LEADERSHIP OCTOBER 2007

ExcellenceTHE MAGAZINE OF LEADERSHIP DEVELOPMENT, MANAGERIAL EFFECTIVENESS, AND ORGANIZATIONAL PRODUCTIVITY

Don’t You Be Seduced by Success Customer As Boss Why Develop Your Leaders?

YouYou CanCan HaveHave MoreMore

Pat Lencioni Leadership Coach SatisfactionSatisfaction

“Leadership Excellence is an exceptional way to learn and then apply the best and latest ideas in the field of leadership.” —WARREN BENNIS, AUTHOR AND USC PROFESSOR OF MANAGEMENT w w w . L e a d e r E x c e l . c o m LEADERSHIP ™

THE MAGAZINE OF LEADERSHIP DEVELOPMENT, MANAGERIAL EFFECTIVENESS, AND ORGANIZATIONAL PRODUCTIVITY VOL.Excellence 24 NO. 10 OCTOBER 2007

On the Edge

Today’s leader, like this mountain lion, stays poised to pounce on opportunity that presents itself in the market to gain and sustain a competitive advantage.

HOWARD GARDNER Use an evidence- MICHAEL G. WINSTON DANIEL BURRUS Good Work based approach...... 7 Why Develop Leaders? Seek Advantage Internalize the need This is your only Keeping up is SCOTT J. ALLEN to act responsibly...... 3 competitive advantage. .12 a fool’s game...... 16 Effective Leadership ILEEN IGHE ROBERT GALFORD Assess the effectiveness E T ROBERT L. DILENSCHNEIDER Positive Influence of your current Leadership Development Keep Up, Move Ahead leader development...... 8 Think about your It won’t happen Don’t just imitate: leadership legacy...... 4 on cruise control...... 13 you must innovate...... 17 RON MCMILLAN PATRICK LENCIONI MICHAEL HAMMER Master Influencers TOM KOLDITZ Satisfaction They ensure the Customer Economy In Extremis Leaders Yes, you can get more vital behaviors...... 9 Attend to the agenda Can you and your of it at work...... 5 of the customer...... 14 team lead in crises?. . . . .18 ZIA KHAN AND JON TAMAR ELKELES KATZENBACH HIP ELL AND C R. B GEORGE DAVID Leadership Capability JOHN R. PATTERSON Peak Performance Doing More with Less Developing leaders Seek and gain an Customer as Boss Set big goals and should be a priority . . . . . 6 informal advantage. . . . .10 Be customer-centric. . . . .15 make them happen...... 19 JACK ZENGER AND RODERICK KRAMER ROBERT J. HERBOLD PETER ANDREWS JOE FOLKMAN Course Correction Seduced By Success Barriers to Innovation Leadership Maintain trust Avoid six success- You will face five Development 6.0 during change ...... 11 induced traps...... 16 big obstacles...... 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.)

Corporate Bulk Rates (to same address) $109 each for 6 to 25 Best in Leadership Development $99 each for 26 to 99 Call for rates on more than 100 copies: 1-877-250-1983 Here are the top LD programs for 2007. Back Issues: $10.00 each Fax (one article): $8.00

Leadership Excellence (ISSN 8756-2308), pub- lished monthly by Executive Excellence Publishing, by Ken Shelton presenters, how effective are their presenta- 1806 North 1120 West, Provo, UT 84604. tions, and how is the program delivered? 6. Article Reprints: OR 24 YEARS, WE’VE BEEN Take-home value. What do participants take For reprints of 100 or more, please contact the dedicated to leadership away and apply to improve themselves, editorial department at 801-375-4060 or send F email to [email protected]. development (LD). their families, their teams, and their volun- This year we connected teer work? 7. Outreach. What is the impact Internet Address: http://www.eep.com with over 1,000 organizations to determine of the program on stakeholders? Editorial Purpose: the best LD programs and practices based on Before listing this year’s winners, I con- Our mission is to promote personal and organi- zational leadership based on constructive values, seven criteria: 1. Vision/mission. Are these fess a few biases and beliefs: Many people in sound ethics, and timeless principles. statements linked to strategy, meaningful to this field don’t belong (they know next to Editorial: participants, and focused on target outcomes? nothing about authentic leadership). All correspondence, articles, letters, and requests 2. Involvement and participation. How Everything (and the kitchen sink) is now to reprint articles should be sent to: Editorial Department, Executive Excellence, 1806 North broad is the involvement and how deep the packaged under LD (to make it easier to sell 1120 West, Provo, Utah 84604; 801-375-4060, or participation? 3. Measurement and account- internally?). Everybody (and their dog) is [email protected] ability. What ROI measures are made and now ranking top LD programs (usually as a Contributing Editors: Chip Bell, Dianna Booher, Kevin Cashman, reported and to what degree is accountabili- marketing ploy). Management is getting Jim Loehr, Norm Smallwood, Joel Barker, Joseph ty for performance and results part of the short shrift. “Legacy” presenters and their Grenny, Jim Kouzes program? 4. Design, content, and curricu- companies are slipping. Great LD programs Executive Excellence Publishing: lum. How well designed is the program? benefit all stakeholders, cultivate loyalty and Ken Shelton, Editor-in-Chief, CEO Sean Beck, Circulation Manager How credible is the content? How relevant longevity, and inspire service, even sacrifice. Geoff Pace, Sales Manager is the curriculum? How customized is the We rated the best LD programs in seven Allan Jensen, Chief Information Officer program? 5. Presenters, presentations, and categories (my apologies in advance for all The table of contents art is a detail from On the delivery. What are the qualifications of the deserving people and programs omitted): Edge (image cropped) © Daniel Smith, and is courtesy of the artist and art print publisher Greenwich Workshop. Small to midsize organizations 19. Ritz-Carlton Hotels 11. Berkana Institute 17. Table Group 1. InsureMe 20. Dow Leadership Institute 12. Manchester Bidwell 18. Leadership Challenge/KP 2. Triage Consulting Group 21. JetBlue Airways 19. Interaction Associates For additional information on artwork by 13. Healthcare Businesswomen Assoc. Daniel Smith, please contact: 3. Success Factors 22. McDonald’s 14. LDS Church 20. Authentic Leadership Institute Greenwich Workshop 4. Carnival Cruise Lines 23. Disney Institute 15. SoL 21. Leadership Development Services 151 Main Street 5. Analytical Graphics 24. Best Buy 16. Leadership Wabash Valley 22. Adizes Institute Saymour, CT 06483 6. Genecor International 25. Home Depot 17. Griffen Hospital 23. Leadership Research Institute 1-800-243-4246 7. Wieland (Homes) University 18. Anasazi Foundation 24. Chip Bell Group www.greenwichworkshop.com 8. Americredit Financial Services Education/universities/schools of 25. Cornerstone Leadership Institute 19. Addison Avenue Fed. Credit Union Full view of cover art. 9. Equity Residential management and business 20. Girl Scouts/Boy Scouts 26. Mariposa Leadership 10. Johnson Controls 1. Univ. of Michigan/Ross 27. Leadership IQ 11. Carilion Health System 2. Center for Public Leadership, Government/military 28. iLeadUSA 12. Simonton Windows JFK School of Government, Harvard 1. Defense Acquisition University 13. Pike Place Fish Market 3. Univ. of Chicago/GSB/Leadership 2. U.S. Air Force Academy Large consulting groups 14. Plante & Moran 4. UCLA/Anderson 3. FBI Academy 1. Linkage/GILD 15. Acuity (Mutual Insurance Co.) 5. USC/Marshall/CEO 4. U.S. Navy Naval Academy 2. Results-Based Leadership 16. Pacific Service Credit Union 6. Northwestern/Kellogg 5. U.S. Marine Academy 3. Center for Creative Leadership 17. Stew Leonard’s 7. Pennsylvania/Wharton 6. U.S. Army/Westpoint 4. HSM/World Business Forum 18. Republic Bancorp 8. MIT/Sloan 7. U.S. Army Rangers 5. Senn-Delaney Leadership 19. Container Store 9. Harvard Business/True North 8. ASQ Baldrige Award 6. McKinsey/Leadership 20. Wiley & Sons 10. Duke/Fuqua 9. Coast Guard 7. Vital Smarts Many small companies have impres- 11. Ball State Univ./Ed. Leadership 10. U.S. National Guard 8. Accenture sive leadership development but lack 12. Emory Univ. 11. National Defense University 9. Lee Hecht Harrison formal programs 13. Utah Valley Univ./CAL 12. U.S. Tactical/Seals 10. DDI 14. Vanderbilt/Org. LD 13. Naval Undersea Warfare Center 11. Adizes Institute Large organizations 15. Univ. of Minnesota/ Carlson 14. FAA 12. Richard Chang Assoc. Copyright © 2007 Executive Excellence Publishing.No 1. General Electric 16. Bellevue Univ. 13. Dialogos part of this publication may be reproduced or transmit- 2. Southwest Airlines 17. Yale Leadership Institute Consultants/trainers/coaches 14. Pacific Institute ted without written permission from the publisher. 3. Procter & Gamble 18. Stanford/GSB Leadership 1. Zenger/Folkman 15. Booz Allen Hamilton Quotations must be credited. 4. Catepillar University 19. BYU/Marriott/Leadership 2. Goldsmith/Katzenbach Partners 16. Hewitt/Leadership 5. Capital One 20. Pepperdine/Graziadio/SBM 3. Marcus Buckingham Company 17. Plante & Moran 6. Boeing 21. Carnegie Mellon/Tepper/Leadership 4. Jim Collins 18. BlessingWhite 7. Yahoo 5. Human Performance Institute 19. Franklin-Covey 8. Countrywide Financial Non-profit organizations 6. Leadersource 20. Crowe Chizek & Co. 9. Qualcomm 1. ASTD 7. Lebow Company 21. Ken Blanchard Companies 10. Motorola University 2. SHRM 8. Synthesis/Leaders Toolbox 22. Forum Leadership Development 11. General Motors University 3. ISPI 9. Tom Peters Company 23. Personnel Decisions Intl. (PDI) 12. Wachovia Corp. 4. NYC Leadership Academy 10. Bluepoint Leadership 24. Achieve Global 13. Fed Ex/ELI 5. Conference Board 11. Strategos 25. Lore International Institute 14. Microsoft 6. HR.Com 12. Ninth House 15. IBM 7. Baptist Leadership Institute 13. Josh Bersin & Assoc. Please visit www.LeaderExcel.com 16. Colgate Palmolive 8. Leader to Leader Institute 14. Maxcomm for more on Best Leadership Develop- 17. Ikea US 9. HCI 15. Liminal Group/Benchmark ment Programs, Principles, Practices, 18. Pfizer 10. IQPC/Corporate University 16. Guttman Dev. Strategies and Presenters. LE

2 Leadership Excellence ETHICS RESPONSIBILITY 3. Work and responsibility. A notion culture; the sum of the field entities that marks the intersection of work constitutes the society. and responsibility is that of vocation or 4. The larger social reward system. Good Work calling. These words imply that the Individuals, domains, and fields are It’s your responsibility. work we carry out is work that we embedded in the society and economy. have been “called” to execute carefully This broader society embraces various and responsibly. When work is consid- rewards and sanctions, and these exert by Howard Gardner ered “just a job,” the responsibility is influence over and above the signals circumscribed—we carry out the letter that permeate a domain or profession. of our job description—nothing more. Good work is most likely to emerge OST OF US THINK IN We get paid for what we do, as long as when these four elements are aligned. Mterms of our we do it. And when a better opportu- This does not guarantee good work, rights of life, liberty, nity arises, or when our organization but when workers’ beliefs and values and the pursuit of happiness and a decides that our services are no longer coincide with those of the domain, comfortable life. Yet, we all have cer- needed, we move on. Today, life cen- field, and society, they are free to work tain responsibilities. We’re expected to ters around work we want to do, like in ways that make sense to them. assume responsibility for our health to do, and feel needs to be done well. Each individual must decide and welfare; for those who depend on Our work needs to be “good.” whether to behave in a professional us—spouses, offspring, and as they 4. Good work. Good work is of excel- manner. Many “professionals” aggran- age, grandparents and parents; for lent technical quality, ethically pur- dize themselves, cut corners, and ben- those at our workplace, profession, sued, socially responsible, efit parasitically from neighborhood, community, and soci- engaging, and enjoyable. Of colleagues. And many ety. No wonder we are more comfort- course, such work is not humble tradesmen behave able with rights: the areas for which easily achieved. Not all in ways that are highly we could assume responsibility work is executed at a level professional. In standard threaten to overwhelm us. of excellence, carried out professions, explicit Most of us spend at least half of ethically, and engages the responsibilities have our waking hours at work. For many passions of the worker. Still, emerged; professionals are of us, work entails burdens; for a for- we strive to become good expected to know these tunate few, work is a privilege, gar- workers and to encourage and to act in accordance landed with rewards. This is especially good work. A nagging with them. In less profes- true for professionals—individuals question arises: how do we sional work, the burden of who are accorded status, prestige, and discourage or prevent work that does delineating these responsibilities falls a comfortable livelihood, in return for not meet these criteria of good work? more on the individual practitioner. which we are expected to offer high- Who is responsible for good work? level services and clear-minded judg- Values, Ethics, Morality ment. Today, issues of responsibility The Good Work Model Good workers honor the core val- have taken on new urgency. Across Good work entails four elements: ues of their profession rather than suc- the professions, examples abound of 1. The individual worker. Relevant cumb to pressures of their supervisors work that is clearly irresponsible. here are the worker’s belief systems, or seductive lures of the marketplace. motivation for doing good work, and We withhold the epithet “good work- Four Key Concepts personality, temperament, and charac- er” from those who use their positions I comment on four key concepts: ter. These determine whether the per- to enhance their pocketbook, achieve 1. Work. For most of history, we’ve son will hold to high standards or cut credit unfairly, or abuse others. worked long hours so that we could corners, “go along,” or engage in com- Not all ethical issues and judgments eat, have shelter, survive, be secure, promised or irresponsible work. of quality are clear cut—some involve and protect our families. Most labor- 2. The domain of work. All profes- right versus right or shades of gray: Is ers have little time for leisure. Today sions and most other lines of work it better for a physician to serve a large we see an increasing division of labor have a set of core values and beliefs population or initiate a concierge prac- and hierarchization and specialization that are known to workers and carry a tice, in which enrolled patients are well of work. Those in power have latitude certain degree of force. For example, served but only those with the means in how they approach their work and for more than 2,000 years physicians to pay for it are beneficiaries? Should allocate time. Those with special know- have tried to adhere to the core com- the lawyer give her all for a client, no ledge form prestigious professions. mitments of the Hippocratic Oath. matter how nefarious the client, or 2. Responsibility. To have an open 3. The field forces that operate on draw on a broader sense of justice? and fair society, we must be prepared the domain. Mediating the core values Recognizing the complexity of ethics to carry out crucial actions: we must are social entities: gatekeepers who is not the same as embracing relativism. act toward others in the way in which determine entry, individuals who pro- That the answer is not always clear or we would want all others to behave, vide or deny opportunities or prizes, that judgments may be controversial is and avoid other actions—however and evaluators who assess the merit of scarcely license for “anything goes.” In tempting. The classical view of poli- the work. Think of the field as the most cases, one path is superior to tics entails a commitment to act as a individuals and institutions that hold another: Bribery may be part of doing responsible citizen, and the classical power and make decisions. The sum business somewhere, but few would view of a profession entails a commit- of the domains (all professions, arts, defend a system of bribery as superior ment to act as a responsible worker. crafts, and disciplines) constitutes the to one that bans or punishes bribery. Leadership Excellence 3 In ethical work, workers have a set LEADERSHIP LEGACY of values that draw on the enduring legacies in personal terms: “I hope that values of the domain. They operate my legacy at work will consist of the according to those values, even when Positive Influence same things for which my family will these clash with immediate self-inter- Advisor to leader to legacy. remember me, and be proud of.” est. They recognize issues of moral Focusing on legacy has a second complexity, wrestle with them, seek valuable outcome: helping leaders advice and guidance, reflect on what by Robert Galford leave positive legacies. Successful com- goes right, and seek to right the course. panies most always have strong lead- They take the challenges of responsibil- ers, but organizational success often ity seriously and seek to behave in as HEN I SPOKE WITH MY comes at a personal price. We all can responsible a way as possible. Wcollege freshman name people who built financially suc- Still, we regularly encounter exam- son about our book, cessful companies at the cost of per- ples of irresponsibility. Clearly we find Your Leadership Legacy, I said, “Think sonal relationships or their own it too easy to shirk responsibility and about Enron. Ken Lay. Jeff Skilling. satisfaction. They excelled at driving a behave in ways that may be good for What might have been prevented if company forward, yet left peers and us, but not healthy for society. Matters they’d thought more about what they direct reports vowing: “I’m never conspire to undermine responsibility. wanted people to remember about going to behave that way.” They leave We are not born moral or ethical— them? What if they had spent less time negative leadership legacies. these virtues need to be nurtured, trying to ‘goose’ the stock price and often against the odds. Those who more time doing their job in such a Ask Two Questions start on the right track can deviate. way that people would respect them?” When considering your leadership Pressures and seductions are power- My son casually replied, “So your legacy, ask two questions: ful. The material rewards for irrespon- book says two things: Think long term. 1. Who were the last 10 people to sibility sometimes dwarf the plaudits Don’t be stupid.” Then he said, “I unexpectedly come into your office, for responsibility. Intrinsic motivation guess no matter how big a deal you call, or email and what did they want? becomes essential in a milieu where are, leaving a positive leadership lega- Did they seek advice? Did they want ambient signals diminish ethical sense. cy takes some work.” you to mediate a dispute or help them The sense of responsibility of those Indeed. When we start out, we find brainstorm? A theme in your answers who do an exemplary job extends to that success hinges on customer and provides a clue as to your tendencies other individuals, to the core values of client relationships. as a leader, and the legacy their domain, to the benefit of society. Mastering our craft, doing you’re seeding. The decision to enter a caring profes- great work for clients, and 2. What parts of your sion, go against the odds, persevere, becoming their trusted advi- job you find most enjoy- and navigate uncharted domains char- sors lays the foundation for able? Do you see overlap acterize individuals who embrace our roles as trusted leaders. with the needs people turn responsibility, sometimes to the point of We usually consider the to you to fill? If so, there’s exhaustion, and model it for others. impact of our leadership another clue. What parts of Professionals are buffeted by pow- when we’re about to retire your job do you enjoy the erful market forces. The crucial vari- or relocate. Looking back, least? Are these formal able is the extent to which people in we face unsettling “could responsibilities you take on that vocation take on the responsibili- haves” and “would haves.” because you feel you must? ties they deem important, whether or These questions help you think not support is available from others or Catalyst for Action about where and why you might be from the values of the domain. Your leadership legacy should be a leaving a negative legacy, and where Here are six takeaways: 1) know the catalyst for action, rather than an after- you’re having a positive impact. mission of your occupation and your thought. If quarterly results are your role in it; 2) relate your beliefs and goals only benchmark, you might accom- Influence Your Course to your occupation and roles; 3) work plish small, discontinuous wins, and Your legacy is today. Sure, over with individuals and institutions that never have the impact you could as a time, you’ll be reviewed on several fac- take responsibility seriously; 4) set pri- leader. Being intentional about your tors, including revenue figures, orities, be alert to limits and boundaries, desired long-term impact helps you growth, and profits. But your leader- and balance responsibilities; 5) broaden both in the short and long run. ship legacy—the influence that you your sphere of responsibility in your Thinking about your legacy is trig- have on the thoughts and actions of profession or community; and 6) sup- gered naturally when a crisis occurs. the people you lead—is being built port youth, the future good workers. The thinking that follows a crisis tends now, and is already being reflected in Most people have not internalized to be driven by emotion, and, while it the faces of each person you contact. the need to act responsibly. Leaders is powerful, the behavior changes it By influencing your course, being need to portray what it means to be inspires are rarely sustainable. Engag- aware of strengths and weaknesses, responsible, to model responsibility, ing in legacy thinking fosters cleaner and probing why certain aspects of and to pass on a sense of responsibility insights and sustainable changes. your job are more or less desirable, you to future stewards of the workplace. LE The more people reflect on the will seed a positive leadership legacy. LE impact of their leadership, the more Howard Earl Gardner is the Hobbs Professor of Robert Galford is co-author of Your Leadership Legacy with Cognition and Education, Harvard GSE. Call 617- they emphasize the influence they Regina Fazio Maruca (HBS Press) and co-author of The 496-4929 or visit www.howardgardner.com. have on the people they work with. Trusted Leader. Visit www.yourleadershiplegacy.com. ACTION: Take responsibility for good work. They talk about their desired work ACTION: Seed a positive leadership legacy. 4 Leadership Excellence MANAGEMENT SATISFACTION when employees cannot see how their Many managers are embarrassed or job makes a difference in the lives of afraid to try, fearing that people will Satisfaction others. Every employee needs to know see them as being disingenuous or Overcome job misery. that the work they do impacts some- manipulative. Some managers down- one’s life—a customer, co-worker, or play the impact of the human element supervisor—in some way. on job productivity and fulfillment, by Patrick Lencioni 3. Immeasurement. This refers to the often because they are embarrassed inability of employees to assess their about being emotionally open or contribution or success. Employees uncomfortable with showing interest EOPLE SPEND MUCH who have no means of measuring how in their people. Pof their time at well they are doing on a given day or 4. Political correctness. During work, and yet many week, must rely on the subjective interviews, managers are told to avoid are unfulfilled, frustrated and miser- opinions of others, usually their man- any personal questions that might be able in their jobs. A miserable job is agers’ opinions, to gauge progress or construed as discriminatory or irrele- not the same as a bad one. A bad job contribution. vant to the job. And when people start lies in the eye of the beholder. One Few managers take a genuine inter- working for them, many managers person’s dream job might be another est in their people, remind them of the continue to deal with them at an arm’s person’s nightmare. impact that their work has on others, length, rather than treating them as For some people, a “good” job is and help them establish creative ways human beings with families, aspira- about being paid well; for others, it’s to measure and assess their perfor- tions, and hobbies. They fear that by about the prestige of working for a mance. taking an interest in their well-known company; and for others, it personal lives they step might be about not being behind a desk Why Managers Don’t Care into inappropriate territo- all day in an office. Having a “bad” job The primary driver of ry. Indeed, in the interview can mean that they are underpaid, do job dissatisfaction is not process, no personal ques- manual labor, or sit in an office without pay or benefits, but the rela- tions are allowed, but in ventilation or natural light. tionship that an employee the work experience, you has with his or her supervi- need to treat people like Signs of a Miserable Job sor or direct manager. Even full human beings. A miserable job is one that makes a people who are well paid, No excuse is valid for a person cynical, frustrated, and demor- do interesting work and manager who avoids treat- alized, draining them of their energy, have great autonomy don’t ing people like the three- enthusiasm, and self-esteem. People feel fulfilled in a job if their managers dimensional human beings they who are miserable in their jobs dread aren’t providing them with what they are—mothers, fathers, sisters, brothers, going to work and come home frus- need. Ask managers, “Why don’t you grandparents and neighbors, all of trated, defeated, and weary. Over get to know your employees?” and whom have a need to be known by the time, this dull pain erodes their confi- you’ll hear four reasons: person who oversees their work. dence and passion and affects their 1. Busyness. Many managers think family and friends. Miserable jobs can they are too busy; of course, the real What Managers Can Do be found in every industry and at problem is that these managers see Managers who struggle to show every level. Job misery spans all themselves primarily as individual interest in their people need to do income levels, ages, and geography. contributors who happen to have these two things: Three out of four people hate their direct reports—failing to realize that First, they need to overcome their jobs—and this misery costs employers the most important part of their jobs is fear of being politically incorrect. Yes, $350 billion a year in lost productivity. providing their people with what they managers need to be careful about the Job dissatisfaction kills morale and need to be productive and fulfilled in personal questions they ask in inter- drives up the cost of recruiting, hiring, their jobs). For them, any time taken views. But once the person is on and retraining employees. Here are away from “real work” is a waste and board, managers should act like three signs of a miserable job: a threat to progress. They have no human beings—not the automatons 1. Anonymity. Anonymity is the sense of the impact that they can have that our legal system requires them to feeling that employees get when they on an employee’s productivity and be during the interview process. realize that their manager has little morale. Second, they need to overcome their interest in them a human being and 2. Amnesia. These managers forget fear of coming across as insincere. They that they know little about their lives, how important it was to them when a need the courage and wisdom to real- their aspirations and interests. Regard- manager took an interest in them, ize that it is okay if employees initially less of how much money they make talked to them about why their work suspect that they are being manipula- or how much they love the nature of mattered, and gave them a means for tive—the truth about their intentions the work they do, people can’t be ful- evaluating progress. They forget what will become clear after they demon- filled at work unless their manager it was like when they were junior strate consistent, genuine interest in knows and cares about them as employees. They forget the impact that their employees as people. unique individuals. Most people managers have on an employee’s Job misery at work is costly, unnec- believe their managers don’t under- sense of self-esteem, enthusiasm, and essary, and treatable when managers stand them and aren’t genuinely inter- job fulfillment—just by taking an inter- approach their jobs so that employees ested in them. est in their life. find true fulfillment and satisfaction in 2. Irrelevance. Irrelevance takes root 3. Fear of being seen as touchy-feely. their jobs. Leadership Excellence 5 What Employees Can Do LEADERSHIP DEVELOPMENT Miserable employees can do three development and assists them in things to improve their situation: recruiting and developing top leaders. First they can assess whether their Leadership Companies that brand their LD pro- manager is interested in and capable of grams better attract and retain leader- addressing the three things that are Capability ship talent. Great leaders want to work required. And they have to realize that at companies with other great leaders most managers really do want to Build it using four strategies. who enjoy development opportunities. improve, in spite of the fact that they At QUALCOMM, we created a may seem disinterested. by Tamar Elkeles suite of LD opportunities and have Second, they need to help their man- branded them. We find that a compre- agers understand what they need. If hensive LD brand is more beneficial they have a strong relationship with EADERSHIP DEVELOP- and impactful than segmented leader- their manager, they can say it (“You Lment (LD) is crucial ship development opportunities. know, it would mean a lot to me if you for organizational suc- Through awards, external recognition, knew more about who I am and what cess. CEOs, management teams, and and external speaking engagements, makes me tick.” or, “Can you help me boards are interested in developing we’ve built a strong LD brand. understand why this work I’m doing their leadership pipeline. Talent 3. Align leadership development makes a difference to someone?”). reviews, talent management, executive with your executives’ personal inter- Third, they could start doing for coaching, and leaders teaching leaders ests. With the advancement of online their managers what they want for are some of the strategic initiatives that learning, podcasting, avatars, webinars themselves. For instance, employees have the attention of senior executives and YouTube, there are many ways to who take a greater interest in the life of worldwide. Effective use of leadership deliver great LD opportunities. Some their managers are bound to infect talent through internal mobility and companies offer leadership develop- them with the same kind of human development is a consistent theme. ment programs that utilize hiking, interest. Similarly, employees who take Developing leaders has become a sporting events, or musical experi- the time to tell their managers (with- top priority for many companies. ences to drive a leadership message. out sucking-up) about the impact they Investments in LD continue to increase Find out what team-building activities have on their job satisfaction, will globally, and the payoffs enable busi- are important to your top executives inspire them to respond in kind. ness viability and growth. and look for ways to align executive However, if an employee concludes Organizations need to build interests with your LD that his or her manager is completely leadership capability to opportunities. disinterested in helping them find ful- meet the evolving demands For example, a few fillment in their work, it may well be of diversity and complexity. years ago, we created a time to start looking for a new job. Creating a LD model to max- leadership development Even professional athletes and enter- imize leadership capabilities experience with the San tainers can be miserable in their jobs. In and utilize leadership talent Diego Symphony spite of the money they make and the effectively is a key focus. Orchestra. Our CEO was attention they receive from fans and the passionate about the sym- media, many experience the three signs Four Proven Strategies phony, and we discovered of a miserable job. Most pro athletes Use these four strategies. The Music Paradigm, a pro- feel anonymous in their jobs because 1. Create a LD model that gram that uses the their coaches and managers dedicate is driven by your business model. Use metaphor of a symphony to describe little, if any, time or energy getting to your business model to create key an organization and parallels an know them personally. leadership learning opportunities and orchestra conductor to a business Some coaches think: “These guys a LD model that speaks to your lead- leader. Programs like these are excep- are professionals—they don’t need ers. When creating our LD model at tional at blending executive interests anything special from me.” Remember QUALCOMM, we used the term “3G and providing a solid LD lesson. that they are referring to young men in leaders” to describe our top leadership 4. Prove the worth of your leader- their early twenties who are living on talent or high potentials. The business ship development efforts. You do this, their own for the first time and feel was focused on 3rd Generation (3G) of course, by playing the ROI numbers surprisingly alone, even with all the wireless technology, and so we capital- game (a game worth playing, since fan attention. ized on the term, enabling us to have CFOs often target development pro- Many actors and entertainers can’t success with our engineering and busi- grams in budget reviews), but you also reconcile their celebrity and wealth with ness leaders. Since business models need to show videos, tell stories, and the fact that they see their work as being suggest what is important to a compa- share anecdotes. These and other somewhat unimportant, in terms of ny and its leaders, use them wisely. strategies keep LD top of mind. impacting the lives of others. Perhaps 2. Build the leadership development Focus your time, effort, and invest- that’s why many of them get involved brand. Many companies do an excel- ments on creating LD initiatives that in charitable causes or politics—it gives lent job of developing leaders and impact the leadership capabilities of them a sense of purpose. LE building the leadership brand. Inside your company. LE and outside of General Electric, for Patrick Lencioni is the author of The Three Signs of a Tamar Elkeles, Ph.D. is the author of the book The CLO’s Role: Miserable Job and The Five Dysfunctions of a Team. He pro- example, people are aware of their Driving Value Within a Changing Organization Through vides products and services to improve teamwork and effective- exceptional Leadership Development Learning and Development and is the VP of Learning and Development at QUALCOMM. ness. Visit www.tablegroup.com. Center. This benefits GE by demon- ACTION: Cultivate job satisfaction. strating that they value leadership ACTION: Use these four strategies in your LD. 6 Leadership Excellence LEADERSHIP DEVELOPMENT 6.0 In this stage, LD is linked to the that in turn led to a 0.5% greater key business results and strategies. The increase in store sales. The behaviors Leadership effectiveness of LD efforts are mea- that most influence employee commit- sured by their impact on those results. ment have to do with inspiring people, Development 6.0 The first step is to clearly define providing clear direction, and setting Connect LD with drivers of results. desired results so that LD can be tai- stretch goals. Knowing this, we lored to achieve them. Some directors focused LD efforts on expanding these embark on a major LD effort without positive behaviors, practicing these clearly stating the objective or desired skills, and devising ways for following outcomes. Without clarity of purpose, up on practicing new behaviors. you can’t evaluate the effectiveness. Case study on improved decision- Why is the connection between LD making. One client concluded that and strategy/results often ignored? leadership decisiveness (effective deci- Few organizations make this connec- sion-making techniques and prompt by Jack Zenger and Joe Folkman tion, and this disconnect is hard to jus- decisions) was a key to high perfor- tify ($110 billion was spent on learning mance. We developed questions to S WE SEEK TO IMPROVE OUR LEADER- and development in the U.S. last year, measure the decision-making quality Aship development (LD) programs and $21 billion was spent on LD). (as seen by the people who reported to and initiatives, we would benefit from This connection is rarely made for the leader). We then determined those a more “evidence-based” approach. five reasons: 1) Much executive educa- behaviors that most highly correlated Most HR directors and business tion and LD are supplied with “effective decision- leaders are familiar with a variety of by universities, and since making.” The top five LD activities, ranging from university participants come from var- behaviors were: 1) has the MBA courses to swinging from ropes ious companies, it’s difficult courage to make the and kayaking in white-water rapids. to link the learning objec- needed changes; 2) makes The question is: “Which activities pro- tives to a strategy or busi- the difficult decisions duce real value?” The truth is, we don’t ness outcomes; 2) LD is required to implement know. Leadership practitioners believe often driven by past needs, strategy; 3) makes deci- each program has value, but there is not future needs, so areas sions and moves forward little or no research to confirm which where organizations need to in the face of constant ones teach important lessons that stick excel going forward are rarely change; 4) makes high- with participants and get applied. identified; 3) LD is a staff quality decisions by Our premise is this: You’ll better function, and HR directors are rarely engaging the right people and using develop your leaders by engaging in privy to the strategic thinking of line the right methods; 5) inspires others to evidence-based research and practice. executives; 4) The idea that LD can high effort and performance. We creat- First, let’s review how the field of directly target business strategies is ed a LD plan around these five behav- leadership development has evolved. foreign to most line managers; and 5) iors and experiences to make these 1.0 LD began in 1950s when busi- There are few practical ways to link operational and measurable with spe- ness schools began teaching leader- LD with business strategy and results. cific methods for following up. ship to balance the need to treat people While we’re still exploring the pay- well with the need to obtain results. Four Steps in Two Cases back from this LD approach, initial 2.0 This stage recognized the need How can you best connect LD to results are promising. For example, in to move LD from a cognitive exercise drivers of desired business results? We the organization that sought to to behaviors or skills-based approach. suggest four steps: 1) include desired improve decision-making, each leader Ideas had to be put into action. outcome measures in the LD tools; 2) had a personal action plan (PAP) and 3.0 Improved teaching and highly identify the leadership behaviors that the senior leadership team identified engaging learning methods came into drive these outcomes; 3) provide LD five issues that cut across the division. vogue. These included case studies, that magnifies these key behaviors; Because each manager received indi- lab learning, action learning, simula- and 4) establish practical methods for vidual assessments on their decision- tions, rehearsal of challenging interac- following up with participants. making effectiveness and their tions, and small-group discussion. Two cases studies show how to effectiveness on specific leadership 4.0 LD adopted new technologies, apply this approach: behaviors, each person created a PAP including e-learning, to enable large, Case study on employee commit- to improve personal decision-making. widely distributed populations to be ment. Our first foray into making this Leadership 6.0 identifies specific reached economically. direct link between LD and results outcomes along with behaviors that 5.0 LD shifted control and responsibili- began when we included an “out- produce desired outcomes. It brings ty for learning and development to the come” measure into our standard 360- tools to measure important results (or individual. The LD process became degree feedback process. Our research the drivers of those results). It creates a more personalized, with individuals revealed that effective leadership visible, measurable link between LD tailoring their development to their behavior is highly correlated with activities and desired results, enabling individual needs. employee commitment and customer us to identify and discard the duds. LE We are now poised for the next satisfaction. For example, Sears found John H. Zenger is CEO and Joe Folkman is president of phase in this evolution—evaluating that a 5% improvement in employee Zenger|Folkman, a leadership performance consultancy. Call LD efforts by their direct impact on commitment measures led to a 1.3% 801.705.9375, email [email protected], or visit www.zfco.com. business results. improvement in customer satisfaction, ACTION: Link LD activities with results. Leadership Excellence 7 LEADERSHIP EFFECTIVENESS understanding, feedback, and skill building. What do you hope to devel- op in your leaders? Effective Leadership 4. What sources of learning will you use? Sources of learning include 360- Assess how well you are developing your leaders. feedback, classroom, e-learning, execu- tive coaching, action learning, job enlargement, mentoring, and develop- by Scott J. Allen elected president at a time (context) mental job assignments. when his personal attributes and mes- 5. How will the LD program link to sage aligned with that being sought by our systems? For instance, performance FFECTIVE LEADERSHIP people (followers). Were he to seek management systems can link to LD. Eis elusive. It’s like election today, he would need to align Other examples of business systems when we are moved his message with issues that mesh with may include staffing, succession plan- by an incredible performer. Beyond our current reality. Martin Luther King ning and personal development plans. knowing we’ve been moved, we can’t Jr. had a wonderful message, but had 6. How are we doing at this point? say why—since describing why we he lived 50 years earlier (context), he Create a report with five columns relat- are moved requires another level of could not have delivered it at the steps ed to the first five questions. List the awareness. In the end, the perfor- of the Lincoln Memorial. This is why major components for each. Place this mance resonates with some and not people who have great success as lead- information in one location where pro- others. What moves one person to ers in one context might fail in others. gram architects can review it before tears may have little effect on another. Self-awareness is foundational for answering Question 6. In many ways, leadership is similar. effective leadership, along with the 7. How will we gain feedback from Here are three reasons leadership ability to communicate a vision and others? Float the draft program by oth- can be so elusive. help others see how they fit into that ers and seek their feedback. Ask: What 1. We can’t easily agree on what vision. Relationships are at the root of challenges do you see with our LD leadership means. Most definitions of effective leadership. Leaders connect plan? How should we market and leadership assume that it involves and establish a relationship with peo- implement this program? What have exerting intentional influence to guide you seen fail and why? Does the cul- or facilitate activities and relationships ture value what we hope to produce? in a group. Influence, more than coer- 8. How will the program be imple- cion, is the measure, since followers mented? Ensure the implementation usually have a choice in whether or strategy is realistic and manageable. not to follow the leader. Leaders influ- You can roll out the program in three ence followers to bring about results primary ways: Pilot—a pilot program that reflect their mutual purposes. is relatively safe and manageable, but Still, we all construe what it means to takes extra time. Gradual Implementation be an “effective leader” differently. —this involves more people quickly, Some may value a leader who yields but invites unforeseen “fires” that need results, while another may want a to worked through. Full Implementation leader who makes them feel good. —this involves the entire organization. Some want both! In part, the leader ple who believe that the leader has 9. How will we market the LD pro- needs to understand how followers their best interest at heart. Effective gram? Communicating to your entire value and construe effective leader- leaders intentionally change their workforce is a challenge. Work closely ship to be seen as effective. approach in new contexts, being very with marketing to craft an approach 2. We construe “how” to best lead directive with some employees while and determine which large-scale com- others differently. For example, some actively coaching others. munications might work best. people dislike the coaching style of 10. How will the training be deliv- Bobby Knight, viewing it as demean- Assess Your Leader Development ered? Catering to one style of learning ing, belittling, or unprofessional. They For your LD program to take root in and one teaching methodology is a might ask, “Did he need to throw a the culture and achieve desired results, sure way to fail. You need to place par- chair to make his point?” Others feel you need to address 11 questions: ticipants into the hands of quality that his behavior is okay since it yields 1. How does the program link to instructors who quickly connect and results (wins games), and “how he strategic objectives and goals? Why gain credibility. Participants must feel gets there” is less important. We all and how will LD help us get where we that the LD will help them in their roles. define effective leader behaviors dif- want to go and meet our objectives? 11. How will you evaluate/show ferently. Some may not mind a “com- 2. How are we defining leadership ROI? How will decision-makers deter- mand and control” approach while and leadership development? LD initia- mine the success of the program? Ask others appreciate a coaching or “sup- tives should rest on a solid theory of decision makers what they think. portive” approach. Leaders who excel authentic leadership principles and These questions enable you to create at one approach tend to struggle when practices that provides the roadmap for a powerful LD program. LE switching to a different approach. what you hope to develop in others. Scott J. Allen, Ph.D., is president of the Center for Leader 3. Leadership is a relationship 3. What are the competencies/skills Development. Email [email protected] or visit www.centerfor- between the leader, follower, and con- you hope to develop? Most LD training leaderdevelopment.com or call 216-224-7072. text. For example, Ronald Reagan was includes personal growth, conceptual ACTION: Assess your leadership development. 8 Leadership Excellence COMPETENCY INFLUENCE just restructure, or just implement a new performance management pro- gram, behavior will change. The first thing to look at in influenc- Master Influencers ing someone is motivation—does the They have the power to change. person want to do the vital behavior? Next look at ability—is the person able to do the vital behavior? A person by Ron McMillan How do they do it? Gifted change must be both willing and able to do agents know that to have great lever- the behavior for it to be adopted. age in solving problems, you must Three areas of influence impact E ARE SURROUNDED focus on changing a few high-leverage people’s motivation and ability: per- Wby profound, vital behaviors. Jack Welch understood sonal, social, and structural. All three pervasive, and persis- the power of vital behaviors when he make up the Six Sources of Influence. tent problems—AIDS, poverty, global spent decades trying to foster candid Source 1: Personal motivation. Does warming, drug addiction, crime, and open dialogue at General Electric. the individual want to do the vital divorce, obesity—problems so com- His belief was that this one behavior behavior? Influencers connect vital plex that they leave us feeling baffled. would profoundly affect many other behaviors to intrinsic motives so the Our workplaces are not immune. behaviors for the better. And it did. individual enjoys doing it or links it to As leaders, we develop compelling In a quest to eradicate the world’s important purposes. strategies that are certain to capture largest human parasite, the Guinea Source 2: Personal ability. Does the market share or increase sales; but worm, from the West Asian and sub- individual have the knowledge, exper- then people fail to execute the plan (85 Saharan world, Donald Hopkins and tise, acumen, or emotional strength to percent of all major projects and initia- his team at the Carter Center realized do the behavior? Influencers educate, tives fail to achieve the desired objec- they could eradicate the worm from train, and apply deliberate practice. tives on time and on budget). any water source or village by focus- Source 3: Social motivation. How do As leaders, when we face such ing on three vital behaviors: 1) All vil- others affect motivation? Does peer results, we panic. We scramble to lagers must filter their water; 2) pressure or the boss’s opinion affect the backfill, outsource, restructure, reorga- person’s desire to do the vital behav- nize, and plug the gaps. We may try, iors? Influencers enlist the support of heroically, to treat the symptoms, but opinion leaders and formal leaders. despite our interventions, the pro- Source 4: Social ability. Do others found, pervasive problems persist. help or hinder the individual’s perfor- How do we deal with these prob- mance of the vital behaviors? Do they lems? We cope. When our repeated provide resources or create barriers? attempts at change fail, we settle for Influencers enlist the help of others, things as they are. When things don’t including coaches and mentors, during change, it’s not necessarily because we crucial moments in changing habits. lack the courage to change them. Source 5: Structural motivation. Often we lack the skill. How do the external motivators (like Fortunately, we can learn from gift- pay, recognition, and reward systems) ed change agents and influence mas- Anyone who has a guinea worm must affect the individual’s motivation? ters. Consider a few examples. stay away from the water source; and What costs are associated with the • Mimi Silbert of the Delancey Street 3) Each villager must candidly con- behavior? Influencers align structural Foundation has rehabilitated 14,000 front anyone who does not comply factors to reward and encourage the hardened criminals (drug addicts, with the first two behaviors. If every individual’s motivation to enact the gang members, thieves, and prosti- villager would enact these three vital vital behaviors. tutes) with 10 percent recidivism rates behaviors consistently for a year, the Source 6: Structural ability. How do (California’s rate is 70 percent). life-cycle would be broken and the the non-human factors (environment, • Mike Miller doubled productivity guinea worm eradicated! structures, policies, systems, and in the Sprint IT Department and However, the influence process resources) affect the person’s ability to improved systems availability for the does not stop at identifying the vital do the behavior? Influencers make end user by 90 percent. behaviors. Now the influencers must good behaviors easier and bad behav- • Don Hopkins of The Carter Center ensure that everyone engages in the iors harder through use of physical has decreased the impact of one of the vital behaviors—every time, all the surroundings, cues, and information. largest human parasites—reducing time—and without exception. How do Influencers identify the vital behav- cases from 3.5 million to less than the Influencers accomplish this seem- iors that will produce desired results. 10,000 without traditional medicines ingly impossible feat and get people to They then use Six Sources of Influence or a vaccine (a 99.7 percent drop)! adopt the vital behaviors? to ensure that people enact the vital • Don Berwick of the Institute for behaviors every time. In this way, Healthcare Improvement waged a bat- Six Sources of Influence problems give way to solutions. LE tle against medical errors and is credit- Six sources of influence drive our Ron McMillan is coauthor of Influencer: The Power to Change ed for saving more than 122,000 lives in behavior—and if we hope to increase Anything, (McGraw-Hill) and Crucial Conversations. He is 18 months. He’s now launched a cam- our influence, we must be adept at also a speaker, consultant and cofounder of VitalSmarts, an paign to prevent five million cases of employing these sources. Often we innovator in corporate training and performance. preventable deaths, and getting it done. assume that if we just train people, or ACTION: Become a master influencer. Leadership Excellence 9 MANAGEMENT MOTIVATION launched a series of informal, interac- tive discussions, involving hundreds of people, to reexamine Aetna’s values. At Peak Performance the end of every session, detailed feed- Seek and gain the informal advantage. back was developed as to how to bring these values to life again and reflect the ity and disaggregate challenges of scale new marketplace realities. These ses- and global diversity. Yet GM’s perfor- sions provided a process for engaging, mance over the last 10 years has been energizing, and co-opting people at all disappointing. It appears that the infor- levels. The feedback formed the basis mal construct is missing. However, a for a comprehensive value statement closer look in certain high-performing that became known as “The Aetna areas suggests a less obvious answer. Way” and led Aetna’s culture through by Zia Khan and Jon Katzenbach At the plant level, we find many the difficult turnaround years. examples of leaders who use the infor- One compelling moment occurred VERY ORGANIZATION HAS BOTH FORMAL mal elements to motivate their people early in the transformation when Eand informal sides. The formal is to higher performance. We probed the Rowe, Ron Williams, and their senior well documented—you find it in behaviors of over 20 plant managers team were explaining the new strategy strategic plans, structural charts, whose employees were emotionally to several hundred Aetna people in a processes, plans, metrics and pro- committed in ways that generated logical, analytical way. At the conclu- grams. But, the informal side consists higher performance. In each case, their sion, Rowe took questions. One came of behavioral influences that reside in “secret” was using different elements from a long-service employee named people’s hearts, mind-sets, relation- of their informal organization to instill Jeanne: “Dr. Rowe, what does all this ships, interactions, and emotions. pride in the work (easier said than mean for someone like me?” The informal organization influ- done, since GM leadership is focused Rowe mulled over his answer: ences behaviors when and where the mainly on the formal elements). “Jeanne, I guess it is all about restoring formal cannot. Organizations that The emotional commitment that the Aetna Pride.” Rowe received a integrate and balance the informal spontaneous, standing ovation, and with the formal have “the informal that simple, almost accidental notion advantage”. They deliberately manage became the overriding theme that their culture, networks, communities, energized people. That’s how the infor- and source of pride to achieve higher mal organization works when it works. performance in a way that balances their formal organization. The Need for Balance When Jim Rogers was president of In peak-performing organizations, GE’s Electric Motors and Industrial leaders pay as much attention to ele- Systems business, we asked him for a ments of their informal organization as copy of his formal organization chart. they do the formal. They sense that When he couldn’t come up with it, he unless they influence and mobilize the said: “I know it’s here somewhere informal elements, they won’t sustain because I send a copy to corporate yields peak performance requires the the emotional commitment that peak every year. But I never use it because formal and the informal to re-enforce performance requires. In start-up ven- it’s not how things really work here.” and balance one another. Such com- tures, the informal construct predomi- In Jim’s case, what’s on paper doesn’t mitment helps people energetically nates and actively resists any increase determine how people collaborate, pursue innovations, collaborate pro- in formal process and structure—until what values guide their decisions, or ductively in teams, and provide supe- scale and complexity threaten to over- what motivates their performance. rior customer service. Whereas most whelm it and therefore demand the managers over-rely on the formal, the efficiency, predictability, and control General Motors’ Imbalance master motivators work to keep the that the formal organization provides. GM represents a classic example of informal in balance. They find a way In large enterprises like GM, over-emphasis on the formal organi- to capitalize on informal elements to because of scale and complexity, the zation. In 2003, GM looked like most keep people feeling good about the formal elements often drive the infor- large enterprises; their formal con- work they do. Simply put, they do mal underground. Realizing the infor- struct was well-developed and docu- what most good managers do not do. mal advantage lies in integrating the mented, and rigorously enforced. informal organization with the formal Their strategy, structure, and process- Aetna’s Informal Secret organization. The required balance can es were well-designed and followed. Aetna’s turnaround between 2002 shift over time—a startup’s needs are Their “balanced scorecard” of over 20 and 2007 is well documented on the different than a global enterprises—but distinct measures defined manufactur- formal side. But CEO Jack Rowe also both need to be considered to realize ing excellence. They were the poster knew the importance of creating a breakthroughs in performance. LE child for the decentralized philosophy strong, engaged culture during their Zia Khan is a principal and Jon R. Katzenbach is senior partner in that Alfred Sloan developed 70 years turnaround. He realized that he would Katzenbach Partners. They are coauthors of The Informal ago. Many large organizations still need to engage the informal as well as Advantage (how to achieve performance breakthroughs). Email draw upon GM’s decentralized model the formal organization to reshape [email protected] or [email protected]. as they pursue individual accountabil- Aetna’s legacy culture. So, Rowe ACTION: Gain the informal advantage. 10 Leadership Excellence CHANGE TRUST dence in their judgment and ability. and why a new course is mandated or Few attributes are as closely associ- may be beneficial. Course Correction ated with effective leadership as deci- 2. Find a positive framing for the Sustain trust during change. siveness. Particularly in moments of change. On occasion, an unexpected opportunity or crisis, we expect our change of policy or direction can even leaders to take swift, sure action—and set the stage for great achievement by by Roderick Kramer then to remain steadfast on their cho- dramatically recasting an earlier issue sen course of action. We like to think or decision. Ronald Reagan rode into that our leaders are of firm grasp and the White House denouncing the RUST IS AN IMPORTANT sure vision. History celebrates leaders Soviet Union as an evil empire. But he Tasset for a leader— who display “grace under pressure.” articulated a new vision toward the it’s the “coin of the In the media, flip-flopping is often end of his administration, and began to realm.” When leaders are trusted, peo- demonized. During the 2004 U.S. presi- work closely with Mikhail Gorbachev ple are more likely to accept what they dential campaign, charges of flip-flop- to help bring an end to the Cold War. say at face value, accept directives, and ping dogged John Kerry. The 3. Changing course also requires self- defer to leaders’ judgments. Trust implication was we couldn’t (and trust. Changing course isn’t easy. greatly reduces the transaction costs of shouldn’t) trust a man who flips his Leaders face formidable pressures to leading—to the benefit of both leaders position. More recently, the tag “flip- stand by their decisions. In anxious and all stakeholders. Trust builds rep- flopper” has been placed on Senator times, we yearn for consistency and utational capital on which a leader can Hilary Clinton over her position on the predictability. We seem to want, and to draw when trying to get work done. Iraq war. Today, it seems the respond best, to those lead- Since trust is vital to effective lead- worst thing leaders can do ers who are consistent and ership, how do you best build trust, is change their minds. steadfast in their views and communicate trustworthiness, and I find that notion worri- vision. Leaders can be repair trust when it is threatened or some. Leaders must be able uncomfortable with incon- damaged? When it comes to getting to flip-flop without fear, sistency—it can cause them advice on how to create and sustain especially when the pace of to experience doubt, trust, leaders can turn to many sources. change—and the onslaught because it calls into ques- Fortunately, we know a great deal of fresh information regard- tion aspects of their core about the conditions under which ing emerging threats—con- identity or values. Most trust flourishes or withers. The compo- fronts leaders with calls for leaders want to appear nents that contribute to trust include: urgent response and contin- strong, resolute, and unwa- 1) trust in the leader’s intentions and ual innovation when adjusting to vering. They care about their images. motives—we tend to trust leaders changed circumstances. Since leaders’ decisions are often pub- when we have confidence in the Flip-flopping is not the same as inde- lic events, it makes reversing course benevolence of their motives, and cision. Indecision reflects the inability of difficult. In the media, every decision is when we think they have our interests a leader to arrive at a decision. Certainly subject to endless scrutiny and replay. and welfare at heart; and 2) trust in the no one admires leaders who sit on the 4. Have the confidence and courage leader’s competence, confidence in fence, torn by doubt and indecision, to recognize that changing your mind their ability to carry out their fiduciary pondering options and drawing careful does not signal an inability to lead. responsibilities, and their capacity to decision trees while the moment of deci- Rather, it signals your ability to learn follow through on their promises and sion passes. But changing your mind from experience, and to adapt to cir- commitments. Even if we have confi- means altering your stance after an ini- cumstances. In today’s world, in which dence in a leader’s good intentions, if tial decision has been made. In many leaders can face, on a moment’s notice, we don’t think they are competent we situations, changing direction is simply changed circumstances, the ability to won’t trust them deeply or for long. the right course of action. Obviously, change course while maintaining trust When either component is missing, leaders should flip when they feel that is essential. Foolish consistency really trust in a leader remains problematic. they’ve made the wrong decision. is the hobgoblin of small minds—and One occasion that prompts con- that’s foolishness we can ill afford. cerns about the stability or consistency Five Tips to Maintain Trust 5. Build your credibility. Since lead- of a leader’s intentions and motives How can you change your mind ers need the option to re-decide, they (as well as their competence) is when a and course without losing others’ trust should lay the groundwork for rever- leader seems to “flip-flop” on impor- in your commitments, judgment, and sals well in advance by building credi- tant issues. Flip-flopping (or even the competence? Here are five tips: bility. Leaders need to explain the appearance of it) raises doubts about a 1. Maintain transparency with respect motives and intentions behind their leader’s foresight in leading us into a to your decisions and the motives behind change of course in ways that are com- situation or steadfastness when the them. Tom Meholn of North American pelling and reassuring. If done well, going gets tough. Indeed, the indict- Tool and Die Corporation noted that to they send a powerful message to all ment of being a “cut and run” leader be trusted, you had to be open and up stakeholders that they aren’t afraid to can be damning for those leaders hop- front about every decision, every day, take a second look at any decision and ing to retain their credibility. with every employee and every cus- to change their mind when it is in So, how can leaders maintain trust tomer, no matter how big or small the everyone’s long-term interests. LE while changing course? Leaders need decision or issue. To achieve transparen- Roderick M. Kramer is a professor of management at Stanford to skillfully frame and justify changes cy, leaders should openly and honestly GSB. Email [email protected]. of course to sustain people’s confi- explain what’s changed their minds, ACTION: Maintain trust during transitions. Leadership Excellence 11 LEADERSHIP DEVELOPMENT tap, orchestrate and use the talents and skills of their teams. They’re support- ers, resource-providers, obstacle- Why Develop Leaders? removers, facilitators, and team- builders. The mark of an excellent Small pebbles can have big ripples. leader is the performance of the team! 4. Keep the fires burning. When growth stops, people lose motivation by Michael G. Winston capital, especially during tough times, and energy. Individuals identified as pays huge dividends. Clearly, compa- marginal performers need to receive nies that continue to invest in their tal- special management attention. Perform- IGH PERFORMANCE ent are better positioned to take ance is a function of goal clarity, sup- Hleaders are distin- advantage of recovering markets. They portive structure, adequate resources, guished by a set of invest time and money planning for required skills, performance-enhancing core beliefs and actions. They believe the future—selecting, training, and feedback, motivation, and relationships that a business rises and falls on the retaining the next generation of lead- with supervisors. Instead of eliminating strength of its leaders at all levels. ers. By staying committed to high per- plateaued managers, ask: How can we They identify, attract, and retain the formance succession and LD practices, keep them motivated? Continuing most talented, diverse group of high TGE, Pepsi, Motorola, Goldman Sachs, opportunity keeps people working with performers. They understand the core and HP have strengthened their posi- high effort and enthusiasm. competencies and skills required to tion in attracting and retaining top tal- 5. Culture counts, especially during meet challenging goals and surround ent, making them talent magnets. tough times. Business flows in cycles, themselves with highly capable staff. 2. Build leadership excellence, even and the best leaders are constantly These leaders encourage develop- in challenging times. High-performing searching for market opportunities and ment by rewarding excellence, serving organizations recruit top talent and threats and take quick, creative action, as role models, and encouraging per- place them on focused, driven teams. allocating resources (time, talent and sonal and professional growth. They They let their skills, drive, intelligence, capital) to pursue opportunities. De- push decision-making down and and creativity come to the fore. They cisions are made quickly, and vision is develop people’s confidence in their translated into action. During constant ability to lead, manage, and impact change, the ability to learn faster is a outcomes. They allocate authority and source of competitive advantage. resources to enable people to make 6. Paying attention to human capi- decisions and act independently with- tal pays off on the bottom line. We see in their area of responsibility. a strong correlation between compa- They believe in the strength, capac- nies listed as “Best Places to Work” ity and potential for growth and con- and superior business performance. tribution of their people, and by Firms with well-designed succession translating their commitment to con- planning and LD programs for the top sistent, purposeful action, even under three levels of management enjoy a fire, they pass the test of true leader- clear advantage. When you invest in ship. They view the cost of LD as an train them and focus their energy on your people, you invest in your suc- investment. The impact of their deci- rewarding challenges. They give them cess: productivity, employee satisfac- sion to develop their human capital is the place, space, knowledge, and tion, and financial performance rise. enormous. It is like when a small peb- chance to excel. They build a leader- TRW offers quality LD programs; ble makes a big ripple on a still lake. ship team across boundaries of func- HP has phenomenal on-line learning. For years, we’ve talked about the tion, geography, and business with a 7. Stand up for your beliefs. The War War for Talent. We revised vision state- clear, common vision and strategy. for Talent will be won by organizations ments to emphasize acquiring, devel- The LD programs at UBS, GE, and that believe in the strength, capacity, oping, and retaining talent, promising Dell use a combination of presenters, potential for growth and contribution to create a high-performance culture. learning technologies, and post-pro- of their people, and have the courage Yet, in challenging times, such promis- gram project work to reinforce strate- and commitment to keep their promis- es are rarely kept, as people are often gic initiatives. When leaders train and es through thick and thin and do the treated as liabilities. When leaders work together, they gain common right thing for their employees, brands, restructure, reduce discretionary vocabulary, shared skill-building, and company and society, even when pro- spending, defer product development, stronger reinforcement and teams. fessional and social risks or economic out-source manufacturing, pursue vol- 3. Bring in the best people and bring pressures confront them. This principle untary retirements and resort to lay- out the best in people. There is nothing anchors their beliefs and behaviors. offs, the War for Talent gets lost. wrong with your people that can’t be The only sustainable source of com- fixed by what is right with your peo- petitive advantage is the capacity of Seven Lessons to Be Learned ple. Leading companies identify and your people to learn, grow, and out- Here are seven lessons: build on strengths. They find and nur- perform the competition. LE 1. Success over time hinges on the ture champions, create compelling Michael G. Winston is strategist of transformation. He has top- quality of leadership. Organizations goals and direction, build skills, and level experience in five Fortune 100 Companies. Visit that invest in leadership outperform spread enthusiasm. They encourage, www.michaelgwinston.com. the field. Paying attention to human excite, teach, listen and facilitate. They ACTION: Excel in your leadership development. 12 Leadership Excellence LEADERSHIP DEVELOPMENT oversees Carnival College of Manage- ment for new and mid-level shipboard Leadership Development management. Our senior management is involved in program development, On the move at Carnival Cruise Lines. providing input and prioritizing prac- tices. They are typically the first to examine and participate in new pro- Take Three Steps! by Eileen Tighe grams. They also serve as instructors On its path to training excellence, and advocates for learning by sharing Carnival has implemented three steps: their experience and expertise. Depart- ARNIVAL CRUISE 1. Focus. In 1994, at the directive of ment heads—including captains, chief CLines, the largest Carnival’s president, the company’s engineers, and hotel directors—facili- and most popular vision was defined: “To consistently tate several key programs, including cruise operator, carries 3.6 million provide quality cruise vacations that the Carnival College of Management. guests a year and achieves a 98.3 per- exceed the expectation of our guests.” Also, each ship houses a Crew cent satisfaction rating. Founded with This vision was carried to the entire Training Center that hosts computer- a single ship in 1972, Carnival revolu- Carnival team—not just to memorize it based, instructor-led training and a tionized the cruise industry with the but also to personalize it. Team mem- library of resources. An international “Fun Ship” concept; for the past 35 bers attended a session that was all team of 50 shipboard trainers oversee years, the line has been synonymous about them. Activities included focus- training and operation of the facilities. with quality, value, and fun. Today we ing on personal and professional goals We evaluate the effectiveness of our are more dedicated than ever to pro- and how their service role impacts our training by using the International viding cruise vacations that exceed the guests and can advance their goals. Maritime Organization, flag state and expectations of our guests. With a fleet 2. Invest. In 1995, Carnival’s presi- U.S. regulatory bodies’ standards and of 22 state-of-the-art vessels and three dent established corporate training to regulations, adult learning principles, new ships on order, Carnival continues enhance guests’ vacation experience by the Kirkpatrick Four Level Evaluation to reach new heights. With the U.S. providing employees with innovative Model, and other responsiveness, contex- debut of its “Fun Ship,” the 110,000-ton and relevant professional development tual, and evaluative inquiry methods. Carnival Freedom, Carnival will bolster 3. Listen. At the directive of our pres- its record-breaking 2007 Caribbean ident and senior VP of training, a cruise season when it will carry 3 mil- Carnival’s Crew Comment Card system lion guests within that region alone. was established to provide crews with One constant is the friendly and a platform to voice their opinions and attentive service we provide our val- offer suggestions. Team members and ued guests. Carnival employs 36,500 guests provide feedback on the effec- shipboard and shoreside employees tiveness of Carnival’s leadership devel- who come from more than 100 coun- opment—guests via comment cards at tries, with highly diverse skill sets and the end of the cruise, and crews working in constantly moving delivery through bi-annual comment cards. locations operating on a 24/7 schedule. Based on ratings from these cards, With capacity between 1,800 and Carnival presents two “EAGLE” 3,700 guests and crew counts between while emphasizing safety and regulato- awards—one to the top ship for guest 660 and 1,200, each ship is like a small ry issues and hospitality. Training also service, and the other to the top ship for city, and operations require skilled oversees the weekly e-publication, outstanding work environment, taking craftsmen, highly trained deck and eSeaview, and quarterly 36-page Seaview into account management, leadership, engine officers, and medical and safety Magazine, and Carnival Corporate quality of life, and recreation. personnel. There are also chefs, house- University, a program in which groups A 10-member quality assurance team keeping staff, service personnel, enter- sail aboard the line’s ships and partici- comprised of senior managers reviews tainers, and the shoreside counterparts. pate in fun, interactive professional- all comment card results to enhance How do we keep such a diverse, development workshops and seminars. product quality for guests and the quali- service-oriented team motivated and This training has enhanced commu- ty of shipboard life for Carnival provide opportunities to continue pro- nication shoreside and shipboard. We employees. The QA team visits all 22 fessional development? Our award- believe that the learning that takes place Carnival ships, and hosts discussions winning training provides a variety of is proportional to the fun people have. with all shipboard department heads. A required safety training, as well as hos- One effective program is “Coaching highlight of these visits is Share the pitality and management training to the Champions,” a high-impact devel- Vision, a state-of-the-company presenta- our diverse and varied workforce. opment program for managers, high tion open to all shipboard team mem- We are sharing our training exper- potentials, and senior leadership. bers to participate in Q&A sessions. tise in our new guide, SAIL (Strategic Despite the challenges of bringing Since LD is vital to our success, we Alignment Involving Leadership) Carnival, people together in one location, over the will keep introducing effective LD ini- which details our efforts to achieve past 10 years, the program has trained tiatives into our operations. LE quality and support the growth and 700 managers each summer. Sessions are development of a global workforce held in a land-based location for week- Eileen Tighe, CTC, is Corporate Training Manager for Carnival Cruise Lines. Visit www.carnival.com. based on facilitating continued devel- long seminars, simulations and team opment of our leadership team. development activities. Training also ACTION: Sail away in your LD program. Leadership Excellence 13 MANAGEMENT EXECUTION guish itself from others with similar corporations came under pressure to offerings and goals, and maintain its save money, the inertia of staying with success over time? Answering these old suppliers became a luxury few Customer Economy questions is the management agenda. could afford. As a result, customers Get serious about business. Each generation of managers must now seek alternatives, compare offers, find its own direction. In recent years, and hold out for the best option. customers have revolted against their Customer power surged as many by Michael Hammer suppliers, abandoned companies to products became virtual commodities. whose brands they had been loyal, When technology evolves slowly, and embraced generics, house brands, products remain different for long EADERS AGAIN MUST international competitors, and anyone periods. Each product has strengths Ltake “mundane” who offered a better deal. Customers and weaknesses that make it the best issues like cost, quality, stopped tolerating abuse from suppli- choice for some customers and a poor and service seriously, as they can no ers who condescended to fill their choice for others. Rapid changes in longer take stock market increases orders. They refused to accept high technology shorten product life-cycles. and growth for granted. They must prices, low quality, and dreadful ser- New products soon become obsolete worry whether customers will buy, vice. Instead, customers now instruct or imitated. Many similar offerings costs will rise, or competitors will their suppliers regarding the prices make it difficult to differentiate—and overtake them. They now see that they will pay, the quality they require, this further empowers customers. growth has to be created, that most and even when they’ll accept delivery. For example, today, some 25 car new ideas fail, that resources are Executives of even the most power- companies compete for your business. always scarce, and that business is not ful companies now tremble before A host of information sources prepare a game for giddy amateurs. their independent and demanding cus- you to bargain with the dealer from a Business is about execution—not tomers. They know customers have position of knowledge and strength. just about having the right business the power and that they will use it. Now you have the upper hand, and model, capturing eyeballs, creating a the automakers and dealers know it. cool work space. Bereft of inflated The new customer economy is still stock market evaluations, managers gathering steam, as there’s no foresee- realize that it’s not enough to get the able end to increases in global competi- order, you have to fill it; that having an tion, overcapacity, commoditization, idea for a product does you no good if customer knowledge, or to the cus- you can’t develop and deliver it. tomer power that flows from them. The halcyon days of the 1990s were As the customer economy unfolded, an aberration. Tough times are the organizations sought managerial inno- norm. In normal times, managers vation, creating and deploying new must wrest market share from their ways of operating: just-in-time inven- competitors, motivate customers to tory management; TQM and six-sigma part with scarce cash, earn success quality; cross-functional teams; portfo- instead of having it handed to them, Welcome to the customer economy. lio management and stage gates in and wake up each morning knowing How did this customer power arise? product development; supply chain that yesterday’s accomplishments First, scarcity gave way to abundance, integration, including vendor-man- count for nothing today. as supply overtook and exceeded aged inventories and collaborative Management is one of the most demand. Advancing technology dra- planning and forecasting; perfor- complex, risky, and uncertain of activ- matically increased manufacturing mance-linked compensation; compe- ity. How could anyone have thought productivity and reduced the costs of tency profiling in HR; measurement otherwise? If managing were simple, entry to and expansion in many indus- systems based on economic value why do most businesses fail? Why do tries. Companies expanded capacity to added or balanced scorecards; cus- so many new products founder? Why build market share. And globalization tomer-supplier partnerships; and busi- do great companies sustain success for led to more competitors pursuing the ness process reengineering. such a short time? Why are leading same customers. This increase in sup- These innovations were first deploy- companies overtaken by upstarts? ply inevitably put customers in the ed in industries that felt the brunt of Why do so many managers struggle driver’s seat. Customers are no longer the new customer economy—automo- to replicate their success when they supplicants for scarce goods; roles biles, electronics, computers—and then change companies? Why do so many have changed, and sellers have spread to other sectors. Because of fall prey to hucksters, fads, and super- become supplicants for scarce buyers. these changes, we weathered the first ficial and simplistic remedies? Customers have become more wave of customer ascendancy. Firms The challenges of management are sophisticated and informed buyers. that crumbled before the onslaught of extraordinarily difficult. How can a Customer servitude ended when it demanding customers and tough new company devise products and ser- became practical for them to take competitors used new management vices that satisfy customers, and then advantage of alternatives. Information methods to claw their way back. Start- create and deliver them in a profitable technology (including the Internet) up businesses that embodied these way that satisfies shareholders? How enabled them to find and analyze principles from the outset outper- can a company retain customers in the competing products and to make intel- formed established competitors and face of new competitors, and respond ligent choices. Customers discovered experienced meteoric growth. to new needs without sacrificing its they had options and the power to Management innovations enabled position? How does a company distin- exploit them. As both consumers and these companies to develop better 14 Leadership Excellence products quicker, and to manufacture MANAGEMENT CUSTOMERS them more reliably and at lower cost. spend time in the field and on the floor They allowed companies to get more where the action is lively, not in care- out of their plants, operate with less Customer as Boss fully contrived meetings where the inventory, reduce waste and errors, fill Go from leader- to customer-centric. action is limp. It is one thing to read orders more quickly, and respond with static customer satisfaction reports and alacrity to customers’ requests. Higher quite another to spend time in the field productivity, lower costs, better quality, gathering first-hand research. The lat- and improved service were the results, ter can have a far greater impact on and they translated into payoffs: leaders’ perception of service quality. Customers got better products at lower • When John Longstreet was GM of prices, workers had secure jobs, and the Harvey Hotel in Plano, Texas, he shareholders earned higher profits. invited guests to his office for “secret” In the customer economy, yesterday’s by Chip R. Bell and John R. Patterson assignments that included “call house- innovation is baseline today and obso- keeping at 3 a.m. and request 20 tow- lete tomorrow. What was once unimag- els,” “ask room service for something inable quickly becomes routine, and HEN ORGANIZATIONS ARE LED BY not on the menu,” or “break a glass in then expectations are raised higher. It is Wcharismatic, demanding or mem- the restaurant and report what hap- the nature of customers to constantly orable leaders, the focus often turns to pens.” The guest received a room rate demand more—more value for less compliance, obedience, or obsession discount, and John got first-hand cost, more innovation, more service. with the leader’s way, style and vision. information on his service processes. Companies that don’t keep up with Centering on customers takes leaders • Roberto Herencia, president of Banco their demands are abandoned. who are more interested in excellence Popular North America, invited his key Operating in the customer economy than ego. It takes a total alteration in leaders to join him for a day of shop- demands more than customer intima- agenda, attitude, and action. To make ping the bank’s competition. Each cy. Customer power must be reflected the shift, employ three strategies. leader was directed to make specific in how a company is managed, from 1. Customers in the requests, assuming the per- how work is done to how people are boardroom. Make the cus- sonality of an irate, unin- rewarded to how it is organized— tomer’s presence come alive formed, or demanding adapting every aspect of business to in operations. Invite cus- customer. They learned ways the reality of customer dominance. tomers to attend meetings to boost service quality. The agenda for the customer econo- normally reserved for 3. Customers on the my has nine elements. The first two employees and to partici- dashboard. By giving direc- translate platitudes about customers pate in the design of prod- tion, alteration, mainte- into concrete action by distinguishing ucts and services. Get nance, and early warning, companies from look-alike competitors feedback from customers on dashboards provide part of and creating loyal customers. Items 3 processes that determine the guidance system need- and 4 deal with process. To achieve their experience. Leaders ed to traverse the market- higher performance, businesses must need to model listening to customers. place. Whatever is on the dashboard organize and manage around the axis • At MBNA, senior executives spend proclaims the priority. If the dashboard of process and apply the discipline of four hours a month on the phones is silent regarding customers, employ- process to all aspects of their opera- monitoring customer calls. It is not just ees rightly question its significance. tions. Principle 5 demands a new about what they learn; it is about what The dashboard encompasses the approach to measurement—one that they signal as top priority. Modeling actions of leaders when tough deci- locates it squarely in the center of a also means paying attention to what sions are required. When leaders take systematic approach to improving per- customers see and feel. When managers a shortcut that improves the bottom formance. Item 6 is to redefine the role assist customers in a busy time, they line but hurts service quality, employ- of managers from autonomous chiefs communicate customer-centric. ees learn what really matters. of narrow domains into team players • eBay invites 12 users every 60 days Customer-centric leaders are not whose scope is the entire business. to participate in its Voice of the just customer advocates—they are Items 7, 8, and 9 harness Internet Customer program. These people visit stewards of a culture that relentlessly power to link companies. Distribution departments to talk about ways to pursues positive experiences for cus- must be redesigned from the perspec- improve service. Then, every month tomers. Stewardship means staying the tive of the final customer. Companies for six months, they reassemble to course until new behaviors are imbed- must knock down the walls that add explore emerging issues and make ded—and remaining vigilant for any- overhead and inefficiency, through col- major service enhancements. thing that imperils customer-focus. laboration and inter-enterprise process • Duke Energy has used a Boards of When customers spot organizations integration, and position themselves as Customers program in the regions they that operate on their behalf, they components of virtually extended serve. Experienced customers volun- reward them with their loyalty and enterprises. teer time each quarter to act as sound- money. Leaders need to keep the spot- Innovation can’t be bought in a store ing boards for new products and light on customers, since they can fire —it must be brewed at home. LE services. They became a key conduit anybody in the company. LE for feedback and service improvement. Chip Bell is founder of The Chip Bell Group and John Patterson Michael Hammer is the author of The Agenda: What Every is president of Progressive Insights. They are coauthors of Business Must Do to Dominate the Decade (Crown). Visit 2. Leaders in the customer’s world. Customer Loyalty Guaranteed! Create, Lead and Sustain www.michaelhammer.com. Customer-centric leaders hunt for gen- Remarkable Customer Service. Visit www.chipbell.com. ACTION: Translate these principles into realities. uine encounters with customers. They ACTION: Make the customer the boss. Leadership Excellence 15 CHANGE INNOVATION to creatively attack the status quo. You CHANGE INNOVATION can become trapped by legacy prac- tices and thinking. These things hap- Seduced By Success pen for three reasons: 1) successful Seek Advantage Avoid the success-induced traps. organizations tend to lose their sense Keeping up is a fool’s game. of urgency; 2) they get proud and pro- tective; and 3) they get an entitlement by Robert J. Herbold mentality. They can’t imagine a world by Daniel Burrus where they’re not on top.

N THE MID-1990S, Be Proactive EEPING UP—WITH IKodak was king of These problems can be avoided. Ktechnology or any- photography with its Toyota has prospered for 30 years with thing in business or highly profitable film business. its culture of continuous improvement, life—is a fool’s game. When you keep Digital photography was emerging, and Procter & Gamble thrives by find- up, you gain no advantage. You just but Kodak didn’t pay much attention ing unarticulated consumer needs. make yourself like everyone else. You to it. After the technology started to By being proactive, you can avoid learn who the best are and copy them. get traction in 1996 via early versions seven dangerous traps: 1) sticking with By the time you get as good as the of digital cameras from Japanese yesterday’s business model; 2) allowing best, they’ve moved on to something manufacturers, Kodak developed your products to slip into mediocrity; 3) better—and you’re still far behind. and launched a clumsy system called clinging to branding as it becomes stale Benchmarking is just a way of keep- Advantix, a digital camera that and boring; 4) letting your processes ing up. When you benchmark, you required film! Clearly Kodak was get cumbersome and complex; 5) hiring identify the best practices of others thinking defensively, with its goal excessively, leading to lack of speed and strive to imitate them. Once you being to protect its film business. and agility; 6) not confronting poor per- reach the benchmarked standards, the For the next six years, Kodak saw formers; and 7) not stretching your star company that set the benchmark has its business decline, and its stock employees. Such things signal that moved on to achieve higher standards. price plummet from $90 to $30. you’re being seduced by success! To gain advantage and stand out, In 2003, Kodak announced a 72 Observe these seven tips: you must set a new standard. percent decrease in its dividend and Business model: Avoid committees Consider these four suggestions. revealed plans to invest $3 billion in and consensus in developing big, dis- 1. Look to the future. When you digital photography. The tinctive model advantages. plan your future growth, ask three key stock market read this as too Individuals have big, distinc- questions: Where are the successful little too late, and the stock tive ideas; committees and companies evolving to? What path are price decreased another 14 consensus turn big, distinc- my competitors on right now? What’s percent to $24 per share. The tive ideas into mundane ones. the logical progression of the industry? outgoing CEO, who had Product: Charge your top Asking these questions enables you to spent his entire career at performers to get your prod- go beyond your competition and get Kodak, said: “I saw my first ucts out in front of important off the treadmill of keeping up. It digital camera at Kodak 20 technology, industry, and opens your eyes to future possibili- years ago. I knew then that customer trends, and then ties—to stay ahead of the pack instead we needed to transform the get out of their way. of side-by-side with them. Only when company.” Today Kodak is one of Branding: Always be fresh, relevant, you go beyond your competition will many players in the digital camera and distinctive. you find advantage—and the financial business, and is struggling to find a Processes: Continually demand new rewards competitive advantage brings. new reason-for-being. approaches to “proven” processes, and 2. Do what the masses don’t do. for each process there should be a czar Most businesses do the same thing as The Painful Lesson who is personally accountable to make their competitors and then wonder When organizations experience sure the process is always super lean. why they don’t have the upper hand. meaningful success, they believe that People: You need a top-notch per- Everyone is keeping up, but few peo- they are entitled to more success. formance appraisal system to spot the ple are doing so in a way that produces Managers become complacent and stars and confront the bottom 5 to 7 any real advantage. So, dedicate your- comfortable. What they should be percent, and you need a “key people self to finding an advantage and using doing is building on all the things development program” to continually it. Don’t just copy what the competi- they have done well in the past. stretch and grow the future leaders. tion does; rather, look at what they’re History is filled with sad stories of Culture: The focus should be on doing and then do what they don’t do. once-successful companies that, after excellence in finding and solving prob- If you can’t find anything different to reaching the top, could not sustain lems and jumping on opportunities, do, then determine if there’s a better success. How could GM decline for and not on basking in prior glory. customer you can go after—one that’s 30 straight years? How can Sony, Communications: Every employee better and different than what every- who invented portable music with should always know where the organi- one else is going after. Can you cus- the Walkman, get beat by the iPod zation is going and how it is doing. LE tomize your product or service for the developed by a computer company? better customer so that the better cus- Robert J. Herbold, former COO of Microsoft, is Managing Success can be a business vulnera- Director of Herbold Group, and author of Seduced by Success tomer would want what you offer and bility, destroying the ability to see the (McGraw Hill). Visit www.herboldgroup.com. not what the competitor offers? This need for change and the motivation ACTION: Don’t be seduced by success. process gives you the advantage since 16 Leadership Excellence you are more innovative over time. CHANGE TECHNOLOGY born outside this country. Companies 3. Go beyond competing on price. started by immigrants employed near- Most companies focus their strategies ly half a million workers and generat- on only a few of the many ways to Keep Up, Move Ahead ed at least $55 billion in revenue in gain a competitive advantage. This lim- Accept, adapt, accelerate or atrophy. 2006. Our society will undergo even its their ability to create and sustain more change. The “have-nots” are true competitive advantages. To gain a watching TV and seeing what they are lasting competitive advantage, you by Robert L. Dilenschneider missing. And they’re not happy. Smart need to go beyond pricing and develop innovators know that even a slight rise a competitive strategy that includes a in job growth can translate into mil- wide spectrum of techniques. Compet- OUR PROFESSION AND lions of new consumers. ing on price alone means lower mar- Yindustry are likely What happens “out there” deeply gins, meaning you need high volume being turned upside affects what happens “in here.” All of to make up for it. If your intent is to be down, and if you deny reality or fail to us need to accept change, adapt to it, a competitor of price, you need to real- adapt to technology, you’ll lose your job. and accelerate our efforts to accom- ize you have many more options. You In New York, I eat three times a week plish our goals. can compete on time, reputation, val- with clients at restaurants celebrated for One of my early mentors was ues, technology, image, experience, ser- “power lunches” to nurture and sustain Norman Cousins, editor of the vice, design, innovation, quality, professional relationships. Now, during Saturday Review. He was brilliant, information, knowledge, consultative such a meal, some executives hover sophisticated, kind, humorous and value, loyalty, or process. Review this over laptops, or respond to messages on adroit. I learned much from him and list and ask yourself, “Do I have a strat- their Blackberries or cell phones, multi- was introduced to many important egy for every one of those different tasking during a multi-course meal! contacts. Some people think that those ways of competing?” Most companies I used to receive 30 to 40 letters a who work in technology today blithely compete in only one or two areas and day. Now, I get two letters and a ton of float toward fortunes and that mentor- have a detailed strategy for both. Few junk mail. Ten years ago, I never ship is not needed. However, many compete in all areas. To gain an advan- thought of “logging on.” Today, I’m successful entrepreneurs, such as tage, you want a strategy for every glued to some device that transmits Google founders Larry Page and area. Detail how you are different in my messages 24/7. CEOs used to be in Sergey Brin, invariably turned to men- each area so you can go beyond keep- office for at least 10 years; now their tors to guide them. ing up and truly stand out. tenure is often less than Technology is just as an 4. Don’t imitate—innovate. In the five years. Why? Pressure enabler. It’s not a substi- future, competition will intensify. So, to from investors and Wall tute for clear thinking. A gain an advantage, you need to differ- Street; Board concern over Blackberry or Treo make it entiate yourself from the competition. litigation and direction; possible to communicate While it is good to keep track of the and many CEOs simply instantly with someone competition, too many organizations have not mastered the 10,000 miles ways, but focus more attention on “keeping up” rapid movement that tech- your message still has to than on internal innovation. Perhaps it nology has created. be clear and compelling. once made sense to play the one- Keeping up is a requisite Logic, good thinking, solid upmanship game of keeping up with for keeping your job and reasoning, and decent the competition. But the dramatic moving ahead. More than writing still matter—no changes spawned by science and tech- 80 percent of the global population matter how skilled you become with nology have made that a perilous game lives in the 135 developing (poor) technology. You need to communicate for the present (and a formula for countries among the 193 members of your thoughts sensibly and pithily. future disaster). Those who merely the U.N. That’s 4 billion people out of I urge you to seek the best publica- “keep up” are usually so caught up in 6.4 billion. India’s middle class of 400 tions and broadcast programs. These meeting their day-to-day challenges million—out of a population of one teach you how to think, organize, that they can only worry about the billion plus—is larger than the entire express an argument, and observe the future, while the real innovators see the U.S. population. Europe’s population evolving world. present as a stepping stone they can is becoming more nonwhite as African Nurture your relationships; don’t use to get to a bigger and better future. Muslims and other immigrants con- wait for life to happen to you. Know A new world is taking shape, and verge on France, Germany, and Great when to use snail mail. Answer email no company can afford to hide out in Britain. And 50 years from now in the within 24 hours. Identify the blogs you old familiar places. While you need to U.S., Hispanics will constitute a majori- should read daily. Make your argu- stay abreast of changes and update ty of the population. Most of the next ments thoughtful and logical. Think your company as new technologies 100 million people in the U.S. will be about politics, business, arts, entertain- and developments unfold, it’s crucial Latinos. Is your company prepared? ment, sports, and fashion. Seek to to distance yourself from the competi- As the Third World melds into the understand the social changes. Listen tion and embrace a forward-thinking First World, people’s aspirations for a to other people. Be relentless, but have mindset to turn tomorrow’s opportu- better life rise. Of the 2.3 million peo- some fun—and do it with style. LE nities into today’s profits. LE ple of Indian origin in the United States, 200,000 of them are millionaires. Robert L. Dilenschneider is Chairman of The Dilenschneider Daniel Burrus, author of Technotrends, is a technology fore- Group, a strategic counseling firm, and author of Power and caster and business strategist. Visit www.Burrus.com or call One in four founders of technology Influence (McGraw-Hill). Visit www.dilenschneiderpower.com. 262-367-0949. and engineering companies started in ACTION: Seek to gain a competitive advantage. the U.S. between 1995 and 2005 was ACTION: Keep up with trends and set your own. Leadership Excellence 17 LEADERSHIP CRISES leader unless people depend on you for purpose, motivation, and direction, especially in dangerous conditions. In In Extremis Leaders research interviews, I asked in extremis Develop crisis leadership ability. leaders, “Can you describe a time when your leadership had a profound impact on the lives of those you led?” by Tom Kolditz lifestyles led by in extremis leaders like One mountain climbing guide said, climbing guides, SWAT team chiefs, “People tell me that almost every and Army officers broadcast an impor- week.” He was inspired, and so were HE BEST WAY TO tant and unmistakable message: “I’m the people who climbed mountains Tdevelop crisis lead- not in this role merely for personal with him. To use in extremis lessons in ership abilities is to gain.” Business leaders should be just- business, “Other People’s Money” has develop leadership habits similar to ly rewarded in their leadership role to become a proxy for “Other People’s those who lead in life-or-death cir- with comfortable work and family Lives.” Almost any enterprise has an cumstances—in extremis leaders. lifestyles. But as the boss, living with impact on people’s lives, even if the Learning from military, police, fire- some humility sends a powerful mes- people are simply shareholders, and fighter leaders and extreme sport sage; it reflects a lack of ego invest- calling attention to the life-altering coaches overcomes reactive qualities. ment and communicates commitment impact of a business is an effective way You have to learn from those who are to the organization, establishing a to inspire an otherwise jaded workforce. experts at leading in high-threat basis for trust and loyalty. 7. Leader effectiveness crises, even if your risks are not of a 4. When you develop com- may be conditional. physical or life-threatening nature. petence, you develop trust Leaders must establish cri- and loyalty. In dangerous sis-quality credibility and Eight Lessons to Learn settings, competence is the influence daily, before pres- Here are eight lessons that you can most important basis for sure is brought to bear. learn from in extremis leaders: trust and loyalty. Leaders Crises tend to reveal poor 1. Motivation is most powerful who find that people don’t leadership. Unforgiving in when paired with learning. Danger trust them or are disloyal extremis conditions prevent motivates, and leaders in dangerous usually take it personally, leaders and followers from contexts channel that motivation. almost like a social rebuff. fooling themselves. What is When leaders have followers who are In response, leaders may orchestrate the break point for your organization already motivated by dire threat, social events like golf, off-site meet- to decide that things are so bad, that a tremendous opportunity, or earnest ings, or other team-building activities. leader needs to go? Don’t let that break obligation, they should focus every- Leader competence is often at the root point be a crisis—make the hard calls one’s attention to precursors of learning, of loyalty and trust problems, and on your own terms and timeline. such as awareness of the environment, can’t be fixed with a trip to a rock- 8. The best leaders want to be lead- creativity, critical thinking, and out- climbing school. Competence, trust, ers. Leaders in dangerous contexts are come analysis. Focus the crisis-motivat- and loyalty are intertwined. When virtually all self-selected. In choosing ed crew on breakthrough solutions, leaders demonstrate competence, they leaders, select people who want to lead, seemingly insoluble problems, or unre- are developing trust and loyalty. Most not just advance. Sometimes the allure solved issues. For average leaders, leaders have arrived at their station in of the power and rewards associated motivation from crisis is a way to make life through their own competence, but with being a leader gives rise to people people work harder; for great leaders, that becomes lost on others unless the who accept a demanding leadership it’s a way to help people work smarter. leader’s competence is occasionally role without the commitment, experi- 2. Sharing risk enhances credibility. revealed by action. Leaders who ence, skill, or determination. How In extremis leaders place more value on appropriately showcase their ability much of your ability to lead is based taking care of their clients, followers, give followers a reason for confidence. on positional authority rather than soldiers, and citizens than they place 5. Extreme threat reveals the true people’s desire to be on your team and on their own comfort, personal safety, character of leaders and followers. to accomplish common goals? or wealth. To be the best leader you How people act when things look bad can be in a high-stakes situation, you’ll is an indication of their fundamental Assess Your Leadership gain the most trust and loyalty by relationship with their organization Assess your influence. Few leaders demonstrating that risk and reward and their leadership. Adversity unifies can organize people with minimal are distributed fairly and that much of a strong team and destroys a weak dependence on HRM tools: remunera- the risk is your own. The willingness one. Leaders must become adept at tion, reward, working conditions, job to assume personal risk is a behavioral reading individuals when the stakes security, and benefits. Every leader’s cue that the leader has confidence and are high, especially when the future goal should be to retain a functional is putting as much on the line as the appears dim. When your business sur- organization through circumstances people he or she is leading. People in vives a crisis, take stock on how peo- where those advantages are threatened crisis often make sense of their envi- ple performed and behaved. The best or nullified by tough times. LE ronment by gauging the reactions of predictor of future behavior is past Tom Kolditz is Head of Behavioral Sciences and Leadership at others, especially their leaders. behavior, especially in crisis. the US Military Academy at West Point, and author of In 3. Your lifestyle reflects what you 6. Use the life-altering character of Extremis Leadership. E-mail [email protected]. value to followers. The unassuming your business to inspire. You’re not a ACTION: Develop your ability to lead in crisis. 18 Leadership Excellence MANAGEMENT PRODUCTIVITY italization in 1992 was $6 billion; today it’s $54 billion. Our operating margin has gone from 5 to 14 percent. Doing More with Less Lean manufacturing, Japanese quali- It’s feasible and financially rewarding. ty methodologies, and big goals did this. Lean manufacturing is process mapping and process re-engineering to by George David based on physics: capturing waste heat convert work that used to be serial or and using it, capturing the energy of sequential to simultaneous work co- acceleration when decelerating, and located in manufacturing cells. It is HAVE A SINGLE POINT TO heating via heat transfer. The fact that managing linearity or uniformity in the Imake: we can do 90 percent of total energy is wasted manufacturing process to take the more with less. About sizes the huge opportunity for us. unpredictability out of operations and 90 percent of the energy coming out of Big goals get big results. In the first eliminate the inventories, elapsed time, the ground is lost or wasted before it half of my 30 years at UTC, I wasn’t and waste. Japanese quality methods becomes useful work. Half of the input sure about big goals. We’d think about replace traditional end-of-line inspec- energy in central station power plants incremental gains, a few percent here tion with process control at the point of goes up the stack as waste heat because and there. But in the 1990s, we began to work. They build the confidence of we can’t move heat effectively any dis- think about bigger goals: three, four employees making products. tance. But how about putting the gen- and five times, even ten times. The trick Our environmental gains at UTC eration on-site and capturing and is to have the confidence to set these have been great, thanks to big goals. using the waste heat there. We do this huge goals, to base them on workable Since 1992, our hazardous waste gener- routinely, and energy conversion effi- theories, and to have a unified agenda ation in the U.S. has gone down by 84 ciencies go from 30 to 75 percent for and unified team stay in place long percent and chemical releases to air by generation and heat capture locally. enough to accomplish them. Then to do 86 percent. Lost workday incident rate Another example is not recapturing the same thing again and again. went from four to four-tenths. input energy into vehicles when they’re Productivity is a powerful force. We This says that 10X can be done— braked and stopped. The net energy in have a wonderful company—a research again and again. Gains like this have this acceleration-deceleration cycle is given UTC shareholders total returns zero, adjusted only for system inefficien- approaching 1,100 percent over a dozen cies and losses. New elevators recapture years (about 3X the returns for the Dow the energy on descent that was expend- Jones Industrial Average and S&P 500). ed on ascent. We build Otis elevators Our lessons are clear and powerful: today that use 75 percent less electric First, it’s clarity of organization and energy than comparable equipment in alignment among management on speed and load did a decade ago. A re- what we’re trying to accomplish. We generative commercial building high- have a solid management team, we rise elevator lifts a million pounds a day work well together, and we agree about at an energy cost of $1 an hour! our directions and disciplines and A third example is heat transfer know how to make them work. Second instead of heat dissipation and genera- is big goals. Big goals get big results; tion. Air conditioning systems move powerhouse and market leader with without the goals, you won’t get the heat from one place (inside) to another 200,000 employees and worldwide results. Third are the methodologies place (outside). We measure efficiency operations. We have tremendous reach, like lean and Japanese quality. All this by Coefficient of Performance (COP)—the technology, and productivity. within a framework of shareholder amount of energy required to move Carrier Corp., a UTC company, will value and commitments to citizenship. another amount of energy. The COP of build 10 million units of product this The way to get past difficulties is to most air conditioning systems is about year (up from 3 million units 12 years have clear disciplines, set big goals and 4 times (one unit of input is needed to ago on a work force 11 percent larger). be tough about making them happen. move four units of energy or heat). Otis, another UTC company, will install Productivity can jump in anything we How about heating hot water by heat three times more elevators and main- do, and productivity and globalization transfer so energy can go down by 75 tain twice as many as 12 years ago with are the engines for better lives. But they percent! Paybacks for such systems are a work force only 21 percent larger. must be tempered with responsible just three years at current energy prices. Productivity is jumping at 5 to 7 per- practices. Free trade, free investment Massive energy conservation is fea- cent per annum. Take out inflation, take flows, and labor mobility are essential sible and comes with attractive finan- out price change, it’s raw, physical vol- to generating productivity and cial returns. The common denominator ume productivity, units per person. incomes. This equation works. The only of all we do is to convert energy to use- And there’s no end in sight. This is the requirement on employees is their will- ful work. We build fuel-cell powered reason for the strength in our economy. ingness to rise to the challenges of mak- buses, because the by-products are In 1992, our revenues were $19 bil- ing themselves better every day. Our water, heat, and electricity. Fuel-cell lion. They will be $50 billion in 2007. world is not about a race to the bot- buses are twice as energy efficient as Our work force worldwide was 150,000 tom—it’s a race to the top. LE diesel buses, have no emissions, no people in 1992, and it’s 200,000 today. George David is Chairman and CEO of United Technologies smell, and very little noise. So 2.5 times the revenue with a work Corp. Visit www.utc.com. The changes proposed here are force 25 percent larger. Our market cap- ACTION: Enhance your productivity. Leadership Excellence 19 CHANGE INNOVATION 4. Time commitments. Time is scarce. One of management’s jobs is to verify that minutes are productively filled. Barriers to Innovation And while enlightened management Innovators face five big obstacles. will invest some of workers’ on-the-job time in education, experimentation, relationships, personal growth and by Peter Andrews health, it’s difficult to prove that such effective risk assessment methods. Put investments pay off. But increasing the the risk of innovation on the right per- value and benefits of an innovation HETHER YOU’RE son. Find and develop supporters. will tend to free up time for work on it. Wtrying to lead Anticipate objections and provide both Questions to ask include: Is the your industry, create a logical replies and stories that create innovation worth the time of the peo- new market, or just do things more contexts for ideas. Test on a small scale ple involved? What are the competing efficiently, innovation is difficult. and create prototypes. Dramatize ben- claims on time? What is the minimum Success begins with knowing what efits. Give people reasons to feel safe. time each participant must dedicate? you are trying to achieve, the likely Show you take seriously the safety of What are the milestones? Where is resistance, and planning. Still, five sponsors, participants and other stake- there flexibility in the schedule? barriers repeatedly show up, but they holders by mitigating their risks. Possible answers include: Do triage don’t need to stop your innovation: 3. Siloing. Organizations seek to sus- on assignment lists. Let others do more 1. Inadequate funding. Getting the tain and protect themselves. That’s of the work. Reallocate benefits so the funds for an innovation often means why they create boundaries, assign innovation can compete better for the taking money away from another pro- responsibilities, and put rules in place. time of key participants. Create small gram. Getting the money at just the No matter how artificial the divisions successes that encourage participants right time is also hard, since annual and processes are, they are usually to free up more time. funding cycles don’t match well with defended. Innovations tend to cross 5. Incorrect measures. Many organi- real-world opportunities. Many excel- boundaries and create new categories. zations only measure revenue, profits, lent innovations need more than seed It’s not unusual to see competing and market share. These are easier to money to survive. Broader thinking quantify than intangibles such as repu- on needs and resources can help inno- tation, knowledge, attractiveness to tal- vators move their ideas along. ent, leadership, and other assets that Questions to ask include: How far contribute true value. Most innova- can we get without money? Do we tions are difficult to explain in terms of need money? How much? When? ROI. Even innovations that have the What sources are there? Do we have potential to disrupt or create new mar- any partners? Who benefits and how? kets may suffer by comparison when Possible answers include: Use the put up against more pedestrian pro- resources of informal networks. Call jects in a budgeting process. By includ- in favors. Simplify the plan to create ing decision-makers in creating new short-term successes. Do a creative measures, you avoid the ROI trap. inventory of available fund sources. Questions to ask include: Can we Don’t build everything from scratch: claims of ownership and disputes expand our measures of success or leverage other work or take advan- about authority. Deals break down have different measures for different tage of “good enough” substitutes. over who will run things and how investments? Possible answers include: Enlist those who might realize value profits will be divided. So, innovations Assess the value of possible measures. as allies. Then sell them on the idea. are killed by groups that don’t see their Measures that are compelling to all 2. Risk avoidance. No progress is benefits or get a “fair share” of benefits. stakeholders can be developed in joint made without calculated risk-taking. Seek to understand their concerns to workshops. Enterprises that take a Since innovation is risky, many people better manage the conflicts. portfolio approach can establish differ- habitually look for things that could Questions to ask include: Do all ent measures for different investments. go wrong. Many classic responses stakeholders benefit? Do all know how The most effective way to overcome (“We’ve never done this before” or they will benefit? What are the mission barriers is to discuss with colleagues “This failed when we tried it before”) statements of affected organizations? how they work through problems. come as a reflex. Once risks are identi- What are their rules? Who are the deci- Your most valuable asset for innova- fied, innovation is often stopped. But sion makers? How have innovations tion is your network. Advice, com- a clear-eyed view of risks balanced been handled in the past? plaints, mentoring, and “war stories” against benefits can create a culture Possible answers include: Include all strengthen relationships. Working where innovation is nurtured. all major stakeholders in the creation together to solve common problems Questions to ask include: Do we of the innovation and help ensure they revitalizes these networks. Working on use standard methods for measuring are fairly rewarded. Create clear value barriers with your network helps you risks and benefits? Do we use appro- propositions for all stakeholders. Keep to realize the potential of your idea. LE priate risk assessment measures? Do stakeholders aligned and informed. Peter Andrews is an innovation strategist in IBM Executive we measure the risks of not innovat- Understand the concerns, interests, Business Institute. call (845) 732-6095, email pja@us.ibm.com ing? Do we measure the benefits? and boundaries of different organiza- or [email protected] or visit ibm.com/sales/ebi. Possible answers include: Promote tions. Know the people involved. ACTION: Overcome barriers to innovation. 20 Leadership Excellence or more than 20 years, our three monthly Invest $8-$10 a month in Leadership F magazines have been the best source for the best and brightest insights from all the top con- Development, Sales and Service sultants, coaches, authors, and top executives. Subscribe to Leadership Excellence, Sales and Service Excellence, and/or Personal Ex- Excellence, and Personal Growth! cellence—all part of the Excellence Performance System—and gain exponential return on your investment. 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