THE SUPERPERFORMING CEO THE SUPERPERFORMING Management/Leadership U.S. $14.95 Canada $18.20 U.K £ 8.50 The Superperforming CEO Uncommon Sense for Uncommon Results In his latest book, Dave Guerra introduces 15 unconventional strategies for executives who seek to achieve Superperforming levels of organizational performance, stakeholder engagement, and shareholder return on investment. Through a multi-year conversation with Superperforming CEO George Martinez, CEO of Allegiance Bank Texas and former Chairman and CEO of Sterling Bancshares, Guerra elucidates 15 Distinctions for today’s executives that any leader can use to turn organizations into places where systems sing and spirits soar. Liberating the Promise Within Liberating the Promise Replete with both hard-hitting statistics and illustrative anecdotes, Guerra explores the uncommon people, uncommon practices and uncommon paradigms that reveal the fully expressed right brain of a Superperforming CEO. Drawing on new science principles including complementarity, emergence, and increasing returns, Guerra demonstrates why dramatic change is possible and how it can occur. The real-life experiences and the penetrating insight that Martinez offers clearly provide credence, and his enthusiasm for people, processes and performance is contagious. To learn more about Superperformance and The Superperforming CEO visit www.corpusoptima.com or call 832-497-1283. LIBERATING the PROMISE WITHIN Cover Design by Axiom, Houston SuperperformingThe CEO LIBERATING the PROMISE WITHIN Uncommon Sense for Uncommon Results DAVE Guerra Copyright © 2009 Dave Guerra All rights reserved Printed in the United States of America This book may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Dave Guerra. Cover Design by Axiom Design Group, Houston, Texas. Guerra, Dave The Superperforming CEO: Liberating the Promise Within Version 1 ISBN 978-0-9819922-1-1 This book is Dedicated to my father Robert Guerra, who was the first servant leader in my life. Contents Preface . xi Introduction . .xv Acknowledgments . xxi Uncommon People 1 Believing in the Unlimited Potential of People. 3 Sharing the Wealth. 15 Treating the Community as Stakeholder. 25 Making Sure All Stakeholders Win. 35 Fulfilling Life’s Purpose through Work. 41 Uncommon Practices 51 Taking the Long View of Business . 53 Staying in the Sweet Spot. 59 Use of Coaching. 67 Measuring Things Hardly Measured. 75 Open and Honest Communication. 85 vi The Superperforming CEO Uncommon Paradigms 93 Tacking . 95 Making Responsibility a Choice. 103 Context as Lever . 115 Distributed Being . 121 Continuous Emergence . 133 Epilogue 141 Appendices 8 Simple Rules for the Emergence of Superperformance. 145 The Superperformance Executive Advocate. 149 The Superperforming CEO Inventory . 155 The Superperforming CEO Resources. 163 Notes. .167 Index . 175 vii viii The Superperforming CEO Preface liked George Martinez, cofounder and CEO of Allegiance Bank Texas, immediately. I found him gentle, intensely curious, brilliant, Iand enigmatic, and I followed him from Sterling Bancshares to Allegiance Bank Texas. We first met when I was finalizing research for Superperformance: New Profound Knowledge for Corporate Leaders. Sterling Bancshares, his first bank, was one of the wonderful companies profiled in Superperformance, along with Berkshire Hathaway, Harley-Davidson, Johnson & Johnson, Microsoft, Southwest Airlines, SYSCO, Toyota, and Wal-Mart. Together over a 20-year period, these ten amazing companies had outperformed the S&P 500 by a margin of almost five to one! Moreover, their Wisdom and behaviors proved the 8 Simple Rules (for the compassion emergence of Superperformance) outlined in the book (Appendix 1). As we visited I became are inseparable increasingly excited to discover that most of CHRISTMAS HUMPHREYS these unconventional behaviors were essentially cultural in nature, and what’s more, I found them astonishingly simple. The more George shared, the more convicted I became that there must be another book. There was something more, something valuable to learn x The Superperforming CEO about Superperformance from this amazing individual. Combined with a study of the behaviors of other Superpeforming CEOs, this book gives a real voice to this rare category of top executive. It does this through a latticework of 15 distinctions—they are new and come straight from the Superperformance frontier. When we first met, George was Chairman of Sterling Bancshares, having just passed the torch to Downey Bridgewater, who remains Sterling’s Chairman and CEO today. Over a 30-year period, Sterling Bancshares had risen to become a colossus in the regional banking world, having pioneered a new banking life form called (ironically) the “Supercommunity Bank.” Over several decades Sterling had experienced tremendous performance growth, consistently outpaced the market, and easily qualified as a bona-fide Superperformer in the most essential sense of the word. (In Superperformance, the category was defined as industry- outperforming return on investment sustained over at least a dozen years.) It was fascinating to see how Sterling’s finely tuned business model contributed to what could only be described as a steady-state of increasing returns. But it was an especially powerful A little unlearning discovery to see that Sterling Bancshares was an goes a long way. outperformer when it came to people too. One of numerous testimonies to this distinction RICHARD KEHL was Sterling’s inclusion in Fortune’s list of 100 Best Companies to Work For® for no less than three years in a row (2003-2005). It was exciting to hear from George’s perspective the astonishing leverage Sterling was able to reap from its amplified corporate culture. This opportunity provided me, once again, confirmation of the ubiquitous connection between corporate culture and Superperformance. All of my time with George Martinez has been extremely valuable to me. I am grateful that he was so generous with his time and unfailing in his encouragement over all of these months. It has been a great privilege to visit this territory with George to further understand Superperformance and its underlying drivers. Over the course of many months and over Preface xi 40 interviews, we have managed to distill everything down to a set of 15 distinctions. These are the mainstay of The Superperforming CEO. As a set, they represent a valuable arsenal, but most especially they show how the right brain of Superperformance—the leadership hemisphere— actually works. The Appendices include more background on the theory of Superperformance as well as a practical set of guidelines for adopting these distinctions. My prayer is that they help you and your organization breakthrough to unprecedented, previously unimagined new levels of success and achievement. Dave Guerra October 15, 2009 Houston xii The Superperforming CEO Introduction eorge Martinez is, of course, a vital part of the explanation for the Superperformance of Sterling Bancshares and the rapid Gemergence of Allegiance Bank Texas over the last several years. He is a bona fide Superperforming CEO, the real thing. For this reason alone, the reflections he offers here are extremely valuable, especially in these urgent Learning is not times. Moreover, they point us, inevitably, to compulsory… the need for a new guiding science. neither is survival. While science has been the leading informant in the evolution of other disciplines, DEMING management science is woefully past its expiration date, and is still tethered to a paradigm (call it “Machine View”) that is 400 years old. Machine View is incomplete, and left to its own devices, leads to the sub-optimization of people and companies. A different operating framework (call it “Organism View”) offers much greater possibilities. There are innumerable, invisible interactions and relationships influencing behavior everywhere, at every moment, inside and outside of organizations—in their operating environments. Many Superperforming CEOs and eminent business theorists including xiv The Superperforming CEO W. Edwards Deming and Peter Drucker have called attention to this territory—to the importance of what occurs in this field. They have argued for a different approach, a new thinking, but regrettably, most organizations to this day still remain fundamentally trapped in Machine View. Very few have been able to break out of this self-limiting paradigm. But trading Machine View for Organism View reveals a very different landscape. An Organism View of economy is a view of a vast and complex interconnected ecosystem, replete with all of the self-organization, diversity, emergence, and self-regulation found in your own body. An Organism View leads to a distributed The first step is view of management and leadership—an transformation of approach that involves every cell, every person. Deming’s “system optimization” the individual. and “profound knowledge” theories This transformation take on powerful new meaning in Organism View. Trading Machine is discontinuous… View for Organism View reveals The individual, previously hidden opportunities to transformed, will transform individual and organizational performance—for free. Authentic new perceive new possibilities for true joy in work and meaning to his life, personal fulfillment begin to unfold. to events, to numbers, When you make this trade,