... 3 Certification ANDRE MARTIN H G It’s a retention and cost- Creating Leader 2.0 Decision Leaders JON YONGER, NORM saving strategy ...... 9 Engage in an action- They are both decision SMALLWOOD, AND learning approach . . . . .14 makers as well as DAVE ULRICH NOEL TICHY AND decision mentors ...... 18 WARREN BENNIS CHRISTOPHER RICE Branded Developers ICHAEL RANT They engage in Sound Judgment Four Priorities M M. G job sculpting ...... 4 This is what great Make talent Performance Management leaders possess ...... 10 a top priority ...... 15 Use quality principles KATHRYN GRIFFIN to manage people . . . . .19 Lawyer CEOs ROB LEBOW JOHN BOSTICK TEPHEN ABOT AND Your chief counsel Lean Thinking Ride the Turbulence S J. C may be a leader ...... 6 See and manage your Manage well the JULIUS M. STEINER firm as a system ...... 11 transition points ...... 16 Make Your Company LANCE SECRETAN a Great Place to Work Bold Dreams MICHAEL FEINER JOAN MARQUES Craete a menu of Align your people Commitment Awakened Leaders benefits and options . . .19 behind your dream . . . . .7 This is what drives They share five high performance . . . . .12 traits in common ...... 16 MARILYN MANNING BRIAN C. WALKER Embrace Diversity The Race for Talent RICHARD LEPSINGER ADRIAN GOSTICK Set ground rules for Are you gaining Five Lessons The Carrot Principle working together ...... 20 Subscription and Renewal Rates: $129 annual (12 issues) $199 two years (24 issues) E . D . I . T . O . R’S N. O . T . E $279 three years (36 issues) (Canadian/foreign add $40 U.S. postage per year.)

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of Life Leadership. In this monthly Article Reprints: magazine (now in its 12th year), For reprints of 100 or more, please contact the editorial department at 801-375-4060 or send we provide the best and latest email to [email protected]. HEN YOU ARE thinking on seven dimensions of trying to do whole-life growth, improvement, Internet Address: http://www.eep.com Wsomething—and progress, and positive change. Editorial Purpose: Our mission is to promote personal and organi- what could be more worthwhile to So, our personal leadership zational leadership based on constructive values, do at work than developing your resources emphasize the discipline sound ethics, and timeless principles. leadership—it’s smart to start with of appetites, passions, compul- Editorial: a plan. Body Leadership sions, and obsessions and the All correspondence, articles, letters, and requests to reprint articles should be sent to: Editorial Indeed, the old aphorism—plan development of habits, attitudes, Department, Executive Excellence, 1806 North your work, work your plan—still and behaviors that bring out the 1120 West, Provo, Utah 84604; 801-375-4060, or [email protected] applies. best in you. Over the years, I have seen sev- Contributing Editors: Organization Side of Leadership Chip Bell, Dianna Booher, Kevin Cashman, eral good leadership development Jim Loehr, Norm Smallwood, Joel Barker, Joseph plans that are specific to a certain Once you start or join a team or Grenny, Jim Kouzes role, style, function, team, organi- organization, you become a mem- Executive Excellence Publishing: zation, industry, or military unit. ber of a performance unit that Ken Shelton, Editor-in-Chief, CEO Rick Weiss, Creative Director The Marines, for example, have a delivers some kind of product or Kathi Christman, Marketing Manager Geoff Pace, Sales Manager great plan for developing Marines. service. This requires you to work Allan Jensen, Chief Information Officer And most organizations have some with other people who are, hope- Sean Beck, Circulation Manager semblance of a plan for developing fully, engaged and aligned behind Cover photo is © Joel Grimes. “leaders like us.” Life Leadership a common purpose. So, we pro- For years, we have recognized vide two resources to develop Approach—BaldThe table of contents Eagle Conservationart is a detail Edition from the need to have a more universal esprit de corps, execution, and team (image cropped) © Robert Bateman, and is courtesy of the artist and art print publisher template that takes into account excellence: Mill Pond Press. the personal side of leadership • Sales and Service Excellence, The For additional information on artwork by and enables you to create your Magazine of Team Leadership. In Robert Bateman please contact: own development plan or to cus- this monthly magazine (now in its Mill Pond Press, Inc. th 310 Center Court tomize a plan for your team or 7 year), we package the best and Venice, FL 34285 organization. latest thinking on seven dimen- 1-800-535-0331 I finally feel we are ready to sions of sales and service team www.millpond.com introduce the Leadership Excellence performance (since all members of Plan and make it the centerpiece of a team have a role to play in these our Excellence Performance System. Team Leadership vital areas—whether they know it The four quadrants of the or not). plan—two on the personal side • Leadership Excellence, The and two on the team and organiza- Magazine of Organization tion side of leadership—parallel Leadership. In this monthly maga- our four monthly magazines. zine (now in its 24th year), we pro- Personal Side of Leadership vide the best and latest thinking Full view of table of contents art. on seven dimensions of manage- Unless you start with the per- ment and leadership of teams and Copyright © 2007 Executive Excellence Publishing. No part of this publication may be reproduced or sonal side of leadership, you build organizations with an emphasis transmitted without written permission from the on a foundation of sand. The lives on the timely application of time- publisher. Quotations must be credited. of many leaders melt once they less principles. experience the heat of the position. To access our new Leadership Organization Excellence Plan Hence, we provide two resources Leadership , visit the home page to develop character, competence, of our website www.Leader and resilience: Excel.com and click on the LEP • Health and Fitness Excellence, The Magazine icon. You may also want to explore the on- of Body Leadership. In this monthly maga- line article archive. LE zine (now in its 2nd year), we package the best and latest thinking on seven dimensions of personal wellness and performance. Editor since 1984 2 Leadership Excellence PERFORMANCE EXCELLENCE I’d almost certainly fall. Even if I did manage to surge upward, the higher I went without making the next bolt clip, the bigger the eventual fall. (To “clip” means to get the rope into the carabiner hanging off a protection bolt. FailureWhat constitutes or trueFallure success? If you fall when leading, you descend about 2.5 times as far as the distance to your last successful clip.) by Jim Collins say, “the clock is ticking” from the “Off!” I called down to Matt. moment you leave the ground. You “No,” he yelled back. “You’re only only have so many minutes and sec- three moves from the crystal.” OME OF MY MOST onds before your fingers uncurl off the “OFF!” I repeated, with angry valuable lessons holds, and you plummet down until emphasis. Sabout leadership and (hopefully) the rope catches. And I let go, dropping onto the life have come from a special class- “Breathe, Jim. Relax.” Matt’s voice rope in a nicely controlled fall. room: the sheer rock walls of Colorado soothed me for a moment. I hung on the rope for about 10 and the towering cliffs Yosemite Valley. I gathered a bit of composure, while minutes, recovering, and then swung In this laboratory of personal chal- hooking my thumb and resting my fin- toward the rock on the end of the lenge—hanging by fingertips from lit- gers, trying to get my breathing to set- rope, pulled myself back on to the tle edges, tethered to a great partner, tle down. But to little avail. My mind holds and climbed to the top. But of confronting fear and discovering per- chattered away: “Not sure whether to course it didn’t count. I hadn’t done a sonal weaknesses (and an occasional go right hand or left hand to the side- clean on-sight. And even though later strength)—I’ve come to see the pursuit ways edge above . . . If I get it wrong, in the day, I managed to ascend the of excellence as a quite different con- route from bottom to top in one shot— cept than pursuit of the summit. a success by most measures—I had In fact, some of the proudest days nonetheless failed. When confronted come in not reaching the top, and with the moment of commitment, the some of the most disappointing days moment of decision, the moment of come with summit success. go-for-it on the on-sight . . . well, I let go. I went to failure, not fallure. * * * * * Matt and I stood below an * * * * * absolutely beautiful sheet of rock— Failure and fallure. The difference is smooth and overhanging, with a fin- subtle, but it is all the difference in the ger-tip sized seam splitting the middle world. In fallure, you still fail to get up of the grey-and-silver granite wall. the route, but you never let go. Going “You can see why I named the route to fallure means full 100 percent com- Crystal Ball,” Matt said, pointing to a mitment to go up, despite the odds baseball-sized quartzite handhold 50 against you. You’ll only find your true feet up the climb. limit when you go to fallure, not fail- We roped up, and I set off up the no way I can reverse . . . and even if I ure. Sure, I had less than a 20 percent route, shooting for an on-sight ascent. get it right, I’m not sure I’ll have chance of pulling through to the crys- An “on-sight” means that on your enough power to pull up to the crystal tal ball, but because I let go, I’ll never first try you lead the climb without ball . . . and if I can’t get to the crystal know for sure. Perhaps I would have any prior information about the ball, there’s no way I’ll be able to get had an extra reserve, perhaps I would moves. For you, the route is an entire- the rope clipped into the next point of have surprised myself and had an ly blank page—no matter how many protection . . . how far would I fall? But extra bit of power to hang on for one other climbers have ascended the I don’t like to take big falls . . . “ more move. Or perhaps—and this route. Once you start to climb, if you Tick, tick, tick—the clock ran on turned out to be true—the very next blow it (and thereby fall onto the while I hesitated. hold is better than it looks. And that’s rope), you’ve forever lost the on-sight. “OK, Matt, here I go.” the rub. It’s the ambiguity—about the Ten feet below the crystal, my feet Right hand to the side pull. Left holds, the moves, the ability to clip the began to skitter, slipping off slick peb- foot to the edge. rope—that makes 100 percent commit- bles, and I curled my thumb around a Uh oh, wrong call. I should have ment on the on-sight so difficult. little edge, thinking to myself, “If I can gone to the edge with my left hand! I One of my mentors, the design just get a little weight off my fingers . . .” rolled my body to the left, groping for guru Sara Little Turnbull, built a dis- The adrenaline made me over-grip an edge, a pebble, a wrinkle—some- tinguished career as a design consul- every hold, sapping strength I would thing, anything—that would allow me tant to major corporations. (The need higher on the climb. A hard sport to pop my right hand up and move my Corporate Design Foundation once climb is a race to the top before you left onto the side edge. I smooshed my described her as “the CEOs’ secret run out of power; moves that would be right fingers into a little edge that weapon in product design.”) Turnbull easy if they came at the bottom are pointed down and sideways—the once told me that some of her best much harder when found higher on wrong direction for a good pull. I now designs came when she was on the the route when you hit those moves had a less than 20 percent chance of brink of a failed concept but didn’t let already fatigued. As climbers like to success. If I tried to make the move up, go. Of course, many—indeed, most— Leadership Excellence 3 PEOPLE DEVELOPMENT of her brink-of-failure designs ended holds in life remain unclear, ambigu- up being failures. But every once in a ous. And that very ambiguity holds us while, by not letting go, she would back from making a fully committed push herself to a completely different attempt. We fail mentally. We let go. level, and something extraordinary We take a nice controlled fall, rather Branded would come about. “And, of course, than risking a bigger fall. But as with that’s when breakthroughs happen,” most hard sport climbs, going to fal- TheyDevelopers think differently. she told me. “If you don’t stretch, you lure in life is scary, but not dangerous. don’t know where the edge is.” Whether it be starting a business or Fallure, not failure. publishing a book or trying an exciting Business Example new design, fallure rarely means doom. And most important, the only Some of the best way to find your business leaders in true limit is to go to history intuitively fallure, not failure. by Jon Younger, Norm understood this idea. Facing 50, my Smallwood and Dave Ulrich Darwin Smith made a body does not allow fallure versus failure me to pull as hard BRANDED decision in vaulting on holds as when I HE COMPANIES WE CALL his company to great- was 20. But I’ve developers have a track record of ness. For 100 years, since learned that Texcellence in leadership development Kimberly-Clark lan- what you lose in and turn this reputation into a source guished in mediocrity, physical strength of competitive advantage in recruiting, with most of its busi- you can gain by engaging, and retaining employees. ness in traditional increasing your Branded developers enjoy powerful coated paper mills. mental strength. benefits. They recruit at lower cost, Smith realized that I’ve even rede- have first pick of the best employees, the company’s best fined “success” less and achieve higher retention. They cre- shot at greatness lay in terms of getting to ate a deep talent bench, enabling them in the paper-based the top and more in to drive organic growth. Investors often consumer goods arena, where it had a terms of the quality of my mental reward them with a valuation premium side business called Kleenex. But how effort. I keep a record on my Palm Pilot because they instill confidence and to get the company to fully commit to of my hard on-sight attempts. A recent keep performance promises. Customers making the consumer business great, listing reads: prefer to deal with them, as employees when the bulk of the company’s histo- HARD ON-SIGHT ATTEMPT LOG who know them get things done and ry and revenues lay in the traditional REACH THE TOP: 24 nature long-term relationships. industrial paper mills? CLIMB TO FALLURE: 18 Branded developer think differently Like the general who burned the FAILURE (LET GO/QUIT): 16 about people and careers in 10 ways: boats upon landing, leaving no retreat TOTAL ATTEMPTS: 58 1. Branded developers hire for people, for his soldiers, Smith decided to sell % SUCCESS RATE: 72% not jobs. For them, recruiting is about the mills. He would sell even the mill (TOP + FALLURE) finding great people, not filling posi- in Kimberly, Wisconsin, and throw all tions. They look for talented individu- the proceeds into the consumer busi- als who make long-term contributions ness, going head to head with con- Note that I calculate the “success as effective business and functional sumer rivals Scott Paper and Procter & rate” not just as the percentage of leaders. As a result, they think differ- Gamble. Wall Street derided him, the times to the top, but the percentage of ently about the qualities most impor- business media called the move stu- times to the top plus percentage of tant in those they hire, and often hire pid, and the analysts wrote merciless times to fallure. During a recent employees with unconventional back- commentary. But in the end, Smith’s climbing session, I did not make it to grounds or experience. Because they decision paid off. Kimberly-Clark the top of a single route. Not one. hire for talent, not positions, the hiring became the number-one paper-based Still, it was one of my most successful process is more rigorous. consumer products company in the days of climbing ever, because I went Branded developers use three tests to world, eventually beating Procter & to fallure on every single attempt. I assess prospects: Do they have the capa- Gamble in six of eight product cate- felt good on the way home because bility to succed here? What is their gories. Of course, there was no guaran- my mind felt strong that day, com- potential for leadership? What is the cul- tee that Kimberly-Clark would pared to the weak feeling on most tural and values fit: Is he or she like us? succeed in the consumer business—it days. For in the end, climbing is not Values congruence is particularly impor- could have taken a huge leader fall— about conquering the rock; it is about tant. The websites of branded develop- but Smith understood the only path to conquering yourself. This is what fal- ers represent their history, values, and success lay in a full commitment to lure is all about. LE the unique competencies they seek. climb to fallure. Jim Collins is author of Good to Great and co-author of Built to 2. They hire special role players. Go to Fallure Last. This article was adapted for Leadership Excellence from Although branded developers primari- Jim Collins’ chapter “Hitting the Wall” from the book Upward Bound, Edited by Michael Useem, Jerry Useem and Paul Asel ly hire employes at entry levels, they I now see life as a series of choices (Crown Press). Visit www.jimcollins.com. also seek aptitude for future leadership. between going to failure or fallure. Individuals typically enter early devel- Like an on-sight attempt, the next ACTION: Monitor your success rate. opment programs offering rotational 4 Leadership Excellence work experience and education. and limitations of individuals. They ture. Not all rocket jobs offer vertical However, not all professional hires have tested these individuals in a progression—often they provide later- are entry-level. “Gap experts” are also range of situations, and know what al or “diagonal” career movement. sought to add critical capability or to developmental roles make sense. Their Career paths combines steep vertical jump start a new function or business. emphasis on talent development and moves with periodic lateral or diago- For example, GE hired six sigma retention provides bench strength that nal assignments. experts, and Exxon recruited senior mediates risk. By maintaining strong 8. They take a hard look at talent at experts in OD. These senior hires expertise on teams, they can move tal- multiple points or career stages. The often find it difficult to feel like a full ented individuals outside their exper- first hard look follows completion of member of the “club.” Unlike col- tise and develop them in new areas. the early development program or leagues who share a common history 6. They have a different career con- internship. The two basic questions and values, gap experts are inserted at tract. Branded developers encourage are: “Have they established credibility a higher level. However, lacking a greater movement because they see and a reputation for getting things strong internal network, many report careers differently. They see work done?” and “Do they live the compa- difficulty in getting things done. assignments as “stops” on a career ny’s values?” Those lacking the right Cultures are relatively intolerant of journey. Roles are to be put on and stuff are either let go or leave on their “outsiders.” As a result, the attrition taken off as people progress. In turn, own. The second point, after a few rate for gap experts is greater. their employees willingly accept regu- years, is whether they show evidence 3. They have well-developed career lar assignment and location changes of business or technical leadership. architectures. Branded developers are because their personal risk is reduced. Individuals who don’t distinguish career architects and engineers. They They believe the company has in mind themselves may not be pushed out, are clear about the relationship their best interests and organizational but they are likely to leave or move between high performance and career into a new role or function. By con- progress. Their career paths are fairly trast, employees with perceived lead- simple. For example, at McKinsey, the ership aptitude and interest are consulting career path consists of five usually invited to take a supervisory progressive roles: associate, engage- role. The third hard look is whether ment manager, associate principal, the person has or can develop the partner, and director. Many organiza- capability to play a strategic leader- tions have career paths. What differ- ship role. They leapfrog colleagues entiates branded developers is the and move through progressively more care with which they design them, challenging roles. They relocate more implement them, and use them as a often to gain broader perspective and means to develop their people. to be seen and evaluated. 4. They have a plan in mind. The 9. They engage in job sculpting. The essence of career planning in branded career philosophy of branded develop- developers is a focus on the future. ers creates far greater flexibility in role They tend to think two or three roles needs. They have confidence that and organization design. Because they ahead in planning the careers of top movement is sensible, not capricious. are focused on both capability accelera- talent. They create a multi-tiered And, they count on the basic employ- tion and business performance, roles process of talent review and develop- ment contract: that the “get” for “giv- are often “sculpted” to the individual. ment planning and create a meaningful ing” career movement is continued Roles are custom-designed to assess development path through the right set development and some measure of how well the person leads. This is a of experiences. For example, at Exxon security so long as they perform well. mixed blessing. On one hand, it creates Mobil, succession planning is linked For example, Exxon Mobil informally powerful developmental opportunity. through a lattice of talent committees; operates according to the one-in-four On the other, it often creates volatility. the profiles of high-potential individu- rule: “You can say no to one career 10. They preserve the elements of als float up, and the next moves of move in four that’s offered you.” branded development. Building a brand high-potential managers are discussed 7. They continually test people. for development is hard won but easily by the senior executive team. Branded developers continually test a lost. The forces of competition, new 5. They give more people more person’s potential. In fact, potential is technology, consolidation, and transfor- opportunity. As a result of their the measure of how people perform in mation create a high hurdle. So, brand- knowledge of their talent, branded test roles. Employees at PepsiCo ed developers tend to be firms that developers provide more opportunity describe career management in that depend on technical excellence, where to more people. Although job-posting company as career pinball: “winners decisions have long-term horizons and systems are typical, at professional get to play again.” leaders can’t easily be imported. They and leadership levels, high-perform- Branded developers often use rocket also have confidence in their culture ing people in one line division might jobs to assess high-potential people, and way of working. Many companies be “invited” to take on a different role prepare them for greater responsibility, aspire to become branded developers in another division. Or, a line manager and propel advancement. We find four since they must find a path to attract may be asked to take a rotation into a types of rocket jobs: 1) business or and retain quality employees. LE support function such as HR. functional leadership, 2) project and Their emphasis on performance new business initiatives, 3) turn- Jon Younger, Norm Smallwood, and Dave Ulrich are principals of The RBL Group. Email [email protected], call 973-467-6710 management and assessment of arounds of a struggling market or unit, or 801-373-4238, or visit www.rbl.net. potential provides managers with and 4) relationship or team building greater visibility into the strengths across businesses, geography, and cul- ACTION: Become a branded people developer. Leadership Excellence 5

LEADERSHIP LAWYERS of critical business issues that drive or influence the business. It’s a front-row seat on the CEO role and an extraordi- nary training ground for the top job. The challenge of CEO leadership, Lawyer CEOs says LandAmerica Financial Group Law is a path to the top. CEO Theodore L. Chandler, Jr., who comes from the business lawyer ranks, is like whitewater rafting. “To compete by Kathryn Griffin tively protect shareholder interests, and and excel,” he says, “you need the best manage in times of crisis, can quickly people in the raft with you, including a damage a company’s brand and reputa- General Counsel with a multidiscipli- HE SEARCH FOR LEAD- tion, affect the bottom line, and determine nary view of the company.” ership talent has the success or failure of the organization. Alfred Mockett, CEO of Austin-based Tsimilar stakes and risks As leadership becomes more complex, Motive, a leading provider of manage- as a top business opportunity. the skills and perspectives that top ment automation software, recalls that In today’s risk-conscious business business lawyers bring to strategy and the task of searching for a new General environment, the governance reforms leadership is becoming highly valued.” Counsel for his former company, driven by Sarbanes-Oxley have fused Citigroup, BET, General Dynamics American Management Systems, was the connective tissue and interests of and Pfizer, to name just a few, are now like “looking for a shadow CEO.” C-Suite leaders. Now, the CEO, led by CEOs who once served and The corporate General Counsel now General Counsel, CFO, CIO, COO, built their impressive business creden- plays into the CEO succession plan like and Chief Risk Officer must overcome tials either in the corporate General never before. Companies have begun to traditional gaps in each function and Counsel role or as a business lawyer. realize that the person they recruit into work collaboratively and transparent- General Counsel Becomes Key Advisor the General Counsel role must be some- ly to assess and mitigate legal and one capable of one day assuming the operational risks to the enterprise. One key leadership measure for CEO role. If the General Counsel is per- The General Counsel role has been CEOs, is the degree to which they ceived to be a strategic business thinker magnified as companies insert risk- either have engaged their top corporate and savvy leader, that’s going to buy mitigation practices into their product, lawyer in strategic business discussions the organization good support from service, technology, and regulatory and decision-making, or left him or her Wall Street analysts, investors, the mar- touch-points with consumers, ketplace, and employees alike. employees, shareholders, analysts, On the Path to CEO and regulators. This shift is forcing leaders to understand the increased I expect to see more top corporate influence of the General Counsel, and lawyers make the move to CEO. The why other senior leaders’ ability to marketplace is forcing CEOs to think work with the top corporate lawyer is more like lawyers, and lawyers to becoming a measure of their potential. think more like business leaders with a The mounting legal demands and broader view of the organization, its external pressures on leaders today are market, competitors, and people. moving more organizations to pro- This could go down as the decade mote or recruit business lawyers to the when the corporate lawyer is the top CEO post. Risk is redrawing the lines candidate for the CEO suite. The cur- of corporate management structure. rent shape of a successful CEO’s skills Legal issues—ranging from product align well with the skill-sets of a busi- liability and regulatory compliance to ness lawyer: strategic thinker, quick patent infringement, discrimination out of the leadership loop, as was com- study, cool under fire, bias for action, and stock options backdating—threat- mon until recent years when scandal critical thinker, grasp of Sarbanes-Oxley, en to erode shareholder confidence and governance reform changed the and the communications veteran. and market share. The unprecedented prevailing wisdom. When it comes to recruiting top decline in shareholder trust—given the Today, most CEOs would not run business lawyers, it’s no longer just, headlines and mounting concern the risk of managing tough business “We need a General Counsel, and let’s about corporate scandals and ongoing challenges in circumstances where fill that role.” The CEO and Board now government investigations—has there is an arm’s length relationship look to the General Counsel to be their caused CEOs and Board Directors to with their General Counsel. And there legal counsel, trusted strategic advisor, look for leadership solutions within are few, if any, corporate executives and possible next CEO; and so the the ranks of top business lawyers. equipped to offer advice on how to demands of the job and the search for Today’s environment makes the navigate choppy business or potential- the best legal talent will intensify in business of recruiting a General ly murky legal waters better than a identifying, assessing, and choosing Counsel, or a Chief Legal Officer, General Counsel who can work effec- the right candidate. LE more consequential to the future of tively at the right hand of the CEO. Kathryn Griffin is a managing director at Slayton Search corporate leadership and the fulfill- The best corporate Generals Partners, and one of the nation’s leading recruiters of legal and business executives. Call 202-293-8030 ext 201 or email kgrif- ment of shareholder expectations. Counsel are so closely tied to the work [email protected]. The failure to anticipate and manage of the CEO that they’re capturing an a company’s legal exposure, or to effec- unparalleled view and understanding ACTION: Consider your next CEO. 6 Leadership Excellence PERFORMANCE PURPOSE ideas that fit easily under a heading off “mission, vision, and values.” We need a larger container to accommodate such magnificent ideas. We need a dream. So we ask our clients to believe in the dream, to assume that the dream is BoldThese unite Dreams people. realizable, and to imagine that when their energies are harnessed behind that dream, it will be achieved. An by Lance Secretan phrase “I have a dream” eight times. His organization with 10,000 employees ability to articulate his dream united and and a dream, that harnesses this total inspired millions of people to usher in a energy—the passion of every employ- VER THE LAST 50 new era in civil rights. Dreams have the ee—behind that dream, stands a great years, we’ve power to change the world. chance of achieving it! Obecome experts in To understand how leadership can Plate Spinners quantification, measurement, and transform organizations, communities, analysis. We have metrics for every- countries, or the world, we must under- How do leaders help to create and thing. But many leaders have lost stand and harness the power of the dream. realize a dream? Think about those their capacity to dream. Instead, they Since 1996, I’ve worked with leaders plate-spinning circus performers who create mission, vision, and values worldwide by sharing a philosophy we balance plates on the ends of sticks. statements. Compared to the inspiring call Higher Ground Leadership, the goal Typically, after the spinners get seven or power of a dream, a mission state- being to change the world by reawak- eight plates going, the first plate starts ment feels stale and barren. ening spirit and values in both profes- to wobble, and they have to race back to A dream is the unifying experience re-spin it. They repeat the process to that all winning teams, great endeav- keep all the plates from falling. ors, and extraordinary achievements I think of a leadership team as plate have in common. A dream is the spinners. The plates represent the unique shared characteristic among inspiration of others, and the team’s people who achieve the extraordi- role is to keep the inspiration going. A nary—creating revolutions, overthrow- plate drops when we do anything that ing despots, founding nations, sucks the passion from the dream. The climbing Everest, reinventing organiza- top team’s role is to never do anything— tions, making breakthroughs, or chang- I repeat, to never do anything—that is ing the way we live or think. Each of uninspiring or demoralizing to the these is initially powered and then sus- people who are united in their efforts tained by the passion of a dream. to achieve the dream. I’m not talking about a six sigma And the team directly responsible program or 5 percent improvement in for leading those who are realizing the employee satisfaction—but a bold, sional and personal lives. We’ve dream must be fully inspired, too—all daring, impudent, audacious, outra- achieved some amazing results. Yet for of the time—inspired to live their lives geous, thrilling, inspiring dream. years, we focused on the processes in a way that inspires others. All of the Dream Power rather than outcomes with our clients— time. No dropped plates. in other words, the means rather than The leader’s purpose is to inspire How did we land a man on the the dream. Although we were realizing everyone, every day, all the time, in moon? Jack Kennedy had a dream dreams through the application of every way, in every communication and that millions embraced, making it processes, it occurred to us that we action—so that every action, feeling, and their own and making it real. Indeed, could be more effective if we first iden- relationship moves people closer to real- the dream was so powerful that it tified the dream and then designed the izing the dream. The first act that demor- restored America’s self-esteem after processes to realize that dream. alizes someone who’s trying to realize a the launch of Sputnik, galvanized the So, we now invite leaders to dream will break the spell, trash the pas- nation, and inspired the rest of the describe their dreams, identifying their sion, and waste the opportunity. world. Dreams transcend differences, most extraordinary, never-before- When we think about what’s possi- disagreements, and petty arguments achieved aspirations. We ask them to ble, even if never attained before, iden- and engage us in a higher purpose, be fearless and imaginative, to be out- tify it as a dream that we hold dear, uniting us as one. It is this elusive rageous and extraordinarily creative. and then commit to aligning the entire oneness for which we all yearn. They come up with some remark- team or organization behind every- Dreams are almost unique in their able ideas—hospitals that eliminate all thing necessary to achieve that power to achieve oneness. avoidable deaths, banks that increase dream—the dream becomes possible. Great historical leaders—Christ, market share by 10 percent in one year, Martin Luther King, Jr., showed us Buddha, Lao-Tzu, Confucius, Moham- corporations that become environmen- how. So did Jack Kennedy. So can you. LE med, Nelson Mandela, Mother Teresa, tally friendly, communities that grow Lance Secretan is founder of The Secretan Center, a consulting and Martin Luther King, Jr., among into world-class centers of excellence practice specializing in cultural and leadership transformation to achieve extraordinary performance. His new book is One: The Art them-—all knew how impactful a and innovation, States that reinvent and Practice of Conscious Leadership. E-mail: dream can be. In his famous 1963 their education system and rethink the [email protected]. speech at the Lincoln Memorial in role of prison inmates, organizations Washington, DC, King repeated the that change the world. These are not ACTION: Share a bold dream. Leadership Excellence 7 PEOPLE RETENTION formance from leaders. 2. Seek diversity and value inclusive- ness. By the year 2050, there will be no ethnic majority in the U.S. At this moment, there is no ethnic majority in TheInnovate Race to gain for talent-share. Talent California public schools. Only 15 years from now, minorities will make up one- third of the American workforce. by Brian C. Walker vacant positions—and 40 percent of For us to have the talent we need to workers are seeking a new job. The com- compete effectively with the best glob- petition for talent is accelerating. al companies, we must create an inclu- CHIEVING AND CAPI- In the U.S., the retirement or semi- sive community in West Michigan, talizing on inno- retirement of the Baby Boomers, com- where most of our employees live, but Avation rests squarely bined with the booming economies in also at our sites worldwide. Our chal- on people. Technology doesn’t inno- Asia, are squeezing the supply of tal- lenge is daunting, due to the largely vate. Venture capital doesn’t innovate. ented people. Talented foreign stu- homogenous area in which our busi- People do. To attract the best and dents no longer automatically stay in ness is headquartered; but most com- brightest people, leaders need to pur- the U.S. to find jobs. In fact, 80 percent panies face similar issues to some sue three cultural aspirations—perfor- of the Chinese students now studying degree or another. mance, inclusiveness, and purpose. in the U.S. say they will return to Why is inclusiveness so important? At Herman Miller, we have a per- China after graduating. Differences lead to innovation. The spective on those three goals—a per- These data points tell me that we friction of different points of view pro- spective that continues to evolve after had better make our organizations wel- duces new products, new ideas, new 75 years. We became connected with coming and motivating places. approaches. People want to work for innovation, and the design talent that Formula for Keeping Talent and buy their goods from organiza- sparked it, in 1930 with the help of tions that reflect themselves. And, the Gilbert Rohde, an early proponent of So how do we attract and keep talent- bigger the talent pool, the more likely modern American design. ed people? Beyond good salaries, inter- you are to get the best people. Our connections to talented design- 3. Pursue a larger sense of purpose. ers—Rohde, Charles Eames, George People are looking for more than just a Nelson, Isamu Noguchi and others— paycheck: 96 percent of U.S. workers drove our growth through the 1950s prefer flexible work hours; 86 percent and 1960s. Such connections—to Doug of workers say that a balance between Ball, Ayse Birsel, Jeff Weber, Studio 7.5 work and life is among their career of Berlin, and Eric Chan—continue objectives; 73 percent of the people say today. Talent, both outside and inside that they would put their careers on Herman Miller, is the basis for our hold for their families. These statistics innovations in products, HR, IT, opera- point to a huge shift in priorities. tions—every part of the company. Herman Miller founder D.J. De Pree Talented People Produce Innovation once said, “A business is rightly judged by its product and service, but Most executives assert that innova- esting work, good work environments, it must also face scrutiny and judg- tion is among their top three priori- choices, and flexible schedules, there is ment as to its humanity.” This sentence ties. Innovation has become the Holy something more—what I call cultural is inscribed on our Main Site building. Grail. Most leaders want it, but don’t aspirations. At Herman Miller, our formu- Such inscriptions keep CEOs awake at know how to get it. In fact, two-thirds la looks like this: Performance + Inclu- night—and inspired to do the right admit to making poor progress. siveness + Purpose = Talented People. things for the right reasons. Innovation lies at the heart of our These three qualities create a culture that Building a sense of purpose into our ability to grow. Our future—and that will attract talent and keep it here. lives may be the most important factor of every organization—is in talented 1. Commit to high performance. The in our efforts to attract creative and and creative people. best organizations are driven by a cul- educated talent. A sense of purpose Malcolm Gladwell, author of The ture of performance. They have a clear might take many forms—protecting the Tipping Point, notes that innovation is picture of what high performance is, environment, reducing poverty or illit- the heart of the knowledge economy, they measure it, and they pay and pro- eracy, or improving education. We and it is profoundly social. Larry mote people based on it. In his book encourage people to get involved in Prusak, former head of IBM’s knowl- Thinking for a Living, Tom Davenport such projects. The best people want to edge group, believes that all work is says that nothing is more crucial to look and work outside themselves— social. People and their interactions pro- high performers than strong, diverse, and outside their organizations. duce innovations. Yet attracting talented and knowledgeable networks of per- To lead with innovation, you need the people and creating the social work set- sonal relationships. Winning organiza- best people. Getting them isn’t easy. But tings that make them stay and be pro- tions cultivate such networks. the payoff can be wonderful—even if the ductive is getting more competitive. Innovation and the expectation of art of leading them isn’t easy, either. LE Two years ago, the Bureau of Labor high performance must extend to all Brian C. Walker is CEO of Herman Miller. Visit www.herman Statistics predicted a labor shortfall in parts of the company. The demand for miller.com. 2010 of 10 million. Last year, half of high-performance leads to more high Manpower’s clients could not fill the performance. It also requires high per- ACTION: Attract and keep top talent. 8 Leadership Excellence LEADERSHIP RELATIONSHIPS among a series of plausible choices. This assessment more safely tests prob- lem-solving skills before the worker interacts with the actual customer or steps foot on the production floor. CertificationIt’s a retention strategy. The second type puts the responsi- bility on the supervisor to observe employees in customer or team inter- by Judith A. Hale relying on after-market partners, and actions and judge employees’ job out- growing through mergers are not mutu- puts whether it is a report, a physical ally exclusive as companies that have to product, or an analysis of data. This EADERS ARE EXPERI- interpret complex data also grow requires well-defined performance menting with new through acquisitions and rely on after- measures, standardized checklists, and Lways to develop and market partners. Whatever the driver, implementation protocols that assure retain capable people. They know that the goals are to protect brand image and fairness and validity. being competitive depends on their to retain or increase profit margins. At the same time organizations are people doing their jobs well, and yet Good certifications involve assess- building certifications, workers, too, are they are faced with the challenges of ments that accurately identify skill and earning credentials from vendors and replacing an aging workforce on the knowledge deficiencies to shorten the professional associations. In the computer brink of retirement with limited quali- time it takes to develop industry, manufacturers fied candidates, keeping sales and ser- people’s proficiency, mini- and vendors offer certifica- vice personnel current on increasingly mize the cost of training by tions that customers require sophisticated products and changing concentrating only on as part of the hiring criteria. regulations, and offsetting shrinking areas of need, and help Professional societies and margins due to lower-cost competitors. distinguish a company trade associations are also Two experimental solutions are out- from its competition. Even offering certifications. sourcing and certification. Leaders companies that rely on Many are based on tests outsource non-core functions to lower professional and industry of a common body of costs by reducing headcount, focusing certifications, such as required knowledge. on their strengths, and avoiding long- accounting and engineer- However, some are adopt- term financial commitments—such as ing, must implement their ing performance tests. One retirement benefits and healthcare own programs to assure example is a performance- costs; however, to work effectively, the workforce can use their and competency-based outsourcing requires higher skills and systems and processes and support credential—Certified Performance vendor and program management. It’s their product mix. Technologist (CPT)—offered by the not a good solution for jobs wherein Certifications require a more disci- International Society for Performance employees create and make use of the plined management system to be effec- Improvement (ISPI) for the learning and company’s product and market intelli- tive. For example, performance performance professional. This certifica- gence. For such hard-to-replace jobs, requires more than skills and knowl- tion relies on attestations by the practi- companies are looking to certification. edge. It requires accurate and timely tioner’s employer that the person’s work Who Is Certifying and Why? information, well-designed processes, was of value (performance) and an efficient systems, sufficient resources, assessment by trained reviewers of the Certification is being implemented and appropriate incentives. Without practitioners’ work description (compe- by organizations whose people: 1) use these elements, people’s ability and tency). The ISPI credential was developed and interpret complex data, such as incentive to do a job well is compro- in response to customers wanting to bet- electronic, scientific, financial, and mar- mised. The appreciation for all that is ter identify capable practitioners, and the ket data; or 2) sell, install, calibrate, and required for a worker to be effective is standards were developed by customers, service suites of products, or products one reason companies are rejecting the not by practitioners and academics. that have to interface or integrate with traditional model of certification and If your company is considering multi-generational-technologies. implementing a performance model. developing a certification, ask what the Companies that grow through The traditional model of certification company expects to be different as a mergers and acquisitions are also involves taking training and passing a test. result, what business problem it is trying using certification to cross-train the However, experience, training, and testing to solve, and how will success be deter- old and the newly acquired workers do not guarantee performance on-the-job. mined? Use this information to design quickly. The assessment is used to What companies need is a program that the credential and to measure its effec- accurately identify skill deficiencies so addresses barriers to performance as well tiveness. If the certification uses an people receive only the training they as measure how well people can do a assessment instrument or process, con- require. Other companies implement- task in the work setting. sider making that assessment as similar ing certification are manufacturers Performance-based Assessment to the work and work setting as possi- that depend on dealerships and dis- ble. Identify the people who rely on the tributors to sell and support their There are two types of performance- work being executed well and incorpo- products. These companies must help based assessments. The first is a simu- rate their expectations in the criteria. LE their distribution channels develop lation that uses scenarios or examples Judith Hale is director of certification for the International and assess workers’ abilities. of real data or product specifications. Society for Performance Improvement. She’s the author of . Email [email protected]. Analyzing complex data, integrating People are asked to analyze the infor- Performance-Based Certification legacy systems with new products, mation and select the best response ACTION: Develop a certification. Leadership Excellence 9 LEADERSHIP JUDGEMENT should proceed. But unlike umpires and referees, they cannot—without risking total failure—quickly forget them and move ahead to the next play. Rather, for a leader, the moment of making of the Sound Judgment call comes in the middle of a process. The essence of leadership. That process begins with the leader recognizing the need for a judgment the big issues that make a difference, is and continues through successful exe- usually an incremental process. cution. Leaders are said to have “good Quantum theory, the polio vaccine, judgment” when they repeatedly make Cubism, the Double Helix, the IPod— judgment calls that turn out well. And all these landmark breakthroughs in these calls often turn out well because business, science, engineering, and the they have mastered a complex process by Noel Tichy and Warren Bennis arts came about only after years of try- that unfolds in several dimensions. ing and “trialing,” of mistakes and • Time: We have identified three phas- missteps, of correcting, refining, and, es to the process: Pre—what happens HE LEADER’S MOST IMPORTANT ROLE is yes, trying again. Intuition helps, so before the leader makes the decision. making good judgment calls in does blinking, but it is rarely sufficient. The call—what the leader does as he or Tthree domains: key people, strategy, As the Talmud says, “Expect miracles, she makes the decision that helps it and crisis. Great leaders have a high but don’t count on them.” turn out to be the right one. Execution— percentage of good judgment calls; they So, having come face to face with what the leader must oversee to ensure are only good if the execution is success- our belief that good judgment is the the call produces the desired results. ful. The second most important role essential genome of good leadership, • Domain: The elements of the you play is to develop other leaders process, the attention that must be paid who can make good judgment calls. to each of them, and the time over We all make thousands of judg- which the judgment unfolds varies ment calls, some trivial and some with its subject matter. We have identi- monumental (whom to marry, what fied three critical domains in which career to pursue). The measure of most of the most important calls are your life success is the sum of all of required: 1) judgments about people; 2) these judgment calls—the good ones judgments about strategy, and 3) judg- and bad ones and the cumulative con- ments in time of crisis. sequence for the quality of life. The • Constituencies: A leader’s relation- importance of making good judgment ships provide the information and the calls is magnified many times when means for executing the call. A leader you take on a leadership role because must interact with these different con- of the impact on the lives of others. we have tackled it head on and come stituencies, consider their various inter- In your role as a leader, how can you up with a framework for understand- ests and manage those relationships to make better judgment calls—and help ing how good leaders go about mak- make successful calls. And to improve other leaders to do the same? ing good judgment calls. judgment-making in the firm, the leader Experience is very important in We don’t pretend to have all the must use these interactions to help oth- developing judgment. People who answers—or asked all of the possible ers learn to make successful calls. exercise good judgment draw on their questions—but we have watched hun- We have identified four types of own experiences for guidance, and dreds of leaders making thousands of knowledge needed to do this: self- good leaders expose others to a variety judgment calls. We have seen good knowledge—personal values and goals; of experiences for the specific purpose calls and bad ones. We have seen lead- social network knowledge—regarding of helping them develop their own ers make so-so initial calls and then those who surround you daily; organi- judgment. But there is a lot more to it manage and re-tune them mid-air to zational knowledge—people at all lev- than flying by the seat of your pants. produce brilliant results. And we have els; and contextual knowledge—the We often hear, and sometimes even seen leaders make spot-on, inspired myriad other stakeholders (customers, think to ourselves, that judgment is decisions and then end up in the ditch suppliers, government, stockholders, largely about accessing intuition or because they didn’t follow through on competitors, and interest groups). having a gut feeling. Or you “blink” execution, or they looked away and We offer this framework to help you and have a wondrous epiphany. missed a critical context change. We improve your judgment-making facul- These statements of non-rational have learned, a lot. And by putting our ties, to do a better job of developing “thinking” certainly do feel true, and it brains—and experiences together—we good judgment in others, and to might be that in a sense they are true. have come up with our framework. encourage a more vigorous conversa- There is the moment, as GE CEO, Jeff The Framework tion about judgment. We need more Immelt, puts it, when “Boom, I decide.” leaders with better judgment. LE But to the extent that it’s true, it is a Despite the implications of the word Noel Tichy and Warren Bennis are coauthors of the forthcoming short-hand description for a complex call, the judgment calls that leaders make book: Judgment: The Essence of Leadership, from which this article is adapted with permission. Visit www.noeltichy.com. web of other thoughts and activity. can’t be viewed as single, point-in-time Warren Bennis is a distinguished professor of business admin- Good judgment is not one terrific events. Like umpires and referees, leaders istration at USC and an advisor to Harvard Business School “aha” moment after another. In the do, at some moment, make a call. They and others.Visit [email protected]. real-world, good judgment, at least on make a determination about how things ACTION: Cultivate better judgement. 10 Leadership Excellence MANAGEMENT SYSTEM ownership, passion, creativity, produc- tivity, morale, and commitment—not value-stream management. Three Steps Lean Thinking Changing the system requires chang- See and manage your firm as a system. ing roles and measures in three steps: Step 1 is when teams of staff mem- by Rob Lebow ideas; respectful of people, and friend- bers, with help from internal experts, ly to a different view of work as a sys- focus on their processes, and see them tem—not a series of isolated activities as part of a larger system. The results EAN THINKING CAN BE with imposed job descriptions, hierar- will be positive: customers will be applied by anyone chy, and quarter-to-quarter thinking. served, and commitment, creativity Lanywhere, but its full This is replaced by long-range vision- and enthusiasm will be high; but if power is only realized when it is ing; true customer service—placing the these staff members and experts focus applied to all elements of the enter- customer at the center of each transac- on their numbers— which are often prise and when work is viewed as a tion; sharing values that build trust, arbitrary to begin with (yet their pay, whole system. All enterprises should transparency, and ethical behavior; promotional opportunities and career are be seen and managed as a system, and responding to work-related prob- judged by them), the process likely and this change in thinking can’t be lems as an act of variation with no one won’t improve; and that’s when the made simply by designing tools. to blame or chastise. cheating, falsifications, political rival- Lean tools are all natural expres- During this transformation from iso- ries, manipulations and blame-games sions of how to solve or fix problems. lated problem-solving to viewing work begin, with customers and productivi- But, tools often create unexpected or ty being the losers! unintended results. Most leaders who Step 2 is to remove performance mea- use lean thinking hope for a transfor- sures that undermine performance, mation from their manufacturing or and replace them with measures that services culture to a lean organization help you improve the work within a where everything goes on schedule. process. Leaders and staff members Sadly, applying the tools doesn’t often alike have to un-learn old thinking about transform or change time-honored sys- measurement and work with measures tems at the core, but applying the right that are more valid and useful in tools get managers closer to the heart understanding how their work works! of the solution—a new way of think- Measures that focus on variation ing about work at the design level. and not on an obsession with trying to The Overuse of Tools standardize everything are the key to this new way of thinking about work, Tools are often overused because performance, and productivity. they can be applied in isolation with- as a system, the traditional hierarchy is at The mentality that believes that out tackling the difficult tasks of risk. Ultimately, what is at risk is the “tools can solve our problems” is replaced changing the management approach very concept of control. At the heart of with “we’ll use tools to understand our or philosophy. Upsetting manage- this transformation is the notion of work and improve our approach to varia- ment—the very hand that feeds them—is who should own the work; how we tion and stop blaming workers for this the last thing that “tool merchants” value work and view it; and what the variation.” Variation isn’t removed by want to do. Implementing tools also design of the work should look like. standardization practices using poli- demonstrates activity and forthright Who should decide these issues? If cies, procedures and quota systems; it’s leadership, and often wards off criti- management decides, people will sim- addressed by studying the predictabili- cism of doing nothing to fix problems. ply go through ghost-like exercises ty of variation and getting everyone Sadly, tools won’t change a system. and fail to enjoy any lasting or mean- involved in improving our systems by Tools help only when the context of ingful transformation. And, employees understanding the systemic causes. their use is in concert with first taking will be frustrated; stakeholders and Step 3 entails a new way to look at a different view of the work. Tools can directors disappointed, and valuable budgeting. If you forget about the and should be used to manifest prob- time and resources wasted. “money,” any transformation will be lems people can only solve by viewing It is incredibly powerful to manage flawed! Budgets are a reality. Re-think- the work as the system—not ignoring services end-to-end, removing func- ing the way we conduct budgeting from tools, but not over-relying on them. tional hierarchical designs, replacing the developmental, methodological and We shouldn’t teach tools as the final them with system designs that engage final completion cycles is a key in sus- answer to solving or fixing problems. people, root-out corruption and crony- taining a transformation. If the budget It is the different view—the way you ism, and enable people to measure remains a sacred cow, the Management conceptualize the problems—that counts. their own performance, respond to Factory will remain intact, and nothing The key to transformation is develop- variation in production, and ask “off- will change except for one thing—waste ing a method for helping everyone team” members who choose neither to in the system will continue to grow. LE take a different view of their work. be responsible nor accountable for Rob Lebow is chairman of LCI, a change management training This is how values-based transfor- their actions, choices, or behaviors. and culture research firm. Visit www.lebowco.com. mation works. It promotes a cultural Frontline ownership is possible in change that becomes open to new every transaction. This is what creates ACTION: Improve your systems. Leadership Excellence 11 PERFORMANCE COMMITMENT tant personal matter. So my boss and I went to the meeting, and I made the presentation. The COO asked three questions that I knew the answers to, we were done in 15 minutes, and he It drives high performance. gave us approval to take the strike. Commitment My pension expert, meanwhile, was a little shocked at my decision. But, because I put my body on the tracks by Michael Feiner tell my boss, who knew I’m no pension for him, he saw that I cared about him whiz—should I grant the request? and what was important to him. Of Leaders have to decide when to cut course, he knew how ambitious I was LL SUCCESSFUL LEAD- employees slack and when the organi- and how concerned I was about my ers I’ve known zation must come first. They are faced performance. But he saw that he was- Abecame successful with special requests from employees n’t just another factor of production in because of commitment to their own involving sick children, spouses, or my career dreams. He realized I was success. Corporate life is demanding, parents; or school recitals, doctor’s prepared to make a sacrifice for him. and it takes an intense achievement appointments, college visits, soccer He worked with me for another 11 orientation. Executives must be pas- games, athletic events, extra vacation years, and was incredibly loyal and sionate about being outstanding per- time, or long weekends. Some of these committed to me, to my success, and formers, meeting or beating their seem weighty and to our team performance. targets, and driving performance. important; others The Law of Personal Commitment Perhaps commitment to one’s success can seem means that you must be committed to is a just another way to describe ambi- triv- your subordinates’ careers as well as tion. But I use the word commitment for ial. to your own and that to get loyalty, a reason. This story explains why. you must give loyalty. This commit- I had been vice president and chief ment occurs in small ways—like get- people officer for Pepsi’s $3 billion U.S. ting back to a person when you business for less than a year. There was promised, making sure performance a possibility of a work stoppage in our appraisals are done on time, process- most profitable market, since we ing the salary increase when it’s due, desired to convert our employees from being available to answer questions— a Teamsters Union pension plan to a and in big ways, like teaching and company plan that would be less coaching regularly. expensive for Pepsi to fund. We Leaders, then, must be committed to believed our employees were getting a a subordinate’s growth, development, raw deal, since too much of Pepsi’s and success as much as they are com- monthly contribution to the Teamster mitted to their own fame and fortune. I plan was covering excessive adminis- Conventional wisdom once had a boss who would go through trative costs, not employee benefits. would suggest I simply tell him that his mail during our meetings. Think The trick was convincing our employ- trick-or-treating, while important to about the signal this sent to me. He had ees that our company plan would be him, is insignificant given the impor- no interest in me as a person, only in better for them. But first my boss and I tance this meeting. I wasn’t afraid to my productivity, and whether or not I had to convince PepsiCo’s COO that tell him that he had to attend. At Pepsi was meeting his objectives. If a leader our intentions were worth the risk of a I was considered a demanding boss cares about his or her people, commits long strike in a city that was a bastion with high performance standards. But daily to their growth, and conveys that of Teamster support. that’s not what I decided to do. commitment, they will give 120 percent. Because I was no expert on pension Instead, I decided to give him a pass That’s what my pension expert did for plan funding, I was bringing my ben- because I had come to understand the me, after I took a risk for him. efits guru to the meeting. When he Law of Personal Commitment. It states Great leaders are committed not informed me the day before the meet- that if a leader wants a subordinate to be only to their own success but also to ing that he was unable to accompany committed to the success of the leader and the success of their people. There’s no me, I was shocked. He had a personal the leader’s organization, then the leader faking this commitment. People know commitment—he needed to take his must be committed to the subordinate—to if their boss is genuinely committed. young kids trick-or-treating! his or her growth and development, And there’s also no outside protocol I was angry at my pension expert for and to what’s important to him or her that a leader can follow to acquire this not telling me sooner. But my immedi- both inside and outside the office. commitment. However, when a leader ate concern was to figure out what to I told him I thought he was carrying establishes some share of mind for the do. Should I tell him, “I’m sorry, but this trick-or-treat thing to extremes. But success and concerns and needs of his I’m not willing to give you a pass on I recognized this time with his kids or her people, you’ll likely find a high- the meeting?” He was a talented man- was important to him. So I asked him performing organization. LE ager, and I didn’t want to alienate to bring me up to speed and teach me Michael Feiner is a professor of management and Sanford C. him—and his family! Yet the next day’s everything he could about this pension Bernstein & Co. Ethics Fellow at Columbia Graduate School of Business. He is the author of The Feiner Points of Leadership meeting was a big deal—to me and my stuff. And I covered for my manager, (Warner Books). Visit www.feinerpoints.com. career and to the business, given the telling my boss that he couldn’t make money involved. And what should I the meeting because he had an impor- ACTION: Show your commitment. 12 Leadership Excellence MANAGEMENT EXECUTION Execution

The Good: Hewlett-Packard. CEO Mark Hurd said that whether or not acquiring Compaq was a good idea is now irrelevant: what’s done is done, FiveReflect on Lessons the past year. and his job now is to find a way to make it work. He reorganized the com- pany into three divisions, with each division having its own sales force, by Richard Lepsinger cause serious, even irreparable, harm. making the heads of the divisions Employee Engagement responsible for sales. He also reorga- EADERS OF EVERY nized the IT function. Instead of having stripe are reflecting The Good: Google. Their leaders find 85 data centers, he centralized them Lon the past year. What ways to ensure that everyone has a into three. So, he decentralized the sales went right? What went voice. One way they keep their ears force and centralized the IT function— wrong? Did we make progress toward open to grassroots ideas is a policy that the opposite of the way the company our goals? Did our business grow? allows engineers to spend at least one was organized—to better align struc- Did profits increase? Did the quality day a week working on their own pet ture with strategy. Operating profit of our products and services improve? projects. The company also uses smaller increased by 31 percent during 2006. Did our leaders truly lead? Were our teams to develop new concepts—some- The Good: Motorola. Another exam- people motivated and engaged? If the times assigning only three or four peo- ple of great execution, Motorola coordi- annual soul-searching has you feeling ple to a team. In contrast, Microsoft nated decisions and actions across work overwhelmed, learn from others. tends to have many large teams work- units. While developing new mobile Many major companies experi- ing on the same project. The lack of phones, the company assembled teams enced dramatic failures and successes. that included members of each major Their mistakes can be instructive, and department—design, engineering, mar- their victories inspiring. keting, and finance. Thus, they avoided Innovation and Change false starts, delays, and cost overruns because all the key players were in- The Good: Procter & Gamble. P&G volved from day one. These teams made 2006 a year to remember by enable Motorola to see what con- doing well in all areas of execution. The sumers want from various perspectives. company had a clear, unifying vision The Bad: Ford Motor Company. In and strategy, coordinated its efforts 2006 Ford struggled to execute, allow- globally, focused on customers, and ing departments to clash with one shared ideas to reach new customers another. Ford did a terrible job execut- and keep current ones. CEO Alan G. ing on its strategies. For example, the Lafley emphasized that the customer is company decided to update the Ford king, and employees focused on devel- communication and coordination Focus. The North American operation oping products that they knew P&G’s among teams leads to problems. Google and the European operation each customers would like. avoids such problems by using small developed a new version. The two The Bad: Dell. Companies can get teams whose members have more own- groups couldn’t agree, so they each stuck in a rut. After developing “the ership and accountability and can easily did what they wanted to do. As a Dell Way,” Dell became reluctant to communicate and execute their ideas. result, Ford couldn’t share parts or change. The company once attracted The Bad: National Basketball take advantage of economies of scale. customers to its website with low-cost Association (NBA). The NBA intro- The Lesson: Executing well is every- offers that required the buyer to make duced a new basketball but forgot to thing. It doesn’t matter how great your additions in order to have the best involve the players in the decision! strategy or how brilliant your vision if computer, which meant the price Asking the players would have you can’t bring it to fruition. Execution would be more than the original low- increased the quality of the ball and is the real bottom line—and it’s what cost offer. Now, consumers don’t have the acceptance of the decision. As a you need to focus on as you seek to to go to Dell to get a “custom-made” result, the players refused to use the improve performance. Companies that computer. When Dell realized they new ball, and the NBA had to scrap execute well: 1) coordinate actions and were losing business to competitors, the new ball and go back to old one. decisions across work units and levels, they fell back on an old practice: they The Lesson: Involve people whose 2) have structure and systems that cut costs to maintain market share. support you need in decisions that support the strategy, 3) involve One place that suffered was customer affect them. Employees shouldn’t feel employees in decision-making, and 4) service, once one of their strengths. they exist only to help the company manage change effectively. Post these The Lesson: To run a successful busi- make profits. They should be involved four factors on your wall, and let them ness, you need to create and implement in all critical decisions that affect them drive every decision. One year from innovative strategies and adjust to and freely share their thoughts and now, you’ll be glad you did. LE changes in the market. You have to be concerns. This gives them a sense of Richard Lepsinger is president of OnPoint Consulting and co- flexible. Embracing the spirit of inno- ownership. Involvement and engage- author of Flexible Leadership (Jossey-Bass/Wiley). Call 828-267- vation and change can help you reach ment should be built into a culture. 6826 or visit onpointconsultingllc.com. new levels of success, while being Great ideas must not be merely wel- rigid and unwilling to change can comed; they must be solicited. ACTION: Learn lessons from others. Leadership Excellence 13 LEADERSHIP DEVELOPMENT Consider this example. At age 29, Richard Rosenblatt sold IMall to ExciteAtHome for $565 million and then was recruited by Intermix Media to turnaround the company which in Creating Leader 2.0 just two years resulted in a sell of What is the future of leadership? MySpace for over $580 million. Several large companies line up for his prod- by André Martin the difference across departments, orga- ucts, yet few ask, “How does he do it?” nizations, and regions. One might argue that this is the HIS IS THE BEGIN- Today’s leaders need to find the curse of the positively disobedient— Tning.” “The world is ground truth—the idea that we must we forgive (ignore) the process to reap flat.” “We are at a tip- reshape tried-and-true solutions and the benefits. However, what would ping point.” “We must reset our rule products to fit a new time, place, and happen if someone offered to simply sets.” “The keys to the kingdom are customer. As we move beyond our shadow Richard for six months for a changing hands.” “All we have is the next borders, we must seek to understand small fee? Would this bring a higher 24 hours.” the new markets and environments. ROI in the long term than the price of No matter whose words we Edgar Bronfman, CEO of Warner a single product he has launched? use—Mau, Friedman, Gladwell, Music, puts this idea into practice by Organizations should begin taking a Barnett, Pink, or Enriquez—it is clear holding “employee roundtables” where closer look at these (positive disobedient) that our world is undergoing a shift. 12 to 20 junior employees are given the leaders—exploring their successes in a As a new age of uncertainty and rapid time and space to talk, create, and pro- systematic way. Now is the time to pull change emerges, new leadership skills vide a perspective that these individuals from the will be needed to stay competitive. can be lost to leaders. fringe and make them The Center for Creative Leader- Now people gripe less (and their approaches) ship surveyed 600 managers world- than they offer solutions, exemplars. wide to explore the current state and and Bronfman gets the • Upend the world of future hopes of leaders. These leaders context he and other lead- interruption by develop- believe the definition of effective lead- ers need to create an envi- ing leaders in context. ership has changed. So, how will lead- ronment of high per- How do we find time to ership be different in the future? And, formance. develop leaders given what is driving the shift? • Become an architect of the complexity and pace • Future leadership approaches will innovation and collabo- of work? We live in a focus on collaboration over heroics. ration. How can you state of continuous par- Collaborative skills such as building design systems and tial attention. It is nearly and mending relationships, participa- structures to cultivate impossible to find the tive management, and change man- new leadership time to complete our agement are increasingly important. approaches? An optimal reward sys- day-to-day tasks, let alone the space to • Approaches to leadership will differ tem would include a balance of indi- develop ourselves in hopes of keeping from region to region as the nature of vidual performance and collaboration, a competitive edge. the challenges facing leaders changes. innovation, and long-term thinking. To compete in the future, we will The challenges today are more com- Google is a great example of this need to meld actual work with develop- plex, have greater strategic impact, go approach. Marissa Mayer, the Director ment. One strategy is to create leadership beyond individual leadership capabil- of Consumer Web Products, is build- development experiences that utilize ity, require working across bound- ing a culture of innovation and collab- action learning as the central content; aries, and render tried-and-true oration by providing “office hours” where personal insights can be gleaned solutions ineffective. where any employee can pitch new in the context of real work, thereby • Changes in the business context also (and often big) ideas. avoiding major productivity loss. drive the need for collaboration. These • Create an “idea listserve” where Oganizations like the Army are trends include: rapidly shifting compe- anyone can suggest or comment on reaping enormous returns from an tition bases, globalization, competing speculative ideas. action-learning approach. Army com- stakeholder demands, a drive for inno- • Remain fearless and launch products manders are engaged in an ongoing vation, unstable mergers and acquisi- early and often. conversation about how to build and tions, and a need for reinvention. • Stay in touch with the ranks of lead combat teams. They have the abil- What can you do to prepare for a employees no mater how large the ity to share in real time and learn from more complex and collaborative number swells. real challenges and experience. future? Here are some ideas: • Study the collaborative tools of The job of the leader is to create • Understand how to lead by uncover- your own “positive disobedient”. space for other people to generate new ing the “ground truth.” How can you be Which of your leaders breaks the rules, ideas; to encourage meaningful con- agile enough to lead in any context? remains effective in ever-changing versation; and to assist people in Organizations in Europe and Asia- environments, and gets results? There becoming more effective, agile, and Pacific expect to have fewer boundaries are leaders who have been honing the prepared for complex challenges. LE and a greater reliance on leadership skills of collaboration, innovation, and Dr. André Martin is a senior researcher, writer, and trainer for the approaches focusing on emergent strat- relationship-building for decades. Center for Creative Leadership. Email [email protected]. egy and interdependent decision-mak- These leaders live beyond the norms ing. Thus, leaders need to be aware of but still manage to succeed. ACTION: Develop your future leaders. 14 Leadership Excellence LEADERSHIP DEVELOPMENT • Get rid of disengaged subversives (usually 8 percent of the workforce). These employees may not have started out so alienated; bad practices or poor leadership may have pushed them over FourBuild bonds Priorities with stakeholders. the edge. They undermine productivity by dragging everyone down around them. They’re a threat to the bottom line. by Christopher Rice short-term financial gain at the expense • Provide meaning. It’s up to leaders of productivity and engagement. They to help their people find meaning at also measure pride, a prerequisite to work. That meaning can take the form EADERSHIP ISN’T GET- retention and high performance. of personal connection with ambitious ting any easier. The Leaders need to scrutinize the company goals or achievement of more personal Lmarket’s obsession for they keep and do business with entities career aspirations. Leaders need to quarterly earnings stymies even the aligned with their values. articulate goals, paint a compelling best strategists. Customers and high- • Pay attention to behavior not rules. vision of the future, and help employ- performing employees have more A culture that operates with ethical ees to connect the dots. choices. Extreme transparency has intent at every level is created by lead- • Make sure you are engaged. Disen- replaced closed-door inner workings. ers who model desired behaviors, not gaged leaders lack the clarity of pur- No wonder CEOs feel like they have a by employees who follow policy. pose or energy to engage others. big bull’s-eye on their backs. Paperwork that satisfies the scrutiny of Executives must be clear on the strategy Leadership requires a balance regulators won’t inspire the contribu- and their top three priorities before they between business competence and tion you need from every employee. can align everyone else. And if they personal connection. It’s no longer Encourage people to do the right can’t articulate why they show up at enough for leaders to be capable. thing, even when no one is looking. work, they need to stop “doing” and They must also build authentic bonds think about what matters most to them. with employees, customers, and other 4. Make talent management a busi- stakeholders—a daunting challenge. ness priority. Leaders need to have the To succeed, leaders need to focus on right people in the right jobs focused four priorities. on the right priorities—and ensure 1. Executive, develop thyself. that employees have the information Expectations of leadership have risen and support they need to align their beyond the capabilities of most senior interests and career aspirations with executives. The best leaders know the organization’s goals. That dual they need to be compelling and inspi- focus can reduce unwanted turnover rational, but they are often challenged and create a sustainable competitive by how to do it. What does it take? advantage. To achieve it: • Cast an objective eye. Know how • Don’t “manage” your top talent. you measure up to today’s higher • Earn trust every day. In a well-man- These people have marketable skills, standards and what impact your aged organization, only half the work- and so if they have their fate decided actions have. It’s easy to dismiss feed- force will say they trust senior leaders, by a succession planning committee or back as grumbling, since the most yet most executives rate themselves as a well-intentioned manager, they may annoying employees are the first to trustworthy. This intent/effect gap head for the door. Top talent demand to point out your flaws. It is critical, results from employees drawing con- be involved. They have their own ideas however, that you listen, not argue. clusions with minimum information— for moving forward. The best leaders • Take time to reflect on what drives what is said in a meeting or a decision offer desirable stretch assignments and you personally. Personal values fuel communicated through the ranks—not special projects and encourage innova- confidence and effective communica- the other 90 percent of what leaders do tion and risk-taking. Align individuals’ tions. To be inspirational, you need to each day. So, leaders need to explain initiative with organizational priorities, be inspired yourself. the decision-making process and moti- and then get out of the way. 2. Correct cultural corruption. vation for their actions. • Develop the pack. Many leaders Compliance with the new laws and 3. Drive productivity and innova- provide elaborate high-potential pro- regulatory requirements might keep tion through engagement. Leaders need grams and only mediocre develop- you out of jail and your firm out of to own employee engagement because ment opportunities for the rest. That’s the headlines, but it won’t build a sus- engaged employees are more produc- a shaky foundation. Leaders need to tainable, high-performing organiza- tive, treat customers better, innovate, tirelessly align and coach team mem- tion. Cultural corruption isn’t about and stay. Don’t confuse employee bers. Consistent high-performing busi- breaking the law. It’s about bad busi- engagement with satisfaction and nesses hold leaders accountable for ness practices that undermine com- assume that a few HR initiatives can developing team members. Leaders mitment. It’s about the chasm give poor employee survey scores a who actively coach are well-positioned between leaders’ talk and actions. boost. Engagement goes beyond satis- to quickly redeploy talent to meet Prevent your high performers from faction to reflect contribution. Engaged shifting business requirements. LE bolting toward the door: employees are committed and aligned Christopher Rice is president and CEO of BlessingWhite. • Watch for the little things that don’t to apply their unique skills to con- Email [email protected], call 908-904-1000, or visit www. seem right. Audits and culture scans tribute to priorities. blessingwhite.com. can identify practices that may support To boost engagement leaders should: ACTION: Excel in these priorities. Leadership Excellence 15 CHANGE TRANSITION ETHICS INTEGRITY Transition points are opportunities for business transformation. Here are three ways to respond to transition points: • New management initiatives: These Ride the initiatives must be designed to help Awakened drive growth, profitability, and share- FaceTurbulence the winds of change. holder value. Some companies intro- LeadLeaders with integrity. duce customer or quality initiatives. Others seek ways to reengineer their by John Bostick processes or reduce operating costs. by Joan Marques Some introduce initiatives to “digitize” or “globalize” their businesses. All such WAKENED LEADERS SACEO, I AM efforts depend on successful change often the face and management if they are to achieve their Alead themselves and Athe spokesperson of objectives. Leaders of such initiatives their followers with my company. So, I travel for various must know how to ride turbulence. more than just technical and academic reasons: sales calls, media interviews, • Mergers and acquisitions: In the wake skills. They maintain high alertness customer visits, negotiations with of deregulation, the M&A movement toward themselves, the people they partners—you name it, I’ve had a meet- has driven vast change, particularly guide, the organization they lead, and ing about it. In fact, this flow of needs, through mega-mergers. Firms consoli- the environment in which they operate. objectives, and requirements is one of date in order to address competitive Awakened leaders share five traits. the things I enjoy most about my job. challenges and commoditizing markets, 1. They are driven by more than For the most part, I enjoy being out as well as capitalize on anticipated syn- objectives. Although they know that there, watching business people do ergies. Yet, two-thirds of all mergers fail they have obtained their position to their stuff. I even enjoy a patch of tur- to achieve their objectives. Consolidating lead the organization toward growth bulence now and then. Why? Because organizations, cultures, processes, prac- and profits, they know well who drives turbulence—and the response it draws tices and systems is not easy. It takes the organization: the people. Thus, from flyers—tells me a lot great turbulence riders. awakened leaders ensure that every- about business people and • Partnerships and out- one involved—workers at all levels, reminds me of a few things sourcing: These approaches shareholders, suppliers, customers, about myself. enable companies to use the neighbors, and all others at stake—are During a recent flight, I capabilities of external par- treated well. They ensure that the observed how people on the ties as leverage, rather than objectives are aligned to the well-being plane react differently when struggle to buy or build of the people involved. And they turbulence hits. Some people them. By creating alliances ensure that they are kept abreast of stop what they are doing, with specialists, enterprises trends in the environment. Seeing life tighten their seatbelts, fold can acquire the capabilities as a gift, awakened leaders refrain their arms, and try to wait they need to compete effec- from setting objectives that can harm out the chop. Others keep tively without bearing all the the quality of life. And if certain trying to write notes, work on their risks associated with building them processes are potential hazards to the laptops, or read magazine articles. internally. Outsourcing enables them to health of some people, they search for And a few, like me, keep switching concentrate on the core capabilities that alternatives so that the quality of life of activities based on what works, differentiate them while ensuring that even those whom they do not know, or regardless of the bumps. non-core, yet critical and supporting, have not encountered yet, is secured. I see parallels between the response systems are effectively managed. Such 2. They are value-based. Awakened to turbulence on a plane and the moves enable leaders to anticipate and leaders base their decisions largely on response by business leaders to the react more rapidly to market change— values—the set of personal rules that accelerating pace of change. Many oper- and they get the capabilities and bene- they develop as they grow up. These ations managers react to the dynamic fits now. Such “strategic multi-sourcing” come from home, school, religion, environment like the first and second is another way to thrive on turbulence. books, and other impressions. Values groups of air travelers. They wait for the While these three approaches to differ from person to person, culture to disruption to pass, or try to forge ahead. confronting change involve risk, there culture. Two awakened leaders from But they have no way of knowing is more risk associated with failing to entirely diverging cultures can make whether the turbulence will stop, get act. So recognize transition points and very different decisions or very similar better, or become more predictable. The take steps to address the changes they decisions. Awakened leaders know environment is not in their control. Only signify. Markets are prone to “creative that there is no single way of leading, their response to it is in their control. So, destruction.” The acceleration of and that different decisions can all lead riding the flow of the turbulence is the change only enhances vulnerability, to useful outcomes. They know that it only way to find a productive activity. while empowering and enabling chal- is not necessarily the nature of the deci- In today’s changing atmosphere, lengers to compete. Given these cir- sion, but more the actions undertaken business is a bumpy ride. And execu- cumstances, leaders must learn to after the decision has been made, that tives should take technological dis- manage ongoing change. LE make it a successful one or not. ruptions as opportunities to transform John Bostick is president and CEO of dbaDIRECT which pro- 3. They have integrity. Integrity goes business practices and processes vides data infrastructure management services. Email john. with trustworthiness and honesty. rather than shut down operations or [email protected]. Knowing the importance of their fol- continue counter-productive activities. ACTION: Respond to transition points. lowers believing in them, awakened 16 Leadership Excellence PEOPLE REWARDS leaders always come up with the satisfaction, and two of every three truth—even when it is not as beautiful people are looking for other work. as they would want it to be. They real- The problem, for most leaders, stems ize that if people are told what’s going from approaching leadership from the on, they will be more understanding The Carrot old transactional approach where and more willing to do whatever it recognition is a tool to manipulate peo- takes to get things straight. When Principle ple to work harder and be more loyal, asked what qualities they would like in Recognition that works. helping manager achieve their goals. their leaders, people always mention Since these managers approach integrity at the top of the list. As adults by Adrian Gostick recognition with themselves—rather we all know that it’s not always pleas- than their employees—in mind, they ant to hear the truth. But we would look for quick-and-easy rewards rather deal with the truth now than MPLOYEE RECOGNITION, requiring little thought or preparation, with a beautiful lie that only brings long considered a often settling for one-size-fits-all more headache, pain, and adjustments Ebenefit that costs awards. Everyone gets a video rental later. Awakened leaders opt for integri- money, can actually make money for certificate, a coffee card, a cash bonus, ty because they want to maintain their organizations that do it right. It’s like an event ticket, or candy bar. inner peace. And that is only possible if discovering gold in your backyard Carrot Principle managers reward the truth is communicated at all times. At first blush, the idea is counter-intu- people for performing tasks that are Their integrity is reflected in their itive. As leaders, we tend to view recog- valuable to the team or organization communication with stakeholders, and nition programs as a cost. But recognition and that help employees achieve their in the way they guide the organiza- is evolving. Applying recognition tech- personal goals. Such purpose-based tion. Involvement in questionable niques within a context of goal-setting, recognition reinforces their self worth; practices is taboo, even if the future open communication, trust, and account- it links people to the most important seems to depend on it. They believe ability accelerates the impact of these crit- actions; it leverages people’s unique that with the right intentions toward ical management skills. strengths and their potential; the people, the business, and the envi- That’s the Carrot Principle at and it provides proof of ronment, a better option will surface. work; and here’s what it can accomplishment for employ- 4. They have genuine compassion and do for you as a leader: ees and their team members. respect for those they lead. These leaders • Increase profitability and It all boils down to leaders are down-to-earth people who respect customer service levels. Return and employees finding a every member—no position is perceived on equity and return on assets sense of purpose at work superior or inferior to another. They see are three times higher in orga- through achieving shared the facts of life in their right perspective: nizations with an effective way goals. When that happens, everything is of equal importance to to recognize employee excel- recognition takes on a differ- great business performance—the source lence. The teams and offices ent look and feel. For exam- of their livelihood. So they treat each rated most highly by employ- ple, one leader supervised a worker with respect. They mingle with ees in response to, “My manager does security guard who also had a passion their people regularly to establish con- a good job of recognizing employee for conservation. This savvy manager nection and create goodwill and sup- contributions,” also typically place in rewarded the guard with a new title: port. They also mingle because they the top scores for customer satisfaction. Security and Energy Conservation realize that teachers appear at the most • Heighten employee engagement and Officer. Now, during the man’s security unexpected moments and places. They satisfaction. People who feel recog- rounds, his auxiliary job is to turn off are ready to learn from every person. nized demonstrate greater innovation lights and close doors to keep in heat or 5. They touch the spirit of the people. and creativity, take more personal cold. This simple change in duties and They provide a sense of meaning to peo- responsibility, have a greater desire to title brought job satisfaction to him and ple. They update meetings, company contribute to the success of the compa- a tidy cost savings to the company. gatherings, family days, and encourage ny, and develop a stronger emotional Several years ago, St. Joseph hospital their people through email, flyers, or bond to the organization and its goals. had a turnover rate of 32.5 percent. departmental sessions. They know that Recognized employees do more to Within two years of implementing the the people have family members and a help the company succeed, including Carrot Principle, St, Joseph doubled its life—hobbies and skills—and so they lead, innovate, and serve customers. operating margin from 1.5 to 3 percent. encourage people to share those skills Revamp Old-School Recognition By the end of the third year, turnover with others. They might consider a talent had fallen to half its starting point, result- night, or encourage co-workers to create a Most leaders believe they already are ing in a $4 million savings each year. pleasant workplace, with pictures and effective at recognition. During the past We invite you to put the Carrot drawings from the kids. They hold meet- decade, we have consulted with hun- Principle to work. Applying recognition ings in which people get to ask questions. dreds of top leaders. Our problem has principles within a context of goal-set- Awakened leaders recognize that not been convincing them that purpose- ting, open communication, trust, and workers are spiritual beings with vari- based recognition can help them to accountability can make this be the best ous qualities, and they encourage peo- achieve their goals. Our challenge is way you have to lead people. LE ple to cultivate those qualities. LE getting them to entertain the idea that Adrian Gostick and Chester Elton are the authors of four best- Joan Marques is a professor of business and management at they might be doing recognition wrong. selling management books. This article is adapted from their new Woodbury University and co-founder of the Business Most people report feeling unrecog- book, The Carrot Principle (Simon & Schuster). Visit carrots.com. Renaissance Institute. Visit www.bri-usa.com. nized. Only 40 percent of employees ACTION: Awaken your capacity to lead. report high engagement and high job ACTION: Recognize your people in these areas. Leadership Excellence 17 LEADERSHIP DECISIONS sub-team. This gives everyone fair warning: If you want your voice to be heard, contact the sub-team before the deadline. Once the decision is made and announced to the full team, it is They are both decision makers and mentors. considered a fait accompli. The discus- Decision Leaders sion should now move to how the decision will be communicated and by Howard M. Guttman list of these. The question is not who implemented. Effective decision-mak- will make which decisions, but what ing teams set a shelf-life for the deci- key decisions will the team be making. sion, noting milestone dates when EADERS MAKE DECI- • Identify decision sub-teams. For each should be revisited. sions. Good deci- each decision, assemble a sub-team 3. Overcome the challenges. In our Lsions create value and that becomes responsible for making observations of leaders who have gone define a leader’s effectiveness. Poor the decision. Identify the smallest through the process of delegating deci- decisions cast shadows over organiza- number of people needed to make the sion-making, we have identified four tions and those who lead them. decision quickly, efficiently, and with traps into which teams typically fall, In every business magazine, you’ll an eye to a quality outcome. along with tips to counteract them: find examples of both flawed deci- • Assign accountability. Every sub- • Deferring to the leader. Team mem- sions and shrewd decisions made by team needs a point person who is bers tend to defer to you. Refuse to leaders. What distinguishes the lead- play along. Unless you are part of a ers who consistently make wise deci- sub-team, be judicious about offering sions? As a leader, what can you do to your opinion to that team. Hold sub- improve your decision track record? teams accountable for making the Here are three ideas: decisions assigned to them. 1. Go horizontal. The best deci- • The more, the merrier. Make sure sion-making leaders have “gone hori- that everyone appointed to the sub- zontal,” meaning they have done team adds value to the decision-mak- away with the old hierarchical busi- ing process. The price of admission ness model where decisions are made should be proficiency, not position. at the top and executed below. In hori- • Clueless about closure. Because a zontal organizations, decision-making person has technical knowledge or responsibility is decentralized. Time- occupies a certain position on the consuming, back-and-forth posturing organization chart doesn’t mean that and permission-seeking are swept responsible for driving closure. Beware he or she should be the point person away. Decisions are made by those of the leadership reversion syndrome, for a decision. Driving a decision to closest to the action, with access to the which arises when the leader serves as closure requires influencing others and most comprehensive, accurate infor- the point person on too many sub- keeping them in process—leadership, mation and responsibility for imple- teams. It comes dangerously close to not technical skills. If a selected point mentation. This results in faster, better the old hierarchical model. person doesn’t have the necessary decision-making and smoother execu- • Select the decision-making mode. skills, arrange for coaching right away. tion. Leaders—from first-level super- There are three basic decision modes: • Forced unanimity. Everyone doesn’t visors to the CEO—need to reframe unilateral—made by one person with no have to agree with a decision, but their thinking about leadership, view input from others, consultative—made everyone must be able to live with its shared decision-making as a pivotal by one person after getting input from outcome. Don’t permit a sub-team to strategy for success, and provide others, or by consensus—everyone has try to win over everyone; do make teams with the information and skills input and everyone must agree. sure that everyone on the team makes needed to make the tough choices. Although most team decisions are a public commitment to abide by the 2. Use a four-step process. Sure, made consultatively, no one way is decision once it is made. Don’t permit leaders are paid to make decisions. necessarily superior to another, and no second-guessing the sub-teams. Some decisions can only be made by one way is appropriate for all types of Today business leaders are both the leader, but many other decisions decisions. No matter which mode is decision makers and decision mentors can and should be delegated. The hor- chosen, everyone must agree on and responsible for ensuring that the deci- izontal leader provides team members adhere to the selected mode. sion-making machine is whirring with a process for identifying and For consultative decisions, the full along: the right issues are being handling both types of decisions. Be team may identify the other relevant addressed; the right people are being clear on what decisions face a team, parties whose point-of-view will add deployed; decisions are being made in who will make them, and how. Follow value to the decision, or it may be left a timely fashion; and they are seamless- this four-step process for guiding your to the sub-team to select those with ly communicated and implemented. decision making: whom they will consult. In either case, They must learn to multiply good • Identify the decisions that need to ask: Who are the people who need to decisions, not just make them. LE be made. Whether intact or time-limit- be involved: as information sources, Howard M. Guttman is author of When Goliaths Clash: ed, cross-functional or intra-functional, evaluators of the information, asses- Managing Executive Conflict. He is principal of Guttman Development Strategies. Visit www.guttmandev.com or email every team is responsible for an array sors of risk, or future implementers? [email protected]. of decisions. Effective leaders first Once a decision-making mode has work with the full team to develop a been determined, set a deadline for the ACTION: Multiply good decisions. 18 Leadership Excellence PEOPLE PERFORMANCE PEOPLE RELATIONS vidual progress. Specific, measurable behavioral targets can be set for most behaviors of “teamwork.” The mea- Performance sures might not be as “tight,” but it is Make Your Company better than leaving important compe- a Great Place to Work Management tencies unclear and unmeasured. Use Six Sigma principles. Step 3: Analyze the data. The data Promote positive relations. produced by performance measure- ment won’t require the statistics Six by Michael M. Grant Sigma does and can be done in brief, informal conversations about where the employee is, to date, on perfor- LTHOUGH MANAGING mance objectives (above, on target, the performance of below). The manager needs to ask: people is often more “How are you doing this week, month A by Stephen J. Cabot and challenging than ensuring an opera- or quarter on your performance goal— tions process produces no more than what do the measures indicate?” Julius M. Steiner 3.4 defects per million (the goal of the In areas in which a direct report is Six Sigma), the same principles apply. below an acceptable level of performance ANY LEADERS FIND THAT AN EFFECTIVE I find it odd that leaders who suc- or, if on target, could do even better, means for reducing labor rela- cessfully use Six Sigma to manage specific coaching and developmental Mtions problems before they arise is to product and service quality find perfor- opportunities can be provided to help hire committed workers with positive mance management such a challenging the employee improve. Engaging in attitudes. By developing a strategic and painful process. Most managers improvement efforts can be added to the HR plan that fosters a reputation as a conceive of performance management original performance objective and the great place to work, you attract pro- as a once-a-year process, dread it, put it effects of these efforts assessed to pro- ductive workers who take pride in off, and then rush through it vide data for the next perfor- their work and their company. to get it over with quickly— mance discussion. In various venues, workers should like filing income taxes. Engage in analysis and get to express themselves to manage- To achieve minimal improvement discussions ment. If you do not listen and respond defects goals, Six Sigma fol- frequently. Ongoing feed- positively, problems will fester and lows four steps, and the same back and coaching about labor relations problems arise. You steps can be used in manag- performance should occur must communicate your interest in the ing people performance: monthly, if not weekly, and it welfare of employees by creating Step 1: Define what will be can be brief and informal. A worker-friendly conditions that enable improved. As the strategic five-minute “check in” may workers to control more of their lives. goals cascade from leaders on be all that is needed. Keep Efforts to make the workplace more down, each person is assigned perfor- giving positive feedback and coaching. healthful and less stressful are appreciated mance goals for a time. Make sure each Step 4: Maintain performance by workers and result in greater produc- person understands his or her goals, improvements. Recognizing and tivity. For example, many companies now agrees to them, and sees how these align rewarding good performance is a have on-site fitness programs, subsidize with strategic goals. Set expectations and powerful way to maintain and rein- on-site fitness centers, and provide yoga then set SMART (Specific, Measurable, force it. Acknowledging gains, verbal- or aerobic exercise classes. Companies Attainable, Relevant, and Time-Bound) ly or in writing (even in small ways), may also provide unpaid sabbaticals for objectives. Most leaders and managers makes a big difference, since rein- those who have been with the company don’t co-create SMART objectives with forced behavior is repeated. So, when for so many years or have seniority. their people. Vague, un-measurable you see your people improve their Menu of Incentives goals make for ambiguous performance. performance, reinforce it. Step 2: Decide how to measure the If you follow the four steps in manag- Here is a menu of programs that performance objective. How will peo- ing your people’s performance, then can be combined and refined to satisfy ple measure progress and report back? performance reviews can become the needs of workers and create a rep- What will they measure? Cost, timeli- reviews of the progress and develop- utation as a great place to work. ness, quality, customer satisfaction, ment. Agreement on performance rat- 1. Recreation programs. Sponsor error reduction, quantity, what? ings for the period is less subjective video game tournaments, movie Managers struggle with measurement, because it is driven by data collected nights, trips to the theater, wine tasting when the performance or behavior against each SMART objective. Apply- trips, weekend skiing trips, and atten- seems less quantifiable as in a compe- ing Six Sigma steps to performance dance at sporting events. tency like “teamwork” or “communi- management better fulfills its real pur- 2. Financial incentives. Put a per- cation.” Break down competencies or pose—achieving the strategic goals by centage of salaries into 401 (k) plans, behavioral objectives into their compo- ensuring that each employee meet his or offer free investment advice from pro- nent parts. “Teamwork”, for example, her goals. Six Sigma for people is the fessionals, and provide interest-free could be made measurable if SMART essence of performance management. LE loans for college. objectives were related to: 1) on-time 3. Equitable advancement. In com- Michael M. Grant is a principal at Leadership Resource attendance at team meetings; 2) offers Center. Email [email protected]. panies with a large portion of female ideas to solve team problems; 3) com- employees, more women should be municates back to the team about indi- ACTION: Improve your performance management. promoted to managerial positions. Leadership Excellence 19 PERFORMANCE EFFICIENCY 4. Recipient gifts. When a mother leader embraces differences, respects gives birth, she may be the grateful disagreement, and doesn’t surround recipients of a cash bonus, a savings him or herself with “yes” people. bond in the name of the new born Once you have your diverse talent child, and free at-home cleaning ser- Embrace and agree on the team mission, define vices for a time. New employees may how your team will work together. Set get signing bonuses based upon their Diversity and use ground rules: What are the competence and experience. Their Build more effective teams. decision-making procedures, roles, and spouses might receive flowers. problem-solving mechanisms? 5. Mentor programs. Assign a men- by Marilyn Manning Four-Step Process tor to every new employee and plan non-work activities for mentors and This four-step process uses personal mentees, such as baseball games, golf OW CAN YOU TURN A values as its foundation. outings, lunches and dinners. New group of diverse Step 1. Have people submit five val- employees who are mentored tend to Hindividuals into a highly ues important to them. Examples have high rates of productivity, quick- efficient team to complete complex pro- might be honesty, accuracy, teamwork, ly learn new tasks, and develop an jects and tasks? As a leader, you don’t creativity, and risk-taking. appreciation of corporate goals. always get to hand-pick your team— Step 2. As a group, prioritize the values, 6. Sales goals. If employees reach or you often inherit teams and all the bag- and choose values that all can agree to. exceed sales goals, they might receive gage. You need to define desired out- Step 3. Define each value and why it a cash bonus, free membership in a comes, set measurable goals, design is important for your team. health club, a night out at a favorite your game plan, set benchmarks and Step 4. Identify what behaviors and restaurant, play, or sporting event. deadlines, and keep everyone focused actions reinforce this value, and what 7. Relax and enjoy life. Employees on high-profile projects. behaviors can undermine it. List how may receive monthly massages, regular Real teams hold themselves account- you can reinforce the value and what yoga classes, free manicures and able to apply their complementary skills you should avoid. makeovers; they may also be invited to to achieve a common pur- For example, you might participate in golf outings, company pose and meet performance identify the value of picnics, and other recreational activities. goals. In forming teams, con- respect. Respect is needed 8. Training. If companies provide sider: What is our ideal size? to build loyalty and mutual workers with extra training that permits What skills do we have— trust. You reinforce respect them to undertake increased responsi- and need to add? How does by seeking others’ input bilities, they will feel increased loyalty. each member contribute to regarding decisions that As management promotes from within, our mission and purpose? may affect them. You workers feel they have an incentive to Do we set, track, and meet undermine respect when achieve success. If employees take performance goals? Do we you change direction with- courses that are related to their job set and live by behavioral out giving an explanation. responsibilities, management may ground rules and hold our- Take your team through choose to pay for those courses. selves accountable? this exercise to build teamwork. When 9. An ongoing strategic HR plan. This I was once asked to facilitate prob- a team participates in defining and develops your reputation as a great lem-solving sessions with a team enforcing the norms, ownership hap- place to work. Build your reputation on plagued by interpersonal conflicts. The pens. Set only a few ground rules at a a foundation of sincerely asking, listen- team had five high achievers who had time. Ask your team: “What behaviors ing, talking, and acting in response to clear goals. One stated: “I don’t see why do we need to focus on next quarter?” employee needs and issues. Try to we meet as a team when we have noth- Once I worked with two warring know each worker’s name, job descrip- ing in common.” I couldn’t find any evi- divisions of a company. There was fin- tion, family background, and perfor- dence of collective work; however, ger-pointing, blaming, and passing the mance record. Your genuine concern when they talked about their roles and buck. After discussing expectations, builds trust. You can then open more goals, they could see potential intercon- they agreed on one ground rule: “I will channels of communication. nections. Their conflicts were due to meet my deadlines. If I must extend When people leave, conduct exit their isolation and lack of teamwork. the deadline, I’ll negotiate with all interviews to learn where to improve Effective teams do not encourage affected parties to agree on the new conditions, enhance the culture, and heroes or superstars. They look for deadline. I will notify all parties of any increase trust, credibility, and productivi- ways to maximize their resources and change at least 24 hours ahead.” ty. Express commitment to their welfare. build on each other’s strengths. It may When everyone followed this prac- You develop a reputation as great seem easier to work with people of sim- tice, it altered the way they worked place to work by devising and imple- ilar styles, thinking and background, together, changed their culture, and menting a strategic HR plan that includes but diversity brings richness to a team. engendered more respect. Ground rules asking, listening, and conversing with Embracing diversity means equal treat- set improved behaviors as the norm; employees, and by taking actions to meet ment and opportunity for people of all and when the team levies consequences, their needs and expectations. LE backgrounds, lifestyles, and beliefs. it reinforces desired changes. LE

Stephen J. Cabot is chairman of The Cabot Institute for Labor A diverse team can bring together Marilyn Manning is an author, speaker, and consultant in change, Relations. Visit www.cabotinstitute.com. Julius M. Steiner is individuals with different backgrounds, teamwork, and leadership. Email [email protected], chairman of labor relations at Obermayer Rebmann Maxwell & call 650-965-3663 or visit www.TheConsultingTeam.com. Hippel, LLP. Visit www.obermayer.com. approaches, and ways of thinking. An outstanding team has no subgroups, no ACTION: Create a positive work place. “we” vs. “they” attitude. An effective ACTION: Turn your group into a real team. 20 Leadership Excellence