This issue sponsored by MARCH 2007 Excellence...

w w w . L e a d e r E x c e l . c o m

Brand Your Leadership

DevelopmentYou Can Win the

Race for Talent

Bold DreamsThey Unite and

Motivate People

Jim CollinsBest SellingAuthor

What Is

TrueSuccess?

Brand Your Leadership

DevelopmentYou Can Win the

Race for Talent

Bold DreamsThey Unite and

Motivate People

What Is

TrueSuccess?

“ L e a d e r s h i p E x c e l l e n c e i s t h e H a r v a r dB u s i n e s s R e v i e w i n U S A To d a y f o r m a t . ”

—Stephen R. Covey, Author o f T h e 8 t h H a b i t

T h i s i s s u e s p o n s o r e d b y ExcellenceL E A D E R S H I P

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

MARCH 2007

I n t e r n a t i o n a l S o c i e t y f o rP e r f o r m a n c e I m p r o v e m e n t

ExcellenceL E A D E R S H I P

JIM COLLINSFailure or FallureStart measuring your success rate . . . . . . .3

JON YONGER, NORMSMALLWOOD, ANDDAVE ULRICHBranded DevelopersThey engage in job sculpting . . . . . . . . . . .4

KATHRYN GRIFFINLawyer CEOsYour chief counsel may be a leader . . . . . . . .6

LANCE SECRETANBold DreamsAlign your people behind your dream . . . . .7

BRIAN C. WALKERThe Race for TalentAre you gaining

in talent-share? . . . . . . . .8

JUDITH A. HALECertificationIt’s a retention and cost-saving strategy . . . . . . . . .9

NOEL TICHY ANDWARREN BENNISSound JudgmentThis is what great leaders possess . . . . . . . .10

ROB LEBOWLean Thinking See and manage your firm as a system . . . . . . .11

MICHAEL FEINERCommitmentThis is what drives high performance . . . . .12

RICHARD LEPSINGERFive Lessons

Learn from your losses and victories . . . .13

ANDRE MARTINCreating Leader 2.0Engage in an action-learning approach . . . . .14

CHRISTOPHER RICEFour PrioritiesMake talent a top priority . . . . . . . . .15

JOHN BOSTICKRide the TurbulenceManage well the transition points . . . . . .16

JOAN MARQUESAwakened LeadersThey share five traits in common . . . . . .16

ADRIAN GOSTICKThe Carrot Principle

Revamp old ways of recognizing people . . . .17

HOWARD GUTTMANDecision LeadersThey are both decisionmakers as well as decision mentors . . . . . .18

MICHAEL M. GRANTPerformance ManagementUse quality principles to manage people . . . . .19

STEPHEN J. CABOT ANDJULIUS M. STEINERMake Your Company a Great Place to WorkCraete a menu of benefits and options . . .19

MARILYN MANNINGEmbrace DiversitySet ground rules for working together . . . . . .20

V OL. 24 NO. 3 MARCH 2007

™

Successful ApproachYour approach to leadership may be bold as you go forthe goal, but monitor your success rate and brand yourdevelopment so that you cultivate sound judgment andlean thinking and learn the lessons of wins and losses.

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

WHEN YOU AREtrying to do

something—andwhat could be more worthwhile todo at work than developing yourleadership—it’s smart to start witha plan.

Indeed, the old aphorism—planyour work, work your plan—stillapplies.

Over the years, I have seen sev-eral good leadership developmentplans that are specific to a certainrole, style, function, team, organi-zation, industry, or military unit.The Marines, for example, have agreat plan for developing Marines.And most organizations have somesemblance of a plan for developing“leaders like us.”

For years, we have recognizedthe need to have a more universaltemplate that takes into accountthe personal side of leadershipand enables you to create yourown development plan or to cus-tomize a plan for your team ororganization.

I finally feel we are ready tointroduce the Leadership ExcellencePlan and make it the centerpiece ofour Excellence Performance System.

The four quadrants of theplan—two on the personal sideand two on the team and organiza-tion side of leadership—parallelour four monthly magazines.Personal Side of Leadership

Unless you start with the per-sonal side of leadership, you buildon a foundation of sand. The livesof many leaders melt once theyexperience the heat of the position.Hence, we provide two resourcesto develop character, competence,and resilience: • Health and Fitness Excellence, The Magazine

of Body Leadership. In this monthly maga-zine (now in its 2nd year), we package thebest and latest thinking on seven dimensionsof personal wellness and performance.

• Personal Excellence, The Magazineof Life Leadership. In this monthlymagazine (now in its 12th year),we provide the best and latestthinking on seven dimensions ofwhole-life growth, improvement,progress, and positive change.

So, our personal leadershipresources emphasize the disciplineof appetites, passions, compul-sions, and obsessions and thedevelopment of habits, attitudes,and behaviors that bring out thebest in you. Organization Side of Leadership

Once you start or join a team ororganization, you become a mem-ber of a performance unit thatdelivers some kind of product orservice. This requires you to workwith other people who are, hope-fully, engaged and aligned behinda common purpose. So, we pro-vide two resources to developesprit de corps, execution, and teamexcellence: • Sales and Service Excellence, The

Magazine of Team Leadership. Inthis monthly magazine (now in its7th year), we package the best andlatest thinking on seven dimen-sions of sales and service teamperformance (since all members ofa team have a role to play in thesevital areas—whether they know itor not). • Leadership Excellence, The

Magazine of OrganizationLeadership. In this monthly maga-zine (now in its 24th year), we pro-vide the best and latest thinkingon seven dimensions of manage-ment and leadership of teams andorganizations with an emphasison the timely application of time-less principles.

To access our new LeadershipExcellence Plan, visit the home pageof our website www.LeaderExcel.com and click on the LEP

icon. You may also want to explore the on-line article archive. LE

I t ’ s t h e n e w t e m p l a t e f o r y o u r d e v e l o p m e n t .

by Ken Shelton

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Leadership Excellence PlanE . D . I . T . O . R ’ S N . O . T . E

2 L e a d e r s h i p E x c e l l e n c e

Editor since 1984

B o d y L e a d e r s h i p

L i f e L e a d e r s h i p

Te a m L e a d e r s h i p

O r g a n i z a t i o nL e a d e r s h i p

say, “the clock is ticking” from themoment you leave the ground. Youonly have so many minutes and sec-onds before your fingers uncurl off theholds, and you plummet down until(hopefully) the rope catches.

“Breathe, Jim. Relax.” Matt’s voicesoothed me for a moment.

I gathered a bit of composure, whilehooking my thumb and resting my fin-gers, trying to get my breathing to set-tle down. But to little avail. My mindchattered away: “Not sure whether togo right hand or left hand to the side-ways edge above . . . If I get it wrong,

no way I can reverse . . . and even if Iget it right, I’m not sure I’ll haveenough power to pull up to the crystalball . . . and if I can’t get to the crystalball, there’s no way I’ll be able to getthe rope clipped into the next point ofprotection . . . how far would I fall? ButI don’t like to take big falls . . . “

Tick, tick, tick—the clock ran onwhile I hesitated.

“OK, Matt, here I go.” Right hand to the side pull. Left

foot to the edge. Uh oh, wrong call. I should have

gone to the edge with my left hand! Irolled my body to the left, groping foran edge, a pebble, a wrinkle—some-thing, anything—that would allow meto pop my right hand up and move myleft onto the side edge. I smooshed myright fingers into a little edge thatpointed down and sideways—thewrong direction for a good pull. I nowhad a less than 20 percent chance ofsuccess. If I tried to make the move up,

Failure or Fallure

SO M E O F M Y M O S Tvaluable lessons

about leadership andlife have come from a special class-room: the sheer rock walls of Coloradoand the towering cliffs Yosemite Valley.

In this laboratory of personal chal-lenge—hanging by fingertips from lit-tle edges, tethered to a great partner,confronting fear and discovering per-sonal weaknesses (and an occasionalstrength)—I’ve come to see the pursuitof excellence as a quite different con-cept than pursuit of the summit.

In fact, some of the proudest dayscome in not reaching the top, andsome of the most disappointing dayscome with summit success.

* * * * *Matt and I stood below an

absolutely beautiful sheet of rock—smooth and overhanging, with a fin-ger-tip sized seam splitting the middleof the grey-and-silver granite wall.“You can see why I named the routeCrystal Ball,” Matt said, pointing to abaseball-sized quartzite handhold 50feet up the climb.

We roped up, and I set off up theroute, shooting for an on-sight ascent.An “on-sight” means that on yourfirst try you lead the climb withoutany prior information about themoves. For you, the route is an entire-ly blank page—no matter how manyother climbers have ascended theroute. Once you start to climb, if youblow it (and thereby fall onto therope), you’ve forever lost the on-sight.

Ten feet below the crystal, my feetbegan to skitter, slipping off slick peb-bles, and I curled my thumb around alittle edge, thinking to myself, “If I canjust get a little weight off my fingers . . .”

The adrenaline made me over-gripevery hold, sapping strength I wouldneed higher on the climb. A hard sportclimb is a race to the top before yourun out of power; moves that would beeasy if they came at the bottom aremuch harder when found higher onthe route when you hit those movesalready fatigued. As climbers like to

I’d almost certainly fall. Even if I didmanage to surge upward, the higher Iwent without making the next boltclip, the bigger the eventual fall. (To“clip” means to get the rope into thecarabiner hanging off a protection bolt.If you fall when leading, you descendabout 2.5 times as far as the distance toyour last successful clip.)

“Off!” I called down to Matt. “No,” he yelled back. “You’re only

three moves from the crystal.”“OFF!” I repeated, with angry

emphasis. And I let go, dropping onto the

rope in a nicely controlled fall.I hung on the rope for about 10

minutes, recovering, and then swungtoward the rock on the end of therope, pulled myself back on to theholds and climbed to the top. But ofcourse it didn’t count. I hadn’t done aclean on-sight. And even though laterin the day, I managed to ascend theroute from bottom to top in one shot—a success by most measures—I hadnonetheless failed. When confrontedwith the moment of commitment, themoment of decision, the moment ofgo-for-it on the on-sight . . . well, I letgo. I went to failure, not fallure.

* * * * *Failure and fallure. The difference is

subtle, but it is all the difference in theworld. In fallure, you still fail to get upthe route, but you never let go. Goingto fallure means full 100 percent com-mitment to go up, despite the oddsagainst you. You’ll only find your truelimit when you go to fallure, not fail-ure. Sure, I had less than a 20 percentchance of pulling through to the crys-tal ball, but because I let go, I’ll neverknow for sure. Perhaps I would havehad an extra reserve, perhaps I wouldhave surprised myself and had anextra bit of power to hang on for onemore move. Or perhaps—and thisturned out to be true—the very nexthold is better than it looks. And that’sthe rub. It’s the ambiguity—about theholds, the moves, the ability to clip therope—that makes 100 percent commit-ment on the on-sight so difficult.

One of my mentors, the designguru Sara Little Turnbull, built a dis-tinguished career as a design consul-tant to major corporations. (TheCorporate Design Foundation oncedescribed her as “the CEOs’ secretweapon in product design.”) Turnbullonce told me that some of her bestdesigns came when she was on thebrink of a failed concept but didn’t letgo. Of course, many—indeed, most—

by Jim Collins

L e a d e r s h i p E x c e l l e n c e 3

PERFORMANCE EXCELLENCE

W h a t c o n s t i t u t e s t r u e s u c c e s s ?

of her brink-of-failure designs endedup being failures. But every once in awhile, by not letting go, she wouldpush herself to a completely differentlevel, and something extraordinarywould come about. “And, of course,that’s when breakthroughs happen,”she told me. “If you don’t stretch, youdon’t know where the edge is.”

Fallure, not failure.Business Example

Some of the bestbusiness leaders inhistory intuitivelyunderstood this idea.Darwin Smith made afallure versus failuredecision in vaultinghis company to great-ness. For 100 years,Kimberly-Clark lan-guished in mediocrity,with most of its busi-ness in traditionalcoated paper mills.Smith realized thatthe company’s bestshot at greatness layin the paper-basedconsumer goods arena, where it had aside business called Kleenex. But howto get the company to fully commit tomaking the consumer business great,when the bulk of the company’s histo-ry and revenues lay in the traditionalindustrial paper mills?

Like the general who burned theboats upon landing, leaving no retreatfor his soldiers, Smith decided to sellthe mills. He would sell even the millin Kimberly, Wisconsin, and throw allthe proceeds into the consumer busi-ness, going head to head with con-sumer rivals Scott Paper and Procter &Gamble. Wall Street derided him, thebusiness media called the move stu-pid, and the analysts wrote mercilesscommentary. But in the end, Smith’sdecision paid off. Kimberly-Clarkbecame the number-one paper-basedconsumer products company in theworld, eventually beating Procter &Gamble in six of eight product cate-gories. Of course, there was no guaran-tee that Kimberly-Clark wouldsucceed in the consumer business—itcould have taken a huge leader fall—but Smith understood the only path tosuccess lay in a full commitment toclimb to fallure. Go to Fallure

I now see life as a series of choicesbetween going to failure or fallure.

Like an on-sight attempt, the next

THE COMPANIES WE CALL BRANDEDdevelopers have a track record of

excellence in leadership developmentand turn this reputation into a sourceof competitive advantage in recruiting,engaging, and retaining employees.

Branded developers enjoy powerfulbenefits. They recruit at lower cost,have first pick of the best employees,and achieve higher retention. They cre-ate a deep talent bench, enabling themto drive organic growth. Investors oftenreward them with a valuation premiumbecause they instill confidence andkeep performance promises. Customersprefer to deal with them, as employeeswho know them get things done andnature long-term relationships.

Branded developer think differentlyabout people and careers in 10 ways:

1. Branded developers hire for people,not jobs. For them, recruiting is aboutfinding great people, not filling posi-tions. They look for talented individu-als who make long-term contributionsas effective business and functionalleaders. As a result, they think differ-ently about the qualities most impor-tant in those they hire, and often hireemployees with unconventional back-grounds or experience. Because theyhire for talent, not positions, the hiringprocess is more rigorous.

Branded developers use three tests toassess prospects: Do they have the capa-bility to succed here? What is theirpotential for leadership? What is the cul-tural and values fit: Is he or she like us?Values congruence is particularly impor-tant. The websites of branded develop-ers represent their history, values, andthe unique competencies they seek.

2. They hire special role players.Although branded developers primari-ly hire employes at entry levels, theyalso seek aptitude for future leadership.Individuals typically enter early devel-opment programs offering rotational

holds in life remain unclear, ambigu-ous. And that very ambiguity holds usback from making a fully committedattempt. We fail mentally. We let go.We take a nice controlled fall, ratherthan risking a bigger fall. But as withmost hard sport climbs, going to fal-lure in life is scary, but not dangerous.Whether it be starting a business orpublishing a book or trying an excitingnew design, fallure rarely meansdoom. And most important, the only

way to find yourtrue limit is to go tofallure, not failure.

Facing 50, mybody does not allowme to pull as hardon holds as when Iwas 20. But I’vesince learned thatwhat you lose inphysical strengthyou can gain byincreasing yourmental strength.

I’ve even rede-fined “success” lessin terms of getting tothe top and more in

terms of the quality of my mentaleffort. I keep a record on my Palm Pilotof my hard on-sight attempts. A recentlisting reads:

HARD ON-SIGHT ATTEMPT LOGREACH THE TOP: 24CLIMB TO FALLURE: 18FAILURE (LET GO/QUIT): 16TOTAL ATTEMPTS: 58% SUCCESS RATE: 72%(TOP + FALLURE)

Note that I calculate the “successrate” not just as the percentage oftimes to the top, but the percentage oftimes to the top plus percentage oftimes to fallure. During a recentclimbing session, I did not make it tothe top of a single route. Not one.Still, it was one of my most successfuldays of climbing ever, because I wentto fallure on every single attempt. Ifelt good on the way home becausemy mind felt strong that day, com-pared to the weak feeling on mostdays. For in the end, climbing is notabout conquering the rock; it is aboutconquering yourself. This is what fal-lure is all about. LE

Jim Collins is author of Good to Great and co-author of Built toLast. This article was adapted for Leadership Excellence fromJim Collins’ chapter “Hitting the Wall” from the book UpwardBound, Edited by Michael Useem, Jerry Useem and Paul Asel(Crown Press). Visit www.jimcollins.com.

ACTION: Monitor your success rate.


by Jon Younger, NormSmallwood and Dave Ulrich

PEOPLE DEVELOPMENT

BrandedDevelopersT h e y t h i n k d i f f e r e n t l y .

and limitations of individuals. Theyhave tested these individuals in arange of situations, and know whatdevelopmental roles make sense. Theiremphasis on talent development andretention provides bench strength thatmediates risk. By maintaining strongexpertise on teams, they can move tal-ented individuals outside their exper-tise and develop them in new areas.

6. They have a different career con-tract. Branded developers encouragegreater movement because they seecareers differently. They see workassignments as “stops” on a careerjourney. Roles are to be put on andtaken off as people progress. In turn,their employees willingly accept regu-lar assignment and location changesbecause their personal risk is reduced.They believe the company has in mindtheir best interests and organizational

needs. They have confidence thatmovement is sensible, not capricious.And, they count on the basic employ-ment contract: that the “get” for “giv-ing” career movement is continueddevelopment and some measure ofsecurity so long as they perform well.For example, Exxon Mobil informallyoperates according to the one-in-fourrule: “You can say no to one careermove in four that’s offered you.”

7. They continually test people.Branded developers continually test aperson’s potential. In fact, potential isthe measure of how people perform intest roles. Employees at PepsiCodescribe career management in thatcompany as career pinball: “winnersget to play again.”

Branded developers often use rocketjobs to assess high-potential people,prepare them for greater responsibility,and propel advancement. We find fourtypes of rocket jobs: 1) business orfunctional leadership, 2) project andnew business initiatives, 3) turn-arounds of a struggling market or unit,and 4) relationship or team buildingacross businesses, geography, and cul-

ture. Not all rocket jobs offer verticalprogression—often they provide later-al or “diagonal” career movement.Career paths combines steep verticalmoves with periodic lateral or diago-nal assignments.

8. They take a hard look at talent atmultiple points or career stages. Thefirst hard look follows completion ofthe early development program orinternship. The two basic questionsare: “Have they established credibilityand a reputation for getting thingsdone?” and “Do they live the compa-ny’s values?” Those lacking the rightstuff are either let go or leave on theirown. The second point, after a fewyears, is whether they show evidenceof business or technical leadership.Individuals who don’t distinguishthemselves may not be pushed out,but they are likely to leave or moveinto a new role or function. By con-trast, employees with perceived lead-ership aptitude and interest areusually invited to take a supervisoryrole. The third hard look is whetherthe person has or can develop thecapability to play a strategic leader-ship role. They leapfrog colleaguesand move through progressively morechallenging roles. They relocate moreoften to gain broader perspective andto be seen and evaluated.

9. They engage in job sculpting. Thecareer philosophy of branded develop-ers creates far greater flexibility in roleand organization design. Because theyare focused on both capability accelera-tion and business performance, rolesare often “sculpted” to the individual.Roles are custom-designed to assesshow well the person leads. This is amixed blessing. On one hand, it createspowerful developmental opportunity.On the other, it often creates volatility.

10. They preserve the elements ofbranded development. Building a brandfor development is hard won but easilylost. The forces of competition, newtechnology, consolidation, and transfor-mation create a high hurdle. So, brand-ed developers tend to be firms thatdepend on technical excellence, wheredecisions have long-term horizons andleaders can’t easily be imported. Theyalso have confidence in their cultureand way of working. Many companiesaspire to become branded developerssince they must find a path to attractand retain quality employees. LE

Jon Younger, Norm Smallwood, and Dave Ulrich are principalsof The RBL Group. Email [email protected], call 973-467-6710or 801-373-4238, or visit www.rbl.net.

ACTION: Become a branded people developer.


work experience and education.However, not all professional hires

are entry-level. “Gap experts” are alsosought to add critical capability or tojump start a new function or business.For example, GE hired six sigmaexperts, and Exxon recruited seniorexperts in OD. These senior hiresoften find it difficult to feel like a fullmember of the “club.” Unlike col-leagues who share a common historyand values, gap experts are inserted ata higher level. However, lacking astrong internal network, many reportdifficulty in getting things done.Cultures are relatively intolerant of“outsiders.” As a result, the attritionrate for gap experts is greater.

3. They have well-developed careerarchitectures. Branded developers arecareer architects and engineers. Theyare clear about the relationshipbetween high performance and careerprogress. Their career paths are fairlysimple. For example, at McKinsey, theconsulting career path consists of fiveprogressive roles: associate, engage-ment manager, associate principal,partner, and director. Many organiza-tions have career paths. What differ-entiates branded developers is thecare with which they design them,implement them, and use them as ameans to develop their people.

4. They have a plan in mind. Theessence of career planning in brandeddevelopers is a focus on the future.They tend to think two or three rolesahead in planning the careers of toptalent. They create a multi-tieredprocess of talent review and develop-ment planning and create a meaningfuldevelopment path through the right setof experiences. For example, at ExxonMobil, succession planning is linkedthrough a lattice of talent committees;the profiles of high-potential individu-als float up, and the next moves ofhigh-potential managers are discussedby the senior executive team.

5. They give more people moreopportunity. As a result of theirknowledge of their talent, brandeddevelopers provide more opportunityto more people. Although job-postingsystems are typical, at professionaland leadership levels, high-perform-ing people in one line division mightbe “invited” to take on a different rolein another division. Or, a line managermay be asked to take a rotation into asupport function such as HR.

Their emphasis on performancemanagement and assessment ofpotential provides managers withgreater visibility into the strengths

tively protect shareholder interests, andmanage in times of crisis, can quicklydamage a company’s brand and reputa-tion, affect the bottom line, and determinethe success or failure of the organization.As leadership becomes more complex,the skills and perspectives that topbusiness lawyers bring to strategy andleadership is becoming highly valued.”

Citigroup, BET, General Dynamicsand Pfizer, to name just a few, are nowled by CEOs who once served andbuilt their impressive business creden-tials either in the corporate GeneralCounsel role or as a business lawyer. General Counsel Becomes Key Advisor

One key leadership measure forCEOs, is the degree to which theyeither have engaged their top corporatelawyer in strategic business discussionsand decision-making, or left him or her

out of the leadership loop, as was com-mon until recent years when scandaland governance reform changed theprevailing wisdom.

Today, most CEOs would not runthe risk of managing tough businesschallenges in circumstances wherethere is an arm’s length relationshipwith their General Counsel. And thereare few, if any, corporate executivesequipped to offer advice on how tonavigate choppy business or potential-ly murky legal waters better than aGeneral Counsel who can work effec-tively at the right hand of the CEO.

The best corporate GeneralsCounsel are so closely tied to the workof the CEO that they’re capturing anunparalleled view and understanding

Lawyer CEOs

THE SEARCH FOR LEAD-ership talent has

similar stakes and risksas a top business opportunity.

In today’s risk-conscious businessenvironment, the governance reformsdriven by Sarbanes-Oxley have fusedthe connective tissue and interests ofC-Suite leaders. Now, the CEO,General Counsel, CFO, CIO, COO,and Chief Risk Officer must overcometraditional gaps in each function andwork collaboratively and transparent-ly to assess and mitigate legal andoperational risks to the enterprise.

The General Counsel role has beenmagnified as companies insert risk-mitigation practices into their product,service, technology, and regulatorytouch-points with consumers,employees, shareholders, analysts,and regulators. This shift is forcingleaders to understand the increasedinfluence of the General Counsel, andwhy other senior leaders’ ability towork with the top corporate lawyer isbecoming a measure of their potential.

The mounting legal demands andexternal pressures on leaders today aremoving more organizations to pro-mote or recruit business lawyers to theCEO post. Risk is redrawing the linesof corporate management structure.

Legal issues—ranging from productliability and regulatory compliance topatent infringement, discriminationand stock options backdating—threat-en to erode shareholder confidenceand market share. The unprecedenteddecline in shareholder trust—given theheadlines and mounting concernabout corporate scandals and ongoinggovernment investigations—hascaused CEOs and Board Directors tolook for leadership solutions withinthe ranks of top business lawyers.

Today’s environment makes thebusiness of recruiting a GeneralCounsel, or a Chief Legal Officer,more consequential to the future ofcorporate leadership and the fulfill-ment of shareholder expectations.

The failure to anticipate and managea company’s legal exposure, or to effec-

of critical business issues that drive orinfluence the business. It’s a front-rowseat on the CEO role and an extraordi-nary training ground for the top job.

The challenge of CEO leadership,says LandAmerica Financial GroupCEO Theodore L. Chandler, Jr., whocomes from the business lawyer ranks,is like whitewater rafting. “To competeand excel,” he says, “you need the bestpeople in the raft with you, including aGeneral Counsel with a multidiscipli-nary view of the company.”

Alfred Mockett, CEO of Austin-basedMotive, a leading provider of manage-ment automation software, recalls thatthe task of searching for a new GeneralCounsel for his former company,American Management Systems, waslike “looking for a shadow CEO.”

The corporate General Counsel nowplays into the CEO succession plan likenever before. Companies have begun torealize that the person they recruit intothe General Counsel role must be some-one capable of one day assuming theCEO role. If the General Counsel is per-ceived to be a strategic business thinkerand savvy leader, that’s going to buythe organization good support fromWall Street analysts, investors, the mar-ketplace, and employees alike.On the Path to CEO

I expect to see more top corporatelawyers make the move to CEO. Themarketplace is forcing CEOs to thinkmore like lawyers, and lawyers tothink more like business leaders with abroader view of the organization, itsmarket, competitors, and people.

This could go down as the decadewhen the corporate lawyer is the topcandidate for the CEO suite. The cur-rent shape of a successful CEO’s skillsalign well with the skill-sets of a busi-ness lawyer: strategic thinker, quickstudy, cool under fire, bias for action,critical thinker, grasp of Sarbanes-Oxley,and the communications veteran.

When it comes to recruiting topbusiness lawyers, it’s no longer just,“We need a General Counsel, and let’sfill that role.” The CEO and Board nowlook to the General Counsel to be theirlegal counsel, trusted strategic advisor,and possible next CEO; and so thedemands of the job and the search forthe best legal talent will intensify inidentifying, assessing, and choosingthe right candidate. LE

Kathryn Griffin is a managing director at Slayton SearchPartners, and one of the nation’s leading recruiters of legal andbusiness executives. Call 202-293-8030 ext 201 or email [email protected].

ACTION: Consider your next CEO.

by Kathryn Griffin

LEADERSHIP LAWYERS

L a w i s a p a t h t o t h e t o p .


phrase “I have a dream” eight times. Hisability to articulate his dream united andinspired millions of people to usher in anew era in civil rights. Dreams have thepower to change the world.

To understand how leadership cantransform organizations, communities,countries, or the world, we must under-stand and harness the power of the dream.

Since 1996, I’ve worked with leadersworldwide by sharing a philosophy wecall Higher Ground Leadership, the goalbeing to change the world by reawak-ening spirit and values in both profes-

sional and personal lives. We’veachieved some amazing results. Yet foryears, we focused on the processesrather than outcomes with our clients—in other words, the means rather thanthe dream. Although we were realizingdreams through the application ofprocesses, it occurred to us that wecould be more effective if we first iden-tified the dream and then designed theprocesses to realize that dream.

So, we now invite leaders todescribe their dreams, identifying theirmost extraordinary, never-before-achieved aspirations. We ask them tobe fearless and imaginative, to be out-rageous and extraordinarily creative.

They come up with some remark-able ideas—hospitals that eliminate allavoidable deaths, banks that increasemarket share by 10 percent in one year,corporations that become environmen-tally friendly, communities that growinto world-class centers of excellenceand innovation, States that reinventtheir education system and rethink therole of prison inmates, organizationsthat change the world. These are not

OVER THE LAST 50years, we’ve

become experts inquantification, measurement, andanalysis. We have metrics for every-thing. But many leaders have losttheir capacity to dream. Instead, theycreate mission, vision, and valuesstatements. Compared to the inspiringpower of a dream, a mission state-ment feels stale and barren.

A dream is the unifying experiencethat all winning teams, great endeav-ors, and extraordinary achievementshave in common. A dream is theunique shared characteristic amongpeople who achieve the extraordi-nary—creating revolutions, overthrow-ing despots, founding nations,climbing Everest, reinventing organiza-tions, making breakthroughs, or chang-ing the way we live or think. Each ofthese is initially powered and then sus-tained by the passion of a dream.

I’m not talking about a six sigmaprogram or 5 percent improvement inemployee satisfaction—but a bold,daring, impudent, audacious, outra-geous, thrilling, inspiring dream. Dream Power

How did we land a man on themoon? Jack Kennedy had a dreamthat millions embraced, making ittheir own and making it real. Indeed,the dream was so powerful that itrestored America’s self-esteem afterthe launch of Sputnik, galvanized thenation, and inspired the rest of theworld. Dreams transcend differences,disagreements, and petty argumentsand engage us in a higher purpose,uniting us as one. It is this elusiveoneness for which we all yearn.Dreams are almost unique in theirpower to achieve oneness.

Great historical leaders—Christ,Buddha, Lao-Tzu, Confucius, Moham-med, Nelson Mandela, Mother Teresa,and Martin Luther King, Jr., amongthem-—all knew how impactful adream can be. In his famous 1963speech at the Lincoln Memorial inWashington, DC, King repeated the

ideas that fit easily under a heading off“mission, vision, and values.” We needa larger container to accommodate suchmagnificent ideas. We need a dream.

So we ask our clients to believe inthe dream, to assume that the dream isrealizable, and to imagine that whentheir energies are harnessed behindthat dream, it will be achieved. Anorganization with 10,000 employeesand a dream, that harnesses this totalenergy—the passion of every employ-ee—behind that dream, stands a greatchance of achieving it!Plate Spinners

How do leaders help to create andrealize a dream? Think about thoseplate-spinning circus performers whobalance plates on the ends of sticks.Typically, after the spinners get seven oreight plates going, the first plate startsto wobble, and they have to race back tore-spin it. They repeat the process tokeep all the plates from falling.

I think of a leadership team as platespinners. The plates represent theinspiration of others, and the team’srole is to keep the inspiration going. Aplate drops when we do anything thatsucks the passion from the dream. Thetop team’s role is to never do anything—I repeat, to never do anything—that isuninspiring or demoralizing to thepeople who are united in their effortsto achieve the dream.

And the team directly responsiblefor leading those who are realizing thedream must be fully inspired, too—allof the time—inspired to live their livesin a way that inspires others. All of thetime. No dropped plates.

The leader’s purpose is to inspireeveryone, every day, all the time, inevery way, in every communication andaction—so that every action, feeling, andrelationship moves people closer to real-izing the dream. The first act that demor-alizes someone who’s trying to realize adream will break the spell, trash the pas-sion, and waste the opportunity.

When we think about what’s possi-ble, even if never attained before, iden-tify it as a dream that we hold dear,and then commit to aligning the entireteam or organization behind every-thing necessary to achieve thatdream—the dream becomes possible.

Martin Luther King, Jr., showed ushow. So did Jack Kennedy. So can you. LE

Lance Secretan is founder of The Secretan Center, a consultingpractice specializing in cultural and leadership transformation toachieve extraordinary performance. His new book is One: The Artand Practice of Conscious Leadership. E-mail:[email protected].

ACTION: Share a bold dream.

PERFORMANCE PURPOSE


by Lance Secretan

Bold Dreams T h e s e u n i t e p e o p l e .

vacant positions—and 40 percent ofworkers are seeking a new job. The com-petition for talent is accelerating.

In the U.S., the retirement or semi-retirement of the Baby Boomers, com-bined with the booming economies inAsia, are squeezing the supply of tal-ented people. Talented foreign stu-dents no longer automatically stay inthe U.S. to find jobs. In fact, 80 percentof the Chinese students now studyingin the U.S. say they will return toChina after graduating.

These data points tell me that wehad better make our organizations wel-coming and motivating places.Formula for Keeping Talent

So how do we attract and keep talent-ed people? Beyond good salaries, inter-

esting work, good work environments,choices, and flexible schedules, there issomething more—what I call culturalaspirations. At Herman Miller, our formu-la looks like this: Performance + Inclu-siveness + Purpose = Talented People.These three qualities create a culture thatwill attract talent and keep it here.

1. Commit to high performance. Thebest organizations are driven by a cul-ture of performance. They have a clearpicture of what high performance is,they measure it, and they pay and pro-mote people based on it. In his bookThinking for a Living, Tom Davenportsays that nothing is more crucial tohigh performers than strong, diverse,and knowledgeable networks of per-sonal relationships. Winning organiza-tions cultivate such networks.

Innovation and the expectation ofhigh performance must extend to allparts of the company. The demand forhigh-performance leads to more highperformance. It also requires high per-

The Race for Talent

ACHIEVING AND CAPI-talizing on inno-

vation rests squarelyon people. Technology doesn’t inno-vate. Venture capital doesn’t innovate.People do. To attract the best andbrightest people, leaders need to pur-sue three cultural aspirations—perfor-mance, inclusiveness, and purpose.

At Herman Miller, we have a per-spective on those three goals—a per-spective that continues to evolve after75 years. We became connected withinnovation, and the design talent thatsparked it, in 1930 with the help ofGilbert Rohde, an early proponent ofmodern American design.

Our connections to talented design-ers—Rohde, Charles Eames, GeorgeNelson, Isamu Noguchi and others—drove our growth through the 1950sand 1960s. Such connections—to DougBall, Ayse Birsel, Jeff Weber, Studio 7.5of Berlin, and Eric Chan—continuetoday. Talent, both outside and insideHerman Miller, is the basis for ourinnovations in products, HR, IT, opera-tions—every part of the company.Talented People Produce Innovation

Most executives assert that innova-tion is among their top three priori-ties. Innovation has become the HolyGrail. Most leaders want it, but don’tknow how to get it. In fact, two-thirdsadmit to making poor progress.

Innovation lies at the heart of ourability to grow. Our future—and thatof every organization—is in talentedand creative people.

Malcolm Gladwell, author of TheTipping Point, notes that innovation isthe heart of the knowledge economy,and it is profoundly social. LarryPrusak, former head of IBM’s knowl-edge group, believes that all work issocial. People and their interactions pro-duce innovations. Yet attracting talentedpeople and creating the social work set-tings that make them stay and be pro-ductive is getting more competitive.

Two years ago, the Bureau of LaborStatistics predicted a labor shortfall in2010 of 10 million. Last year, half ofManpower’s clients could not fill the

PEOPLE RETENTION

I n n o v a t e t o g a i n t a l e n t - s h a r e .

formance from leaders.2. Seek diversity and value inclusive-

ness. By the year 2050, there will be noethnic majority in the U.S. At thismoment, there is no ethnic majority inCalifornia public schools. Only 15 yearsfrom now, minorities will make up one-third of the American workforce.

For us to have the talent we need tocompete effectively with the best glob-al companies, we must create an inclu-sive community in West Michigan,where most of our employees live, butalso at our sites worldwide. Our chal-lenge is daunting, due to the largelyhomogenous area in which our busi-ness is headquartered; but most com-panies face similar issues to somedegree or another.

Why is inclusiveness so important?Differences lead to innovation. Thefriction of different points of view pro-duces new products, new ideas, newapproaches. People want to work forand buy their goods from organiza-tions that reflect themselves. And, thebigger the talent pool, the more likelyyou are to get the best people.

3. Pursue a larger sense of purpose.People are looking for more than just apaycheck: 96 percent of U.S. workersprefer flexible work hours; 86 percentof workers say that a balance betweenwork and life is among their careerobjectives; 73 percent of the people saythat they would put their careers onhold for their families. These statisticspoint to a huge shift in priorities.

Herman Miller founder D.J. De Preeonce said, “A business is rightlyjudged by its product and service, butit must also face scrutiny and judg-ment as to its humanity.” This sentenceis inscribed on our Main Site building.Such inscriptions keep CEOs awake atnight—and inspired to do the rightthings for the right reasons.

Building a sense of purpose into ourlives may be the most important factorin our efforts to attract creative andeducated talent. A sense of purposemight take many forms—protecting theenvironment, reducing poverty or illit-eracy, or improving education. Weencourage people to get involved insuch projects. The best people want tolook and work outside themselves—and outside their organizations.

To lead with innovation, you need thebest people. Getting them isn’t easy. Butthe payoff can be wonderful—even if theart of leading them isn’t easy, either. LE

Brian C. Walker is CEO of Herman Miller. Visit www.hermanmiller.com.

ACTION: Attract and keep top talent.


by Brian C. Walker

relying on after-market partners, andgrowing through mergers are not mutu-ally exclusive as companies that have tointerpret complex data also growthrough acquisitions and rely on after-market partners. Whatever the driver,the goals are to protect brand image andto retain or increase profit margins.

Good certifications involve assess-ments that accurately identify skill andknowledge deficiencies to shorten thetime it takes to developpeople’s proficiency, mini-mize the cost of training byconcentrating only onareas of need, and helpdistinguish a companyfrom its competition. Evencompanies that rely onprofessional and industrycertifications, such asaccounting and engineer-ing, must implement theirown programs to assurethe workforce can use theirsystems and processes and supporttheir product mix.

Certifications require a more disci-plined management system to be effec-tive. For example, performancerequires more than skills and knowl-edge. It requires accurate and timelyinformation, well-designed processes,efficient systems, sufficient resources,and appropriate incentives. Withoutthese elements, people’s ability andincentive to do a job well is compro-mised. The appreciation for all that isrequired for a worker to be effective isone reason companies are rejecting thetraditional model of certification andimplementing a performance model.

The traditional model of certificationinvolves taking training and passing a test.However, experience, training, and testingdo not guarantee performance on-the-job.What companies need is a program thataddresses barriers to performance as wellas measure how well people can do atask in the work setting. Performance-based Assessment

There are two types of performance-based assessments. The first is a simu-lation that uses scenarios or examplesof real data or product specifications.People are asked to analyze the infor-mation and select the best response

among a series of plausible choices.This assessment more safely tests prob-lem-solving skills before the workerinteracts with the actual customer orsteps foot on the production floor.

The second type puts the responsi-bility on the supervisor to observeemployees in customer or team inter-actions and judge employees’ job out-puts whether it is a report, a physicalproduct, or an analysis of data. Thisrequires well-defined performancemeasures, standardized checklists, andimplementation protocols that assurefairness and validity.

At the same time organizations arebuilding certifications, workers, too, areearning credentials from vendors andprofessional associations. In the computer

industry, manufacturersand vendors offer certifica-tions that customers requireas part of the hiring criteria.Professional societies andtrade associations are alsooffering certifications.Many are based on testsof a common body ofrequired knowledge.However, some are adopt-ing performance tests. Oneexample is a performance-and competency-based

credential—Certified PerformanceTechnologist (CPT)—offered by theInternational Society for PerformanceImprovement (ISPI) for the learning andperformance professional. This certifica-tion relies on attestations by the practi-tioner’s employer that the person’s workwas of value (performance) and anassessment by trained reviewers of thepractitioners’ work description (compe-tency). The ISPI credential was developedin response to customers wanting to bet-ter identify capable practitioners, and thestandards were developed by customers,not by practitioners and academics.

If your company is consideringdeveloping a certification, ask what thecompany expects to be different as aresult, what business problem it is tryingto solve, and how will success be deter-mined? Use this information to designthe credential and to measure its effec-tiveness. If the certification uses anassessment instrument or process, con-sider making that assessment as similarto the work and work setting as possi-ble. Identify the people who rely on thework being executed well and incorpo-rate their expectations in the criteria. LEJudith Hale is director of certification for the InternationalSociety for Performance Improvement. She’s the author ofPerformance-Based Certification. Email [email protected].

ACTION: Develop a certification.

LEADERSHIP RELATIONSHIPS

LEADERS ARE EXPERI-menting with new

ways to develop andretain capable people. They know thatbeing competitive depends on theirpeople doing their jobs well, and yetthey are faced with the challenges ofreplacing an aging workforce on thebrink of retirement with limited quali-fied candidates, keeping sales and ser-vice personnel current on increasinglysophisticated products and changingregulations, and offsetting shrinkingmargins due to lower-cost competitors.

Two experimental solutions are out-sourcing and certification. Leadersoutsource non-core functions to lowercosts by reducing headcount, focusingon their strengths, and avoiding long-term financial commitments—such asretirement benefits and healthcarecosts; however, to work effectively,outsourcing requires higher skills andvendor and program management. It’snot a good solution for jobs whereinemployees create and make use of thecompany’s product and market intelli-gence. For such hard-to-replace jobs,companies are looking to certification.Who Is Certifying and Why?

Certification is being implementedby organizations whose people: 1) useand interpret complex data, such aselectronic, scientific, financial, and mar-ket data; or 2) sell, install, calibrate, andservice suites of products, or productsthat have to interface or integrate withmulti-generational-technologies.

Companies that grow throughmergers and acquisitions are alsousing certification to cross-train theold and the newly acquired workersquickly. The assessment is used toaccurately identify skill deficiencies sopeople receive only the training theyrequire. Other companies implement-ing certification are manufacturersthat depend on dealerships and dis-tributors to sell and support theirproducts. These companies must helptheir distribution channels developand assess workers’ abilities.

Analyzing complex data, integratinglegacy systems with new products,

Certificationby Judith A. Hale

I t ’ s a r e t e n t i o n s t r a t e g y .


the big issues that make a difference, isusually an incremental process.Quantum theory, the polio vaccine,Cubism, the Double Helix, the IPod—all these landmark breakthroughs inbusiness, science, engineering, and thearts came about only after years of try-ing and “trialing,” of mistakes andmissteps, of correcting, refining, and,yes, trying again. Intuition helps, sodoes blinking, but it is rarely sufficient.As the Talmud says, “Expect miracles,but don’t count on them.”

So, having come face to face withour belief that good judgment is theessential genome of good leadership,

we have tackled it head on and comeup with a framework for understand-ing how good leaders go about mak-ing good judgment calls.

We don’t pretend to have all theanswers—or asked all of the possiblequestions—but we have watched hun-dreds of leaders making thousands ofjudgment calls. We have seen goodcalls and bad ones. We have seen lead-ers make so-so initial calls and thenmanage and re-tune them mid-air toproduce brilliant results. And we haveseen leaders make spot-on, inspireddecisions and then end up in the ditchbecause they didn’t follow through onexecution, or they looked away andmissed a critical context change. Wehave learned, a lot. And by putting ourbrains—and experiences together—wehave come up with our framework.The Framework

Despite the implications of the wordcall, the judgment calls that leaders makecan’t be viewed as single, point-in-timeevents. Like umpires and referees, leadersdo, at some moment, make a call. Theymake a determination about how things

Sound Judgment

THE LEADER’S MOST IMPORTANT ROLE ismaking good judgment calls in

three domains: key people, strategy,and crisis. Great leaders have a highpercentage of good judgment calls; theyare only good if the execution is success-ful. The second most important roleyou play is to develop other leaderswho can make good judgment calls.

We all make thousands of judg-ment calls, some trivial and somemonumental (whom to marry, whatcareer to pursue). The measure ofyour life success is the sum of all ofthese judgment calls—the good onesand bad ones and the cumulative con-sequence for the quality of life. Theimportance of making good judgmentcalls is magnified many times whenyou take on a leadership role becauseof the impact on the lives of others.

In your role as a leader, how can youmake better judgment calls—and helpother leaders to do the same?

Experience is very important indeveloping judgment. People whoexercise good judgment draw on theirown experiences for guidance, andgood leaders expose others to a varietyof experiences for the specific purposeof helping them develop their ownjudgment. But there is a lot more to itthan flying by the seat of your pants.

We often hear, and sometimes eventhink to ourselves, that judgment islargely about accessing intuition orhaving a gut feeling. Or you “blink”and have a wondrous epiphany.

These statements of non-rational“thinking” certainly do feel true, and itmight be that in a sense they are true.There is the moment, as GE CEO, JeffImmelt, puts it, when “Boom, I decide.”But to the extent that it’s true, it is ashort-hand description for a complexweb of other thoughts and activity.

Good judgment is not one terrific“aha” moment after another. In thereal-world, good judgment, at least on

LEADERSHIP JUDGEMENT

T h e e s s e n c e o f l e a d e r s h i p .

should proceed. But unlike umpires andreferees, they cannot—without riskingtotal failure—quickly forget them andmove ahead to the next play. Rather, fora leader, the moment of making of thecall comes in the middle of a process.

That process begins with the leaderrecognizing the need for a judgmentand continues through successful exe-cution. Leaders are said to have “goodjudgment” when they repeatedly makejudgment calls that turn out well. Andthese calls often turn out well becausethey have mastered a complex processthat unfolds in several dimensions.• Time: We have identified three phas-

es to the process: Pre—what happensbefore the leader makes the decision.The call—what the leader does as he orshe makes the decision that helps itturn out to be the right one. Execution—what the leader must oversee to ensurethe call produces the desired results.• Domain: The elements of the

process, the attention that must be paidto each of them, and the time overwhich the judgment unfolds varieswith its subject matter. We have identi-fied three critical domains in whichmost of the most important calls arerequired: 1) judgments about people; 2)judgments about strategy, and 3) judg-ments in time of crisis. • Constituencies: A leader’s relation-

ships provide the information and themeans for executing the call. A leadermust interact with these different con-stituencies, consider their various inter-ests and manage those relationships tomake successful calls. And to improvejudgment-making in the firm, the leadermust use these interactions to help oth-ers learn to make successful calls.

We have identified four types ofknowledge needed to do this: self-knowledge—personal values and goals;social network knowledge—regardingthose who surround you daily; organi-zational knowledge—people at all lev-els; and contextual knowledge—themyriad other stakeholders (customers,suppliers, government, stockholders,competitors, and interest groups).

We offer this framework to help youimprove your judgment-making facul-ties, to do a better job of developinggood judgment in others, and toencourage a more vigorous conversa-tion about judgment. We need moreleaders with better judgment. LENoel Tichy and Warren Bennis are coauthors of the forthcomingbook: Judgment: The Essence of Leadership, from which thisarticle is adapted with permission. Visit www.noeltichy.com.Warren Bennis is a distinguished professor of business admin-istration at USC and an advisor to Harvard Business Schooland others.Visit [email protected].

ACTION: Cultivate better judgement.

1 0 L e a d e r s h i p E x c e l l e n c e

by Noel Tichy and Warren Bennis

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F o r m o r e i n f o r m a t i o n o n o u r m a g a z i n e s a n d o t h e r g r e a t l e a d e r s h i p d e v e l o p m e n t p r o g r a m s , p l e a s e c o n t a c t :

ideas; respectful of people, and friend-ly to a different view of work as a sys-tem—not a series of isolated activitieswith imposed job descriptions, hierar-chy, and quarter-to-quarter thinking.This is replaced by long-range vision-ing; true customer service—placing thecustomer at the center of each transac-tion; sharing values that build trust,transparency, and ethical behavior;and responding to work-related prob-lems as an act of variation with no oneto blame or chastise.

During this transformation from iso-lated problem-solving to viewing work

as a system, the traditional hierarchy is atrisk. Ultimately, what is at risk is thevery concept of control. At the heart ofthis transformation is the notion ofwho should own the work; how wevalue work and view it; and what thedesign of the work should look like.

Who should decide these issues? Ifmanagement decides, people will sim-ply go through ghost-like exercisesand fail to enjoy any lasting or mean-ingful transformation. And, employeeswill be frustrated; stakeholders anddirectors disappointed, and valuabletime and resources wasted.

It is incredibly powerful to manageservices end-to-end, removing func-tional hierarchical designs, replacingthem with system designs that engagepeople, root-out corruption and crony-ism, and enable people to measuretheir own performance, respond tovariation in production, and ask “off-team” members who choose neither tobe responsible nor accountable fortheir actions, choices, or behaviors.

Frontline ownership is possible inevery transaction. This is what creates

ownership, passion, creativity, produc-tivity, morale, and commitment—notvalue-stream management. Three Steps

Changing the system requires chang-ing roles and measures in three steps:

Step 1 is when teams of staff mem-bers, with help from internal experts,focus on their processes, and see themas part of a larger system. The resultswill be positive: customers will beserved, and commitment, creativityand enthusiasm will be high; but ifthese staff members and experts focuson their numbers— which are oftenarbitrary to begin with (yet their pay,promotional opportunities and career arejudged by them), the process likelywon’t improve; and that’s when thecheating, falsifications, political rival-ries, manipulations and blame-gamesbegin, with customers and productivi-ty being the losers!

Step 2 is to remove performance mea-sures that undermine performance,and replace them with measures thathelp you improve the work within aprocess. Leaders and staff membersalike have to un-learn old thinking aboutmeasurement and work with measuresthat are more valid and useful inunderstanding how their work works!

Measures that focus on variationand not on an obsession with trying tostandardize everything are the key tothis new way of thinking about work,performance, and productivity.

The mentality that believes that“tools can solve our problems” is replacedwith “we’ll use tools to understand ourwork and improve our approach to varia-tion and stop blaming workers for thisvariation.” Variation isn’t removed bystandardization practices using poli-cies, procedures and quota systems; it’saddressed by studying the predictabili-ty of variation and getting everyoneinvolved in improving our systems byunderstanding the systemic causes.

Step 3 entails a new way to look atbudgeting. If you forget about the“money,” any transformation will beflawed! Budgets are a reality. Re-think-ing the way we conduct budgeting fromthe developmental, methodological andfinal completion cycles is a key in sus-taining a transformation. If the budgetremains a sacred cow, the ManagementFactory will remain intact, and nothingwill change except for one thing—wastein the system will continue to grow. LE

Rob Lebow is chairman of LCI, a change management trainingand culture research firm. Visit www.lebowco.com.

ACTION: Improve your systems.

MANAGEMENT SYSTEM

LEAN THINKING CAN BEapplied by anyone

anywhere, but its fullpower is only realized when it isapplied to all elements of the enter-prise and when work is viewed as awhole system. All enterprises shouldbe seen and managed as a system,and this change in thinking can’t bemade simply by designing tools.

Lean tools are all natural expres-sions of how to solve or fix problems.But, tools often create unexpected orunintended results. Most leaders whouse lean thinking hope for a transfor-mation from their manufacturing orservices culture to a lean organizationwhere everything goes on schedule.Sadly, applying the tools doesn’t oftentransform or change time-honored sys-tems at the core, but applying the righttools get managers closer to the heartof the solution—a new way of think-ing about work at the design level.The Overuse of Tools

Tools are often overused becausethey can be applied in isolation with-out tackling the difficult tasks ofchanging the management approachor philosophy. Upsetting manage-ment—the very hand that feeds them—isthe last thing that “tool merchants”want to do. Implementing tools alsodemonstrates activity and forthrightleadership, and often wards off criti-cism of doing nothing to fix problems.

Sadly, tools won’t change a system.Tools help only when the context oftheir use is in concert with first takinga different view of the work. Tools canand should be used to manifest prob-lems people can only solve by viewingthe work as the system—not ignoringtools, but not over-relying on them.We shouldn’t teach tools as the finalanswer to solving or fixing problems.It is the different view—the way youconceptualize the problems—that counts.The key to transformation is develop-ing a method for helping everyonetake a different view of their work.

This is how values-based transfor-mation works. It promotes a culturalchange that becomes open to new

Lean Thinking by Rob Lebow

See and manage your firm as a system.

L e a d e r s h i p E x c e l l e n c e 1 1

tell my boss, who knew I’m no pensionwhiz—should I grant the request?

Leaders have to decide when to cutemployees slack and when the organi-zation must come first. They are facedwith special requests from employeesinvolving sick children, spouses, orparents; or school recitals, doctor’sappointments, college visits, soccergames, athletic events, extra vacationtime, or long weekends. Some of these

seem weighty and important; others

can seemtriv-

ial.

Conventional wisdomwould suggest I simply tell him thattrick-or-treating, while important tohim, is insignificant given the impor-tance this meeting. I wasn’t afraid totell him that he had to attend. At PepsiI was considered a demanding bosswith high performance standards. Butthat’s not what I decided to do.Instead, I decided to give him a passbecause I had come to understand theLaw of Personal Commitment. It statesthat if a leader wants a subordinate to becommitted to the success of the leader andthe leader’s organization, then the leadermust be committed to the subordinate—tohis or her growth and development,and to what’s important to him or herboth inside and outside the office.

I told him I thought he was carryingthis trick-or-treat thing to extremes. ButI recognized this time with his kidswas important to him. So I asked himto bring me up to speed and teach meeverything he could about this pensionstuff. And I covered for my manager,telling my boss that he couldn’t makethe meeting because he had an impor-

Commitment

ALL SUCCESSFUL LEAD-ers I’ve known

became successfulbecause of commitment to their ownsuccess. Corporate life is demanding,and it takes an intense achievementorientation. Executives must be pas-sionate about being outstanding per-formers, meeting or beating theirtargets, and driving performance.

Perhaps commitment to one’s successis a just another way to describe ambi-tion. But I use the word commitment fora reason. This story explains why.

I had been vice president and chiefpeople officer for Pepsi’s $3 billion U.S.business for less than a year. There wasa possibility of a work stoppage in ourmost profitable market, since wedesired to convert our employees froma Teamsters Union pension plan to acompany plan that would be lessexpensive for Pepsi to fund. Webelieved our employees were getting araw deal, since too much of Pepsi’smonthly contribution to the Teamsterplan was covering excessive adminis-trative costs, not employee benefits.The trick was convincing our employ-ees that our company plan would bebetter for them. But first my boss and Ihad to convince PepsiCo’s COO thatour intentions were worth the risk of along strike in a city that was a bastionof Teamster support.

Because I was no expert on pensionplan funding, I was bringing my ben-efits guru to the meeting. When heinformed me the day before the meet-ing that he was unable to accompanyme, I was shocked. He had a personalcommitment—he needed to take hisyoung kids trick-or-treating!

I was angry at my pension expert fornot telling me sooner. But my immedi-ate concern was to figure out what todo. Should I tell him, “I’m sorry, butI’m not willing to give you a pass onthe meeting?” He was a talented man-ager, and I didn’t want to alienatehim—and his family! Yet the next day’smeeting was a big deal—to me and mycareer and to the business, given themoney involved. And what should I

tant personal matter. So my boss and Iwent to the meeting, and I made thepresentation. The COO asked threequestions that I knew the answers to,we were done in 15 minutes, and hegave us approval to take the strike.

My pension expert, meanwhile, wasa little shocked at my decision. But,because I put my body on the tracksfor him, he saw that I cared about himand what was important to him. Ofcourse, he knew how ambitious I wasand how concerned I was about myperformance. But he saw that he was-n’t just another factor of production inmy career dreams. He realized I wasprepared to make a sacrifice for him.

He worked with me for another 11years, and was incredibly loyal andcommitted to me, to my success, andto our team performance.

The Law of Personal Commitmentmeans that you must be committed toyour subordinates’ careers as well asto your own and that to get loyalty,you must give loyalty. This commit-ment occurs in small ways—like get-ting back to a person when youpromised, making sure performanceappraisals are done on time, process-ing the salary increase when it’s due,being available to answer questions—and in big ways, like teaching andcoaching regularly.

Leaders, then, must be committed toa subordinate’s growth, development,and success as much as they are com-mitted to their own fame and fortune. Ionce had a boss who would go throughhis mail during our meetings. Thinkabout the signal this sent to me. He hadno interest in me as a person, only inmy productivity, and whether or not Iwas meeting his objectives. If a leadercares about his or her people, commitsdaily to their growth, and conveys thatcommitment, they will give 120 percent.That’s what my pension expert did forme, after I took a risk for him.

Great leaders are committed notonly to their own success but also tothe success of their people. There’s nofaking this commitment. People knowif their boss is genuinely committed.And there’s also no outside protocolthat a leader can follow to acquire thiscommitment. However, when a leaderestablishes some share of mind for thesuccess and concerns and needs of hisor her people, you’ll likely find a high-performing organization. LE

Michael Feiner is a professor of management and Sanford C.Bernstein & Co. Ethics Fellow at Columbia Graduate School ofBusiness. He is the author of The Feiner Points of Leadership(Warner Books). Visit www.feinerpoints.com.

ACTION: Show your commitment.

by Michael Feiner

PERFORMANCE COMMITMENT

I t d r i v e s h i g h p e r f o r m a n c e .


cause serious, even irreparable, harm.Employee Engagement

The Good: Google. Their leaders findways to ensure that everyone has avoice. One way they keep their earsopen to grassroots ideas is a policy thatallows engineers to spend at least oneday a week working on their own petprojects. The company also uses smallerteams to develop new concepts—some-times assigning only three or four peo-ple to a team. In contrast, Microsofttends to have many large teams work-ing on the same project. The lack of

communication and coordinationamong teams leads to problems. Googleavoids such problems by using smallteams whose members have more own-ership and accountability and can easilycommunicate and execute their ideas.

The Bad: National BasketballAssociation (NBA). The NBA intro-duced a new basketball but forgot toinvolve the players in the decision!Asking the players would haveincreased the quality of the ball andthe acceptance of the decision. As aresult, the players refused to use thenew ball, and the NBA had to scrapthe new ball and go back to old one.

The Lesson: Involve people whosesupport you need in decisions thataffect them. Employees shouldn’t feelthey exist only to help the companymake profits. They should be involvedin all critical decisions that affect themand freely share their thoughts andconcerns. This gives them a sense ofownership. Involvement and engage-ment should be built into a culture.Great ideas must not be merely wel-comed; they must be solicited.

Execution The Good: Hewlett-Packard. CEO

Mark Hurd said that whether or notacquiring Compaq was a good idea isnow irrelevant: what’s done is done,and his job now is to find a way tomake it work. He reorganized the com-pany into three divisions, with eachdivision having its own sales force,making the heads of the divisionsresponsible for sales. He also reorga-nized the IT function. Instead of having85 data centers, he centralized theminto three. So, he decentralized the salesforce and centralized the IT function—the opposite of the way the companywas organized—to better align struc-ture with strategy. Operating profitincreased by 31 percent during 2006.

The Good: Motorola. Another exam-ple of great execution, Motorola coordi-nated decisions and actions across workunits. While developing new mobilephones, the company assembled teamsthat included members of each majordepartment—design, engineering, mar-keting, and finance. Thus, they avoidedfalse starts, delays, and cost overrunsbecause all the key players were in-volved from day one. These teamsenable Motorola to see what con-sumers want from various perspectives.

The Bad: Ford Motor Company. In2006 Ford struggled to execute, allow-ing departments to clash with oneanother. Ford did a terrible job execut-ing on its strategies. For example, thecompany decided to update the FordFocus. The North American operationand the European operation eachdeveloped a new version. The twogroups couldn’t agree, so they eachdid what they wanted to do. As aresult, Ford couldn’t share parts ortake advantage of economies of scale.

The Lesson: Executing well is every-thing. It doesn’t matter how great yourstrategy or how brilliant your vision ifyou can’t bring it to fruition. Executionis the real bottom line—and it’s whatyou need to focus on as you seek toimprove performance. Companies thatexecute well: 1) coordinate actions anddecisions across work units and levels,2) have structure and systems thatsupport the strategy, 3) involveemployees in decision-making, and 4)manage change effectively. Post thesefour factors on your wall, and let themdrive every decision. One year fromnow, you’ll be glad you did. LE

Richard Lepsinger is president of OnPoint Consulting and co-author of Flexible Leadership (Jossey-Bass/Wiley). Call 828-267-6826 or visit onpointconsultingllc.com.

ACTION: Learn lessons from others.

MANAGEMENT EXECUTION

LEADERS OF EVERYstripe are reflecting

on the past year. Whatwent right? What went

wrong? Did we make progress towardour goals? Did our business grow?Did profits increase? Did the qualityof our products and services improve?Did our leaders truly lead? Were ourpeople motivated and engaged? If theannual soul-searching has you feelingoverwhelmed, learn from others.

Many major companies experi-enced dramatic failures and successes.Their mistakes can be instructive, andtheir victories inspiring. Innovation and Change

The Good: Procter & Gamble. P&Gmade 2006 a year to remember bydoing well in all areas of execution. Thecompany had a clear, unifying visionand strategy, coordinated its effortsglobally, focused on customers, andshared ideas to reach new customersand keep current ones. CEO Alan G.Lafley emphasized that the customer isking, and employees focused on devel-oping products that they knew P&G’scustomers would like.

The Bad: Dell. Companies can getstuck in a rut. After developing “theDell Way,” Dell became reluctant tochange. The company once attractedcustomers to its website with low-costoffers that required the buyer to makeadditions in order to have the bestcomputer, which meant the pricewould be more than the original low-cost offer. Now, consumers don’t haveto go to Dell to get a “custom-made”computer. When Dell realized theywere losing business to competitors,they fell back on an old practice: theycut costs to maintain market share.One place that suffered was customerservice, once one of their strengths.

The Lesson: To run a successful busi-ness, you need to create and implementinnovative strategies and adjust tochanges in the market. You have to beflexible. Embracing the spirit of inno-vation and change can help you reachnew levels of success, while beingrigid and unwilling to change can

Five Lessons by Richard Lepsinger

R e f l e c t o n t h e p a s t y e a r .



the difference across departments, orga-nizations, and regions.

Today’s leaders need to find theground truth—the idea that we mustreshape tried-and-true solutions andproducts to fit a new time, place, andcustomer. As we move beyond ourborders, we must seek to understandthe new markets and environments.

Edgar Bronfman, CEO of WarnerMusic, puts this idea into practice byholding “employee roundtables” where12 to 20 junior employees are given thetime and space to talk, create, and pro-vide a perspective thatcan be lost to leaders.Now people gripe lessthan they offer solutions,and Bronfman gets thecontext he and other lead-ers need to create an envi-ronment of high per-formance.• Become an architect of

innovation and collabo-ration. How can youdesign systems andstructures to cultivatenew leadershipapproaches? An optimal reward sys-tem would include a balance of indi-vidual performance and collaboration,innovation, and long-term thinking.

Google is a great example of thisapproach. Marissa Mayer, the Directorof Consumer Web Products, is build-ing a culture of innovation and collab-oration by providing “office hours”where any employee can pitch new(and often big) ideas.• Create an “idea listserve” where

anyone can suggest or comment onspeculative ideas.• Remain fearless and launch products

early and often.• Stay in touch with the ranks of

employees no mater how large thenumber swells. • Study the collaborative tools of

your own “positive disobedient”.Which of your leaders breaks the rules,remains effective in ever-changingenvironments, and gets results? Thereare leaders who have been honing theskills of collaboration, innovation, andrelationship-building for decades.These leaders live beyond the normsbut still manage to succeed.

Consider this example. At age 29,Richard Rosenblatt sold IMall toExciteAtHome for $565 million andthen was recruited by Intermix Mediato turnaround the company which injust two years resulted in a sell ofMySpace for over $580 million. Severallarge companies line up for his prod-ucts, yet few ask, “How does he do it?”

One might argue that this is thecurse of the positively disobedient—we forgive (ignore) the process to reapthe benefits. However, what wouldhappen if someone offered to simplyshadow Richard for six months for asmall fee? Would this bring a higherROI in the long term than the price ofa single product he has launched?

Organizations should begin taking acloser look at these (positive disobedient)leaders—exploring their successes in asystematic way. Now is the time to pull

these individuals from thefringe and make them(and their approaches)exemplars.• Upend the world of

interruption by develop-ing leaders in context.How do we find time todevelop leaders giventhe complexity and paceof work? We live in astate of continuous par-tial attention. It is nearlyimpossible to find thetime to complete our

day-to-day tasks, let alone the space todevelop ourselves in hopes of keepinga competitive edge.

To compete in the future, we willneed to meld actual work with develop-ment. One strategy is to create leadershipdevelopment experiences that utilizeaction learning as the central content;where personal insights can be gleanedin the context of real work, therebyavoiding major productivity loss.

Oganizations like the Army arereaping enormous returns from anaction-learning approach. Army com-manders are engaged in an ongoingconversation about how to build andlead combat teams. They have the abil-ity to share in real time and learn fromreal challenges and experience.

The job of the leader is to createspace for other people to generate newideas; to encourage meaningful con-versation; and to assist people inbecoming more effective, agile, andprepared for complex challenges. LE

Dr. André Martin is a senior researcher, writer, and trainer for theCenter for Creative Leadership. Email [email protected].

ACTION: Develop your future leaders.

LEADERSHIP DEVELOPMENT

THIS IS THE BEGIN-ning.” “The world is

flat.” “We are at a tip-ping point.” “We must reset our rulesets.” “The keys to the kingdom arechanging hands.” “All we have is the next24 hours.” No matter whose words weuse—Mau, Friedman, Gladwell,Barnett, Pink, or Enriquez—it is clearthat our world is undergoing a shift.As a new age of uncertainty and rapidchange emerges, new leadership skillswill be needed to stay competitive.

The Center for Creative Leader-ship surveyed 600 managers world-wide to explore the current state andfuture hopes of leaders. These leadersbelieve the definition of effective lead-ership has changed. So, how will lead-ership be different in the future? And,what is driving the shift? • Future leadership approaches will

focus on collaboration over heroics.Collaborative skills such as buildingand mending relationships, participa-tive management, and change man-agement are increasingly important. • Approaches to leadership will differ

from region to region as the nature ofthe challenges facing leaders changes.The challenges today are more com-plex, have greater strategic impact, gobeyond individual leadership capabil-ity, require working across bound-aries, and render tried-and-truesolutions ineffective.• Changes in the business context also

drive the need for collaboration. Thesetrends include: rapidly shifting compe-tition bases, globalization, competingstakeholder demands, a drive for inno-vation, unstable mergers and acquisi-tions, and a need for reinvention.

What can you do to prepare for amore complex and collaborativefuture? Here are some ideas:• Understand how to lead by uncover-

ing the “ground truth.” How can you beagile enough to lead in any context?Organizations in Europe and Asia-Pacific expect to have fewer boundariesand a greater reliance on leadershipapproaches focusing on emergent strat-egy and interdependent decision-mak-ing. Thus, leaders need to be aware of

Creating Leader 2.0by André Martin

W h a t i s t h e f u t u r e o f l e a d e r s h i p ?

short-term financial gain at the expenseof productivity and engagement. Theyalso measure pride, a prerequisite toretention and high performance.Leaders need to scrutinize the companythey keep and do business with entitiesaligned with their values.• Pay attention to behavior not rules.

A culture that operates with ethicalintent at every level is created by lead-ers who model desired behaviors, notby employees who follow policy.Paperwork that satisfies the scrutiny ofregulators won’t inspire the contribu-tion you need from every employee.Encourage people to do the rightthing, even when no one is looking.

• Earn trust every day. In a well-man-aged organization, only half the work-force will say they trust senior leaders,yet most executives rate themselves astrustworthy. This intent/effect gapresults from employees drawing con-clusions with minimum information—what is said in a meeting or a decisioncommunicated through the ranks—notthe other 90 percent of what leaders doeach day. So, leaders need to explainthe decision-making process and moti-vation for their actions.

3. Drive productivity and innova-tion through engagement. Leaders needto own employee engagement becauseengaged employees are more produc-tive, treat customers better, innovate,and stay. Don’t confuse employeeengagement with satisfaction andassume that a few HR initiatives cangive poor employee survey scores aboost. Engagement goes beyond satis-faction to reflect contribution. Engagedemployees are committed and alignedto apply their unique skills to con-tribute to priorities.

To boost engagement leaders should:

• Get rid of disengaged subversives(usually 8 percent of the workforce).These employees may not have startedout so alienated; bad practices or poorleadership may have pushed them overthe edge. They undermine productivityby dragging everyone down aroundthem. They’re a threat to the bottom line.• Provide meaning. It’s up to leaders

to help their people find meaning atwork. That meaning can take the formof personal connection with ambitiousgoals or achievement of more personalcareer aspirations. Leaders need toarticulate goals, paint a compellingvision of the future, and help employ-ees to connect the dots.• Make sure you are engaged. Disen-

gaged leaders lack the clarity of pur-pose or energy to engage others.Executives must be clear on the strategyand their top three priorities before theycan align everyone else. And if theycan’t articulate why they show up atwork, they need to stop “doing” andthink about what matters most to them.

4. Make talent management a busi-ness priority. Leaders need to have theright people in the right jobs focusedon the right priorities—and ensurethat employees have the informationand support they need to align theirinterests and career aspirations withthe organization’s goals. That dualfocus can reduce unwanted turnoverand create a sustainable competitiveadvantage. To achieve it:• Don’t “manage” your top talent.

These people have marketable skills,and so if they have their fate decidedby a succession planning committee ora well-intentioned manager, they mayhead for the door. Top talent demand tobe involved. They have their own ideasfor moving forward. The best leadersoffer desirable stretch assignments andspecial projects and encourage innova-tion and risk-taking. Align individuals’initiative with organizational priorities,and then get out of the way.• Develop the pack. Many leaders

provide elaborate high-potential pro-grams and only mediocre develop-ment opportunities for the rest. That’sa shaky foundation. Leaders need totirelessly align and coach team mem-bers. Consistent high-performing busi-nesses hold leaders accountable fordeveloping team members. Leaderswho actively coach are well-positionedto quickly redeploy talent to meetshifting business requirements. LE

Christopher Rice is president and CEO of BlessingWhite.Email [email protected], call 908-904-1000, or visit www.blessingwhite.com.ACTION: Excel in these priorities.

LEADERSHIP DEVELOPMENT

LEADERSHIP ISN’T GET-ting any easier. The

market’s obsession forquarterly earnings stymies even thebest strategists. Customers and high-performing employees have morechoices. Extreme transparency hasreplaced closed-door inner workings.No wonder CEOs feel like they have abig bull’s-eye on their backs.

Leadership requires a balancebetween business competence andpersonal connection. It’s no longerenough for leaders to be capable.They must also build authentic bondswith employees, customers, and otherstakeholders—a daunting challenge.To succeed, leaders need to focus onfour priorities.

1. Executive, develop thyself.Expectations of leadership have risenbeyond the capabilities of most seniorexecutives. The best leaders knowthey need to be compelling and inspi-rational, but they are often challengedby how to do it. What does it take?• Cast an objective eye. Know how

you measure up to today’s higherstandards and what impact youractions have. It’s easy to dismiss feed-back as grumbling, since the mostannoying employees are the first topoint out your flaws. It is critical,however, that you listen, not argue. • Take time to reflect on what drives

you personally. Personal values fuelconfidence and effective communica-tions. To be inspirational, you need tobe inspired yourself.

2. Correct cultural corruption.Compliance with the new laws andregulatory requirements might keepyou out of jail and your firm out ofthe headlines, but it won’t build a sus-tainable, high-performing organiza-tion. Cultural corruption isn’t aboutbreaking the law. It’s about bad busi-ness practices that undermine com-mitment. It’s about the chasmbetween leaders’ talk and actions.Prevent your high performers frombolting toward the door:• Watch for the little things that don’t

seem right. Audits and culture scanscan identify practices that may support

Four Priorities by Christopher Rice

Bui ld bonds with s takeholders .


Transition points are opportunities forbusiness transformation. Here are threeways to respond to transition points:• New management initiatives: These

initiatives must be designed to helpdrive growth, profitability, and share-holder value. Some companies intro-duce customer or quality initiatives.Others seek ways to reengineer theirprocesses or reduce operating costs.Some introduce initiatives to “digitize”or “globalize” their businesses. All suchefforts depend on successful changemanagement if they are to achieve theirobjectives. Leaders of such initiativesmust know how to ride turbulence.• Mergers and acquisitions: In the wake

of deregulation, the M&A movementhas driven vast change, particularlythrough mega-mergers. Firms consoli-date in order to address competitivechallenges and commoditizing markets,as well as capitalize on anticipated syn-ergies. Yet, two-thirds of all mergers failto achieve their objectives. Consolidatingorganizations, cultures, processes, prac-tices and systems is not easy. It takes

great turbulence riders.• Partnerships and out-

sourcing: These approachesenable companies to use thecapabilities of external par-ties as leverage, rather thanstruggle to buy or buildthem. By creating allianceswith specialists, enterprisescan acquire the capabilitiesthey need to compete effec-tively without bearing all the

risks associated with building theminternally. Outsourcing enables them toconcentrate on the core capabilities thatdifferentiate them while ensuring thatnon-core, yet critical and supporting,systems are effectively managed. Suchmoves enable leaders to anticipate andreact more rapidly to market change—and they get the capabilities and bene-fits now. Such “strategic multi-sourcing”is another way to thrive on turbulence.

While these three approaches toconfronting change involve risk, thereis more risk associated with failing toact. So recognize transition points andtake steps to address the changes theysignify. Markets are prone to “creativedestruction.” The acceleration ofchange only enhances vulnerability,while empowering and enabling chal-lengers to compete. Given these cir-cumstances, leaders must learn tomanage ongoing change. LE

John Bostick is president and CEO of dbaDIRECT which pro-vides data infrastructure management services. Email [email protected]: Respond to transition points.

Ride theTurbulence

AWAKENED LEADERSlead themselves and

their followers withmore than just technical and academicskills. They maintain high alertnesstoward themselves, the people theyguide, the organization they lead, andthe environment in which they operate.

Awakened leaders share five traits.1. They are driven by more than

objectives. Although they know thatthey have obtained their position tolead the organization toward growthand profits, they know well who drivesthe organization: the people. Thus,awakened leaders ensure that every-one involved—workers at all levels,shareholders, suppliers, customers,neighbors, and all others at stake—aretreated well. They ensure that theobjectives are aligned to the well-beingof the people involved. And theyensure that they are kept abreast oftrends in the environment. Seeing lifeas a gift, awakened leaders refrainfrom setting objectives that can harmthe quality of life. And if certainprocesses are potential hazards to thehealth of some people, they search foralternatives so that the quality of life ofeven those whom they do not know, orhave not encountered yet, is secured.

2. They are value-based. Awakenedleaders base their decisions largely onvalues—the set of personal rules thatthey develop as they grow up. Thesecome from home, school, religion,books, and other impressions. Valuesdiffer from person to person, culture toculture. Two awakened leaders fromentirely diverging cultures can makevery different decisions or very similardecisions. Awakened leaders knowthat there is no single way of leading,and that different decisions can all leadto useful outcomes. They know that itis not necessarily the nature of the deci-sion, but more the actions undertakenafter the decision has been made, thatmake it a successful one or not.

3. They have integrity. Integrity goeswith trustworthiness and honesty.Knowing the importance of their fol-lowers believing in them, awakened

Face the winds of change.

AS A C E O , I A Moften the face and

the spokesperson ofmy company. So, I travel for variousreasons: sales calls, media interviews,customer visits, negotiations withpartners—you name it, I’ve had a meet-ing about it. In fact, this flow of needs,objectives, and requirements is one ofthe things I enjoy most about my job.

For the most part, I enjoy being outthere, watching business people dotheir stuff. I even enjoy a patch of tur-bulence now and then. Why? Becauseturbulence—and the response it drawsfrom flyers—tells me a lotabout business people andreminds me of a few thingsabout myself.

During a recent flight, Iobserved how people on theplane react differently whenturbulence hits. Some peoplestop what they are doing,tighten their seatbelts, foldtheir arms, and try to waitout the chop. Others keeptrying to write notes, work on theirlaptops, or read magazine articles.And a few, like me, keep switchingactivities based on what works,regardless of the bumps.

I see parallels between the responseto turbulence on a plane and theresponse by business leaders to theaccelerating pace of change. Many oper-ations managers react to the dynamicenvironment like the first and secondgroups of air travelers. They wait for thedisruption to pass, or try to forge ahead.But they have no way of knowingwhether the turbulence will stop, getbetter, or become more predictable. Theenvironment is not in their control. Onlytheir response to it is in their control. So,riding the flow of the turbulence is theonly way to find a productive activity.

In today’s changing atmosphere,business is a bumpy ride. And execu-tives should take technological dis-ruptions as opportunities to transformbusiness practices and processesrather than shut down operations orcontinue counter-productive activities.


by John Bostick

AwakenedLeadersLead with integrity.

by Joan Marques

CHANGE TRANSITION ETHICS INTEGRITY

leaders always come up with thetruth—even when it is not as beautifulas they would want it to be. They real-ize that if people are told what’s goingon, they will be more understandingand more willing to do whatever ittakes to get things straight. Whenasked what qualities they would like intheir leaders, people always mentionintegrity at the top of the list. As adultswe all know that it’s not always pleas-ant to hear the truth. But we wouldrather deal with the truth now thanwith a beautiful lie that only bringsmore headache, pain, and adjustmentslater. Awakened leaders opt for integri-ty because they want to maintain theirinner peace. And that is only possible ifthe truth is communicated at all times.

Their integrity is reflected in theircommunication with stakeholders, andin the way they guide the organiza-tion. Involvement in questionablepractices is taboo, even if the futureseems to depend on it. They believethat with the right intentions towardthe people, the business, and the envi-ronment, a better option will surface.

4. They have genuine compassion andrespect for those they lead. These leadersare down-to-earth people who respectevery member—no position is perceivedsuperior or inferior to another. They seethe facts of life in their right perspective:everything is of equal importance togreat business performance—the sourceof their livelihood. So they treat eachworker with respect. They mingle withtheir people regularly to establish con-nection and create goodwill and sup-port. They also mingle because theyrealize that teachers appear at the mostunexpected moments and places. Theyare ready to learn from every person.

5. They touch the spirit of the people.They provide a sense of meaning to peo-ple. They update meetings, companygatherings, family days, and encouragetheir people through email, flyers, ordepartmental sessions. They know thatthe people have family members and alife—hobbies and skills—and so theyencourage people to share those skillswith others. They might consider a talentnight, or encourage co-workers to create apleasant workplace, with pictures anddrawings from the kids. They hold meet-ings in which people get to ask questions.

Awakened leaders recognize thatworkers are spiritual beings with vari-ous qualities, and they encourage peo-ple to cultivate those qualities. LE

Joan Marques is a professor of business and management atWoodbury University and co-founder of the BusinessRenaissance Institute. Visit www.bri-usa.com.

ACTION: Awaken your capacity to lead.

satisfaction, and two of every threepeople are looking for other work.

The problem, for most leaders, stemsfrom approaching leadership from theold transactional approach whererecognition is a tool to manipulate peo-ple to work harder and be more loyal,helping manager achieve their goals.

Since these managers approachrecognition with themselves—ratherthan their employees—in mind, theylook for quick-and-easy rewardsrequiring little thought or preparation,often settling for one-size-fits-allawards. Everyone gets a video rentalcertificate, a coffee card, a cash bonus,an event ticket, or candy bar.

Carrot Principle managers rewardpeople for performing tasks that arevaluable to the team or organizationand that help employees achieve theirpersonal goals. Such purpose-basedrecognition reinforces their self worth;it links people to the most importantactions; it leverages people’s unique

strengths and their potential;and it provides proof ofaccomplishment for employ-ees and their team members.

It all boils down to leadersand employees finding asense of purpose at workthrough achieving sharedgoals. When that happens,recognition takes on a differ-ent look and feel. For exam-ple, one leader supervised a

security guard who also had a passionfor conservation. This savvy managerrewarded the guard with a new title:Security and Energy ConservationOfficer. Now, during the man’s securityrounds, his auxiliary job is to turn offlights and close doors to keep in heat orcold. This simple change in duties andtitle brought job satisfaction to him anda tidy cost savings to the company.

Several years ago, St. Joseph hospitalhad a turnover rate of 32.5 percent.Within two years of implementing theCarrot Principle, St, Joseph doubled itsoperating margin from 1.5 to 3 percent.By the end of the third year, turnoverhad fallen to half its starting point, result-ing in a $4 million savings each year.

We invite you to put the CarrotPrinciple to work. Applying recognitionprinciples within a context of goal-set-ting, open communication, trust, andaccountability can make this be the bestway you have to lead people. LE

Adrian Gostick and Chester Elton are the authors of four best-selling management books. This article is adapted from their newbook, The Carrot Principle (Simon & Schuster). Visit carrots.com.

ACTION: Recognize your people in these areas.

EMPLOYEE RECOGNITION,long considered a

benefit that costsmoney, can actually make money fororganizations that do it right. It’s likediscovering gold in your backyard

At first blush, the idea is counter-intu-itive. As leaders, we tend to view recog-nition programs as a cost. But recognitionis evolving. Applying recognition tech-niques within a context of goal-setting,open communication, trust, and account-ability accelerates the impact of these crit-ical management skills.

That’s the Carrot Principle atwork; and here’s what it cando for you as a leader:• Increase profitability and

customer service levels. Returnon equity and return on assetsare three times higher in orga-nizations with an effective wayto recognize employee excel-lence. The teams and officesrated most highly by employ-ees in response to, “My manager doesa good job of recognizing employeecontributions,” also typically place inthe top scores for customer satisfaction.• Heighten employee engagement and

satisfaction. People who feel recog-nized demonstrate greater innovationand creativity, take more personalresponsibility, have a greater desire tocontribute to the success of the compa-ny, and develop a stronger emotionalbond to the organization and its goals.Recognized employees do more tohelp the company succeed, includinglead, innovate, and serve customers.Revamp Old-School Recognition

Most leaders believe they already areeffective at recognition. During the pastdecade, we have consulted with hun-dreds of top leaders. Our problem hasnot been convincing them that purpose-based recognition can help them toachieve their goals. Our challenge isgetting them to entertain the idea thatthey might be doing recognition wrong.

Most people report feeling unrecog-nized. Only 40 percent of employeesreport high engagement and high job

The CarrotPrincipleRecognition that works.

by Adrian Gostick

PEOPLE REWARDS


list of these. The question is not whowill make which decisions, but whatkey decisions will the team be making.• Identify decision sub-teams. For

each decision, assemble a sub-teamthat becomes responsible for makingthe decision. Identify the smallestnumber of people needed to make thedecision quickly, efficiently, and withan eye to a quality outcome. • Assign accountability. Every sub-

team needs a point person who is

responsible for driving closure. Bewareof the leadership reversion syndrome,which arises when the leader serves asthe point person on too many sub-teams. It comes dangerously close tothe old hierarchical model. • Select the decision-making mode.

There are three basic decision modes:unilateral—made by one person with noinput from others, consultative—madeby one person after getting input fromothers, or by consensus—everyone hasinput and everyone must agree.

Although most team decisions aremade consultatively, no one way isnecessarily superior to another, and noone way is appropriate for all types ofdecisions. No matter which mode ischosen, everyone must agree on andadhere to the selected mode.

For consultative decisions, the fullteam may identify the other relevantparties whose point-of-view will addvalue to the decision, or it may be leftto the sub-team to select those withwhom they will consult. In either case,ask: Who are the people who need tobe involved: as information sources,evaluators of the information, asses-sors of risk, or future implementers?

Once a decision-making mode hasbeen determined, set a deadline for the

sub-team. This gives everyone fairwarning: If you want your voice to beheard, contact the sub-team before thedeadline. Once the decision is madeand announced to the full team, it isconsidered a fait accompli. The discus-sion should now move to how the decision will be communicated andimplemented. Effective decision-mak-ing teams set a shelf-life for the deci-sion, noting milestone dates wheneach should be revisited.

3. Overcome the challenges. In ourobservations of leaders who have gonethrough the process of delegating deci-sion-making, we have identified fourtraps into which teams typically fall,along with tips to counteract them:• Deferring to the leader. Team mem-

bers tend to defer to you. Refuse toplay along. Unless you are part of asub-team, be judicious about offeringyour opinion to that team. Hold sub-teams accountable for making thedecisions assigned to them.• The more, the merrier. Make sure

that everyone appointed to the sub-team adds value to the decision-mak-ing process. The price of admissionshould be proficiency, not position.• Clueless about closure. Because a

person has technical knowledge oroccupies a certain position on theorganization chart doesn’t mean thathe or she should be the point personfor a decision. Driving a decision toclosure requires influencing others andkeeping them in process—leadership,not technical skills. If a selected pointperson doesn’t have the necessaryskills, arrange for coaching right away.• Forced unanimity. Everyone doesn’t

have to agree with a decision, buteveryone must be able to live with itsoutcome. Don’t permit a sub-team totry to win over everyone; do makesure that everyone on the team makesa public commitment to abide by thedecision once it is made. Don’t permitsecond-guessing the sub-teams.

Today business leaders are bothdecision makers and decision mentorsresponsible for ensuring that the deci-sion-making machine is whirringalong: the right issues are beingaddressed; the right people are beingdeployed; decisions are being made ina timely fashion; and they are seamless-ly communicated and implemented.They must learn to multiply gooddecisions, not just make them. LE

Howard M. Guttman is author of When Goliaths Clash:Managing Executive Conflict. He is principal of GuttmanDevelopment Strategies. Visit www.guttmandev.com or [email protected].

ACTION: Multiply good decisions.

LEADERSHIP DECISIONS

LEADERS MAKE DECI-sions. Good deci-

sions create value anddefine a leader’s effectiveness. Poordecisions cast shadows over organiza-tions and those who lead them.

In every business magazine, you’llfind examples of both flawed deci-sions and shrewd decisions made byleaders. What distinguishes the lead-ers who consistently make wise deci-sions? As a leader, what can you do toimprove your decision track record?Here are three ideas:

1. Go horizontal. The best deci-sion-making leaders have “gone hori-zontal,” meaning they have doneaway with the old hierarchical busi-ness model where decisions are madeat the top and executed below. In hori-zontal organizations, decision-makingresponsibility is decentralized. Time-consuming, back-and-forth posturingand permission-seeking are sweptaway. Decisions are made by thoseclosest to the action, with access to themost comprehensive, accurate infor-mation and responsibility for imple-mentation. This results in faster, betterdecision-making and smoother execu-tion. Leaders—from first-level super-visors to the CEO—need to reframetheir thinking about leadership, viewshared decision-making as a pivotalstrategy for success, and provideteams with the information and skillsneeded to make the tough choices.

2. Use a four-step process. Sure,leaders are paid to make decisions.Some decisions can only be made bythe leader, but many other decisionscan and should be delegated. The hor-izontal leader provides team memberswith a process for identifying andhandling both types of decisions. Beclear on what decisions face a team,who will make them, and how. Followthis four-step process for guiding yourdecision making:• Identify the decisions that need to

be made. Whether intact or time-limit-ed, cross-functional or intra-functional,every team is responsible for an arrayof decisions. Effective leaders firstwork with the full team to develop a

Decision Leadersby Howard M. Guttman

They are both decision makers and mentors.


vidual progress. Specific, measurablebehavioral targets can be set for mostbehaviors of “teamwork.” The mea-sures might not be as “tight,” but it isbetter than leaving important compe-tencies unclear and unmeasured.

Step 3: Analyze the data. The dataproduced by performance measure-ment won’t require the statistics SixSigma does and can be done in brief,informal conversations about wherethe employee is, to date, on perfor-mance objectives (above, on target,below). The manager needs to ask:“How are you doing this week, monthor quarter on your performance goal—what do the measures indicate?”

In areas in which a direct report isbelow an acceptable level of performanceor, if on target, could do even better,specific coaching and developmentalopportunities can be provided to helpthe employee improve. Engaging inimprovement efforts can be added to theoriginal performance objective and theeffects of these efforts assessed to pro-

vide data for the next perfor-mance discussion.

Engage in analysis andimprovement discussionsfrequently. Ongoing feed-back and coaching aboutperformance should occurmonthly, if not weekly, and itcan be brief and informal. Afive-minute “check in” maybe all that is needed. Keep

giving positive feedback and coaching.Step 4: Maintain performance

improvements. Recognizing andrewarding good performance is apowerful way to maintain and rein-force it. Acknowledging gains, verbal-ly or in writing (even in small ways),makes a big difference, since rein-forced behavior is repeated. So, whenyou see your people improve theirperformance, reinforce it.

If you follow the four steps in manag-ing your people’s performance, thenperformance reviews can becomereviews of the progress and develop-ment. Agreement on performance rat-ings for the period is less subjectivebecause it is driven by data collectedagainst each SMART objective. Apply-ing Six Sigma steps to performancemanagement better fulfills its real pur-pose—achieving the strategic goals byensuring that each employee meet his orher goals. Six Sigma for people is theessence of performance management. LE

Michael M. Grant is a principal at Leadership ResourceCenter. Email [email protected].

ACTION: Improve your performance management.

Performance Management

MANY LEADERS FIND THAT AN EFFECTIVEmeans for reducing labor rela-

tions problems before they arise is tohire committed workers with positiveattitudes. By developing a strategicHR plan that fosters a reputation as agreat place to work, you attract pro-ductive workers who take pride intheir work and their company.

In various venues, workers shouldget to express themselves to manage-ment. If you do not listen and respondpositively, problems will fester andlabor relations problems arise. Youmust communicate your interest in thewelfare of employees by creatingworker-friendly conditions that enableworkers to control more of their lives.

Efforts to make the workplace morehealthful and less stressful are appreciatedby workers and result in greater produc-tivity. For example, many companies nowhave on-site fitness programs, subsidizeon-site fitness centers, and provide yogaor aerobic exercise classes. Companiesmay also provide unpaid sabbaticals forthose who have been with the companyfor so many years or have seniority.Menu of Incentives

Here is a menu of programs thatcan be combined and refined to satisfythe needs of workers and create a rep-utation as a great place to work.

1. Recreation programs. Sponsorvideo game tournaments, movienights, trips to the theater, wine tastingtrips, weekend skiing trips, and atten-dance at sporting events.

2. Financial incentives. Put a per-centage of salaries into 401 (k) plans,offer free investment advice from pro-fessionals, and provide interest-freeloans for college.

3. Equitable advancement. In com-panies with a large portion of femaleemployees, more women should bepromoted to managerial positions.

Use Six Sigma principles.

ALTHOUGH MANAGINGthe performance of

people is often morechallenging than ensuring an opera-tions process produces no more than3.4 defects per million (the goal of theSix Sigma), the same principles apply.

I find it odd that leaders who suc-cessfully use Six Sigma to manageproduct and service quality find perfor-mance management such a challengingand painful process. Most managersconceive of performance managementas a once-a-year process, dread it, put itoff, and then rush through itto get it over with quickly—like filing income taxes.

To achieve minimaldefects goals, Six Sigma fol-lows four steps, and the samesteps can be used in manag-ing people performance:

Step 1: Define what will beimproved. As the strategicgoals cascade from leaders ondown, each person is assigned perfor-mance goals for a time. Make sure eachperson understands his or her goals,agrees to them, and sees how these alignwith strategic goals. Set expectations andthen set SMART (Specific, Measurable,Attainable, Relevant, and Time-Bound)objectives. Most leaders and managersdon’t co-create SMART objectives withtheir people. Vague, un-measurablegoals make for ambiguous performance.

Step 2: Decide how to measure theperformance objective. How will peo-ple measure progress and report back?What will they measure? Cost, timeli-ness, quality, customer satisfaction,error reduction, quantity, what?Managers struggle with measurement,when the performance or behaviorseems less quantifiable as in a compe-tency like “teamwork” or “communi-cation.” Break down competencies orbehavioral objectives into their compo-nent parts. “Teamwork”, for example,could be made measurable if SMARTobjectives were related to: 1) on-timeattendance at team meetings; 2) offersideas to solve team problems; 3) com-municates back to the team about indi-

by Michael M. Grant

Make Your Companya Great Place to WorkPromote positive relations.

by Stephen J. Cabot and Julius M. Steiner

PEOPLE PERFORMANCE PEOPLE RELATIONS


4. Recipient gifts. When a mothergives birth, she may be the gratefulrecipients of a cash bonus, a savingsbond in the name of the new bornchild, and free at-home cleaning ser-vices for a time. New employees mayget signing bonuses based upon theircompetence and experience. Theirspouses might receive flowers.

5. Mentor programs. Assign a men-tor to every new employee and plannon-work activities for mentors andmentees, such as baseball games, golfoutings, lunches and dinners. Newemployees who are mentored tend tohave high rates of productivity, quick-ly learn new tasks, and develop anappreciation of corporate goals.

6. Sales goals. If employees reach orexceed sales goals, they might receivea cash bonus, free membership in ahealth club, a night out at a favoriterestaurant, play, or sporting event.

7. Relax and enjoy life. Employeesmay receive monthly massages, regularyoga classes, free manicures andmakeovers; they may also be invited toparticipate in golf outings, companypicnics, and other recreational activities.

8. Training. If companies provideworkers with extra training that permitsthem to undertake increased responsi-bilities, they will feel increased loyalty.As management promotes from within,workers feel they have an incentive toachieve success. If employees takecourses that are related to their jobresponsibilities, management maychoose to pay for those courses.

9. An ongoing strategic HR plan. Thisdevelops your reputation as a greatplace to work. Build your reputation ona foundation of sincerely asking, listen-ing, talking, and acting in response toemployee needs and issues. Try toknow each worker’s name, job descrip-tion, family background, and perfor-mance record. Your genuine concernbuilds trust. You can then open morechannels of communication.

When people leave, conduct exitinterviews to learn where to improveconditions, enhance the culture, andincrease trust, credibility, and productivi-ty. Express commitment to their welfare.

You develop a reputation as greatplace to work by devising and imple-menting a strategic HR plan that includesasking, listening, and conversing withemployees, and by taking actions to meettheir needs and expectations. LE

Stephen J. Cabot is chairman of The Cabot Institute for LaborRelations. Visit www.cabotinstitute.com. Julius M. Steiner ischairman of labor relations at Obermayer Rebmann Maxwell &Hippel, LLP. Visit www.obermayer.com.

ACTION: Create a positive work place.

leader embraces differences, respectsdisagreement, and doesn’t surroundhim or herself with “yes” people.

Once you have your diverse talentand agree on the team mission, definehow your team will work together. Setand use ground rules: What are thedecision-making procedures, roles, andproblem-solving mechanisms? Four-Step Process

This four-step process uses personalvalues as its foundation.

Step 1. Have people submit five val-ues important to them. Examplesmight be honesty, accuracy, teamwork,creativity, and risk-taking.

Step 2. As a group, prioritize the values,and choose values that all can agree to.

Step 3. Define each value and why itis important for your team.

Step 4. Identify what behaviors andactions reinforce this value, and whatbehaviors can undermine it. List howyou can reinforce the value and whatyou should avoid.

For example, you mightidentify the value ofrespect. Respect is neededto build loyalty and mutualtrust. You reinforce respectby seeking others’ inputregarding decisions thatmay affect them. Youundermine respect whenyou change direction with-out giving an explanation.

Take your team throughthis exercise to build teamwork. Whena team participates in defining andenforcing the norms, ownership hap-pens. Set only a few ground rules at atime. Ask your team: “What behaviorsdo we need to focus on next quarter?”

Once I worked with two warringdivisions of a company. There was fin-ger-pointing, blaming, and passing thebuck. After discussing expectations,they agreed on one ground rule: “I willmeet my deadlines. If I must extendthe deadline, I’ll negotiate with allaffected parties to agree on the newdeadline. I will notify all parties of anychange at least 24 hours ahead.”

When everyone followed this prac-tice, it altered the way they workedtogether, changed their culture, andengendered more respect. Ground rulesset improved behaviors as the norm;and when the team levies consequences,it reinforces desired changes. LE

Marilyn Manning is an author, speaker, and consultant in change,teamwork, and leadership. Email [email protected],call 650-965-3663 or visit www.TheConsultingTeam.com.

ACTION: Turn your group into a real team.

HOW CAN YOU TURN Agroup of diverse

individuals into a highlyefficient team to complete complex pro-jects and tasks? As a leader, you don’talways get to hand-pick your team—you often inherit teams and all the bag-gage. You need to define desired out-comes, set measurable goals, designyour game plan, set benchmarks anddeadlines, and keep everyone focusedon high-profile projects.

Real teams hold themselves account-able to apply their complementary skillsto achieve a common pur-pose and meet performancegoals. In forming teams, con-sider: What is our ideal size?What skills do we have—and need to add? How doeseach member contribute toour mission and purpose?Do we set, track, and meetperformance goals? Do weset and live by behavioralground rules and hold our-selves accountable?

I was once asked to facilitate prob-lem-solving sessions with a teamplagued by interpersonal conflicts. Theteam had five high achievers who hadclear goals. One stated: “I don’t see whywe meet as a team when we have noth-ing in common.” I couldn’t find any evi-dence of collective work; however,when they talked about their roles andgoals, they could see potential intercon-nections. Their conflicts were due totheir isolation and lack of teamwork.

Effective teams do not encourageheroes or superstars. They look forways to maximize their resources andbuild on each other’s strengths. It mayseem easier to work with people of sim-ilar styles, thinking and background,but diversity brings richness to a team.Embracing diversity means equal treat-ment and opportunity for people of allbackgrounds, lifestyles, and beliefs.

A diverse team can bring togetherindividuals with different backgrounds,approaches, and ways of thinking. Anoutstanding team has no subgroups, no“we” vs. “they” attitude. An effective

EmbraceDiversity Build more effective teams.

by Marilyn Manning

PERFORMANCE EFFICIENCY


The leader-follower model is a dinosaur. Everyone must contribute as a leader.That’s what makes teams stand apart.GDS helps transform good teams into great ones…with every member a great leader.

Guttman Development Strategies, Inc. (GDS)Strategic Alignment, High-Performance TeamDevelopment, Conflict Management, ExecutiveCoaching, and Management Development

Alongside Every Great Leader…Are Other Great Leaders

Howard M. Guttman, Principal, Guttman Development Strategies, Inc.

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