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Lance SecretanLeadership Coach

ExcellenceL E A D E R S H I P

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

JANUARY 2008

Wise LeadersShow Courageand Character

“Leadership Excellence is an exceptionalway to learn and then apply the best and latest ideas in the field of leadership.”

—WARREN BENNIS, AUTHOR ANDUSC PROFESSOR OF MANAGEMENT

Wise MentorsBe open to influence

Wise MentorsBe open to influence

ActiveLeadership

Stop the Blame Game

Celebrity LeadersThey Don’t Measure Up

Wise LeadersShow Courageand Character

ActiveLeadership

Stop the Blame Game

Celebrity LeadersThey Don’t Measure Up

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

NOEL TICHY ANDWARREN BENNIS

Wise LeadersCultivate character andcourage in judgment . . . . 3

BRIAN TRACY

Value of MentorsLook for character andcompetence in mentors. . .4

MARSHALL GOLDSMITH

Influencing UpConvert good ideas intomeaningful action. . . . . . .5

PETER BLOCK

Active LeadershipWhat gift do you bring? . .6

MITCH DITKOFF

Culture of InnovationTake eight steps to startand sustain growth. . . . . .7

TIMOTHY R. CLARK

Performance PyramidSuccessful change has three key elements. . . . . . 8

RAM CHARAN

Leadership EssentialsIdentify the potential leaders on your team. . . . 9

TOM PETERS

Leaders of PerformanceThe best leaders are performance-minded. . . 10

KAREN ELMHIRST

Executive CoachingAchieve a breakthrough in

thinking and results. . . . .11

PAUL WALSH

Follow the LeaderYou can become moreauthentic as a leader . . . .12

JANET BOULTER

Built to ProsperYou need to commit to profitability. . . . . . . . . 13

DIANNA BOOHER

Tough QuestionsPrepare well to address them in presentations. . . 13

DAVID BENZEL

Build CredibilityShed the Superman capeand get real. . . . . . . . . . . 14

GARY BRADT

Leading ChangeUse five keys in handlingany reorganization. . . . . .15

LEANN THIEMAN

Increase RetentionNurse your people usingtender loving care. . . . . . 15

LANCE SECRETAN

Building TrustMake breakthroughs inyour leadership. . . . . . . . 16

MEL VAN DYKE ANDRICK GARLICK

Recognition and RewardStudy the reward profilesof your people. . . . . . . . . 17

B. LYNN WARE

Retaining Top TalentMeet the attrition challengeto keep the best people. . .18

SUSAN REECE

Strategic ThinkingLeaders vary in theirapproach to strategy. . . . 19

JIM COLLINS

Celebrity LeadershipPromote Level 5 leaders. . 20

VOL. 25 NO. 1 JANUARY 2008

™

Wisdom in the Wind

Soaring at speeds up to 200 miles-per-hour, a golden eagle plies the wind on a roller-coaster flight, spreading its eight-foot wingspan to ride the thermals for hours on end. Wise leaders, too, exercise courage and competence in judgment.

AS WE ENTER OUR 25TH year,we pledge to continue

our transformation from a“good read” magazine to a “must have”personal improvement and leadershipdevelopment system, complete with back-up capability to support application andsupply additional resources.

FFoouurr NNeeww AAlllliiaanncceessThis month, we announce four giant

steps forward:1. An alliance with Big Speak and the

Leadership Excellence University. For thepast 15 years, Jonathan Wygant, president ofBigSpeak and Leadership Excellence University,has represented the top corporate speakers,consultants, and trainers. So, we have decid-ed to team up to deliver a more completeservice to our clients. All 250,000 people whoreceive Leadership Excellence magazine eachmonth will have access to his speakers, andhis network will have access to our publica-tions. We are both committed to the missionof “inspiring greatness (excellence), oneaudience at a time.” I invite you to visitwww.BigSpeak.com and www.LEUniversity.com,along with our site www.LeaderExcel.com.

2. A Thought Leader alliance with AlliantInternational University and the MarshallGoldsmith School of Management. We arepartnering with Marshall Goldsmith, co-founder of Marshall Goldsmith Partners andauthor of What Got You Here Won’t Get YouThere, and Jim Goodrich, dean, and KopitzeeParra-Thornton, Director of the ThoughtLeader Partnership at the Marshall GoldsmithSchool of Management, to create a more com-prehensive listing and ranking of exceptionalcoaches and thought leaders. If you’recharged with leadership development, saysMarilyn Mcleod, founding Director of theThought Leadership Partnership, you’re

involved in identifying both external andinternal thought leaders and their areas ofexpertise. Drawing up a list of potentialthought leaders—including their area ofexpertise, current position, achievements,publications, media coverage and availabili-ty—is a start. You can begin to paint a pictureof the value of a thought leader initiative.

3. An alliance with Success Media andSuccess Magazine. This past month, I’veenjoyed become acquainted with StuartJohnson and Darren Hardy who plan torelaunch the original Success Magazine withthe intent of staying true to the mission ofthe founders to promote success along fivedimensions of life. Our editorial alliancewill benefit both of as we seek to furtherfacilitate the application of powerful ideas.

4. An alliance with the 2008 LeadershipBest Practices conference. We have formedanother alliance with Dr. Johnson A.Edosomwan of JJA Consultants for the 2008Leadership Best Practices Conference. Irecently attended the 2007 conference andwas impressed by the quality of the presen-tations. I invite you to plan to attend nextyear’s LBP conference, to be held onNovember 18 in Arlington, Virginia.

Other exciting alliances are in the worksto make Leadership Excellence an even bettermedium for developing those who aspire tosomething higher and better. LE

T h i s y e a r w e t r a n s c e n d t h e m e d i u m o f t h e m a g a z i n e .

by Ken Shelton

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Leadership Excellence UniversityE . 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

Jim GoodrichJonathan Wygant

Marilyn McLeodKopitzee Parra-Thornton

Johnson Edosomwan Success Magazine

new is the difference between golf andsurfing. You need to ride the breakingwave of constant change. There is nostopping to change your equipment.Even when they have time to wallowin making a judgment, leaders neverhave all the facts, and the situation isconstantly evolving. You are alwaysmaking judgments on the fly.

People with character are more con-cerned with self-respect than publicesteem. They have clear standards,take responsibility, and hold them-selves accountable, knowing that judg-ments have consequences.Having character as a lead-er is the acceptance of con-sequence and responsibility.

Courage. Character andinternal standards to cali-brate your decisions andkeep them on “the rightplane,” is a requirement forbuilding a track record ofgood judgment. Withoutgood character, withoutstrong moral fiber and a sincere desireto put the greater good above personalgain, your judgment will stray toooften to the pragmatic and expedient.The hard choices that good judgmentoften requires will not get made.

But judgment is about more thandecision making. It is not only aboutcoming up with the right solution tothe right problem, it is also about pro-ducing results, delivering the goods.And this is where courage comes in.Bad judgment stories often include astatement to the effect: “I really knewwhat I should do, but I didn’t do it.”

Having the courage to act on yourstandards is an integral part of what ittakes to exercise good judgment. Stan-dards by themselves aren’t enough. Infact, if you don’t act on your standards,there is some question as to whetherthey really are your standards.

Tom Peters and Robert Watermancontrast two types of stupid action (orinaction): Ready . . . fire . . . aim. Ready. .. aim . . . aim . . . aim . . . aim . . . aim.”

Shakespeare’s Hamlet was always“aiming,” never firing, except at thewrong time and at the wrong victim.Every thoughtful leader has experi-enced that excruciating state. DespiteHamlet’s knowing everything he hadto know, despite his awareness that

Wise Leaderskilling Claudius was the only honor-able thing to do, his fits and starts mes-merize us through five acts. This“uncoupling” reinforces the imperativeof action. Character, without courage,is meaningless, except in tragedy.

The courage required to exercisegood judgment comes in many forms.Sometimes it is standing up to opendirect threats. But, you are rarely calledon to exhibit physical courage anddefiant courage in the face of open hos-tility. Usually, quiet courage is requiredof you—the courage to make the innerjourney, recognize and embrace what isright, and take the hard road, despiteall the obstacles, because you should.

And, obstacles there are. Resourcesare always limited, so you need thecourage to make the hard budgetingdecisions. Then you need the courage

to do whatever else ittakes to carry out thejudgment successfully,perhaps by laying off peo-ple whose talent or tem-perament don’t fit withthe new plan, or by hiringnew people, or by gettingold antagonists to worktogether. With any diffi-cult judgment, some peo-ple will always disagree.

A wise leader is exquisitely aware ofwhere all the interested parties sit, andworks to keep them on the team. Buteven when most dissenters fall inbehind the decision once it is made, afew people will fight it. The leaderthen must have the courage to throwthem out if they get in the way.

Some obstacles or challenges arebeyond your control. These are theexternal forces, often with gale-forcewinds. Sometimes the important cli-mate is political. Often it’s competitiveand social as well. These are forcesyou can’t control, but you must havethe courage to persevere, despiteuncertainty and lack of control.

In important judgment calls, thereare always stakes, always somethingbig at risk. Otherwise, the judgmentwouldn’t be an important one. This iswhere many leaders fall down. Theyavoid making calls because they don’thave the courage to take the risks.Even though the failure to make acourageous judgment and take a standis ultimately what kills them, they can’tbring themselves to act. Courageousleaders often get their courage fromtheir fear about what will happen ifthey don’t step up and boldly step out.

Some of the biggest obstacles leadersface are ones they set for themselves.

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

LEADERSHIP WISDOM

by Noel Tichy and Warren Bennis

TWO QUALITIES ARE ESSENTIAL TO EXER-cising good judgment: character

and courage. Without character andcourage you can’t clear the high baron judgment. You may luck into mak-ing some good decisions and some-times obtain good results, but withoutcharacter and courage you cannot sus-tain it. You will falter on the most dif-ficult, and most important, judgments.

Character. Having character meanshaving values, having a moral compassthat sets clear parameters for what youwill and will not do. Character is allabout knowing right from wrong andhaving worked these issues out longbefore facing tough judgment calls. It isabout knowing what your goals andstandards are and sticking with them.We often use the word integrity todescribe a person of character, an inte-grated person whose values and princi-ples are above reproach. Characterplays the guiding role in how honestpersonal feedback and coaching are inthe organization, how internal competi-tion and politics are handled, and howsuppliers and customers are treated.The CEO’s character sets the stage forall important judgment calls.

Character also means putting thegreater good of the organization andsociety ahead of self-interest. It’s aboutworrying about “what is right” ratherthan “who is right.” Good judgmentrequires good values. Evil outcomes cannever be considered successes, and im-moral judgments are never good ones.

Character is that distinctive, unfil-tered personal voice that can’t befaked or imitated. It is the core essenceof who we are. In today’s world, it ismore powerful than ever in shapingour actions. The pace of everything isaccelerated. There is less time forthinking, less time for our intellectualbrains to override our baser instincts.In a way, the difference between life inthe old-style organization and in the

C u l t i v a t e t w o t r a i t s .

They shy away because of self-doubts.Or, doing the right thing means hardwork, and they are afraid that theycan’t do it. So they make compromises.

Another self-imposed obstaclecomes from the pressure to succeed.This pressure can pull us away fromour core values, just as we are rein-forced by our “success” in the market.Some people refer to this as “CEO-itis.” Ironically the more successful weare, the more tempted we are to takeshortcuts. And the rewards–compensa-tion increases, stock option gains, themyriads of executive perks, positivestories in the media, admiring com-ments from our peers–all reinforce ouractions and drive us to keep it going.

Great leaders dissolve many of theimpediments that stand in their waythrough regular, ruthless self-scrutiny.Their built-in moral compass vigilantlyand constantly evaluates their motivesand monitors for right and wrong.

Novartis CEO Daniel Vasella, aleader with character, said: “When youachieve good results, you are typicallycelebrated. You are idealized by theoutside world, and you tend to believethat what is written is true.”

One common impediment to mak-ing wise judgments is isolation, andone pernicious form of isolation resultsfrom the almost palpable intoxicationof success. Many celebrated and giftedleaders constantly struggle to find abalance between their constant hungerfor success and the other attributes of ameaningful life. The courage of wiseleaders is close-knit with their charac-ter. While good character withoutcourage can be worthless, couragewithout good character can be, andoften is, dangerous. Hence, we are notinterested in leaders who cross the lineby compromising on values of integrityand decency. We are only interested inleaders whose character and courageare exhibited when no one is looking.

You can’t lead if you don’t have trust,and you can’t have trust if you don’thave integrity. Leaders with characterare easier to trust and follow; theyhonor commitments and promises; theirwords and behavior match; they areopen to reflective backtalk; they admiterrors and learn from their mistakes;they speak with conviction because theybelieve in what they’re saying; and theyare open to opportunity and risk. LE

Noel M.Tichy (tichy@bus.umich.edu) is professor of managementand director of Global Business Partnership, Univ. of Michigan’sRoss School of Business. Warren G. Bennis (w.g.bennis@gmail.com)is a distinguished professor at the USC’s Marshall School ofBusiness. They are coauthors of Judgment (Portfolio).

ACTION: Cultivate your wisdom and judgment.

by Brian Tracy

The second factor that determinesthe influence of a mentor is the will-ingness of the mentor to help you toachieve your goals. The more emotion-ally involved someone is in your life,the more susceptible you are to beinginfluenced by that person. When youseek out a mentor, you must look forsomeone who genuinely cares aboutyou as a person and who really wantsyou to be successful in your endeavors.

So, you must be wide open to theinfluence and instruction, and thementor must be genuinely concernedabout your well-being and success.

Here are 10 steps for building suc-cessful mentor-protégé relationships:

1. Set clear goals for yourself. Knowwhat you want to accomplish beforethinking of who can help you.

2. Determine what you need to doto overcome the obstacles you face andachieve your goals.

3. Identify the knowledge, skill, andexpertise you need to overcome theobstacles between you and your goals.

4. Seek the most successful people inareas where you need the most help.

5. Join the clubs, organizations, andassociations these people belong to,

become involved, and vol-unteer for responsibilitiesto get their attention.

6. Work, study, andpractice to get better atwhat you do. The bestmentors are interested inhelping you only if theyfeel it is worth their time.

7. When you find a men-tor, don’t make a nuisanceof yourself or waste their

time. Ask for 10 minutes of their time.8. When you meet with a mentor,

express your eagerness to succeed inyour field and seek specific guidanceto help you move ahead.

9. After the initial meeting, send athank-you note expressing your grati-tude for his or her time and guidance.Mention that you hope to meet again.

10. Each month, drop your mentor ashort note, telling him or her aboutwhat you are doing and how you areprogressing. State what their help hasdone for you. Arrange to meet withyour mentor again, perhaps monthly.

As you develop, seek different men-tors who can give you the help most rele-vant to your situation. The more you helpothers, the more others will help you. LE

Brian Tracy is a leadership and sales consultant and the authorof 42 books, including The Way To Wealth. Visit www.bri-antracy.com or call 858-481-2977.

ACTION: Start a new mentoring relationship.

WHEN YOU BUY WIS-dom, you pay full

price in time andmoney to learn the lessons. When bor-rowing wisdom, you go to those menand women who have already paidthe price to learn the lessons. By goingto people who are ahead of you andopening yourself to their input andguidance, you save yourself the yearsit would take and the thousands ofdollars it would cost you to learn whatyou need to learn by yourself. This isthe essence of mentoring relationships.

The fastest way to get ahead is tostudy the experts and to do what theydo. You won’t live long enough tolearn all you need to learn startingfrom scratch. To succeed, you need tofind people who have already paid theprice to help you learn thethings that you need tolearn to achieve your goals.

The mentors you chooseshould be people yourespect, admire, and wantto be like. The advice youseek should be guidanceregarding your characterand personality and specif-ic ideas on how you can doyour job better and faster.

In a mentor, look for two vital quali-ties: character and competence.

Character is by far the most impor-tant. Look for a mentor who has thekind of character you admire andrespect—a person who has highdegrees of intelligence, integrity, judg-ment and wisdom. The more you asso-ciate with men and women who areadvanced in the development of theircharacter, the more you will tend topattern them and to become like them.

Competence means the person is verygood at what he or she does—they havethe knowledge, skills, and abilities tohelp you move ahead more rapidly.The impact of a mentor on your lifedepends on two additional factors.

The first is your degree of opennessto being influenced. When you openyourself up to guidance, concentratefirst on learning what the person hasto teach you and then modify that les-son to suit your circumstances.

Value of MentorsBe open to their influence.

LEADERSHIP MENTORS

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

because if you don’t, I won’t achievemy objectives!” They relate to theneeds of the buyers, not to their ownneeds. Similarly, effective upwardinfluencers relate to the larger needs ofthe organization, not just to the needsof their unit or team. When influenc-ing up, focus on the impact of the deci-sion on the organization. In mostcases, the needs of the unit and theneeds of the corporation are directlyconnected. In some cases they are not.Don’t assume that executives can auto-matically “make the connection”between the benefit to your unit andthe benefit to the larger corporation.

3. Strive to win the big battles anddon’t waste your energy and “psycho-logical capital” on trivial points.Leader’s time is limited. Don’t wastetime on issues that will only have anegligible impact on results—focus on issues that willmake a real difference. Bewilling to “lose” on smallpoints. Be sensitive to theneed to win trivial non-business arguments onthings like restaurants,sports teams or cars. Peoplebecome more annoyed withyou for having to be “right”on trivia than your need tobe right on important business points.You are paid to do what makes a dif-ference and to win on important issues.

4. Present a realistic cost-benefitanalysis of your ideas—don’t just sellbenefits. Every organization has limitedresources, time, and energy. The accep-tance of your idea may well mean therejection of another idea that someoneelse believes is wonderful. Be preparedto have a realistic discussion of thecosts of your idea. Acknowledge thatsomething else may have to be sacri-ficed to implement your idea. Whenyou prepare for a realistic discussion ofcosts, you can “prepare for objections”to your idea, acknowledge the sacrificethat someone else may have to make,and point out how the benefits of yourplan outweigh the costs.

5. Challenge up on issues involvingethics or integrity—never remain silenton ethics violations. Enron, WorldCom,and other organizations show howethics violations—only one violation ofcorporate integrity—can damage ordestroy even the most valuable compa-nies. If your management ever asks youto do anything that violates corporateethics, refuse to do it and immediatelylet upper management know of yourconcerns. Such action ultimately bene-fits your company, your customers,

Influencing Up

ORGANIZATIONS SUFFERwhen key people

can’t effectively influ-ence up. Most people are occupiedwith efforts rather than results. Theyworry over what the organization ortheir boss owes them and should dofor them and obsess over the authori-ty they “should have,” thus renderingthemselves ineffectual.

Although knowledge workers mayknow more about what they are doingthan their managers do and haveyears of education and experience,they rarely know how to effectivelyinfluence up. Even the greatest wis-dom and knowledge not applied toaction and behavior is meaningless.

To influence upper managementand convert good ideas into meaning-ful action, follow these 10 guidelines:

1. When presenting ideas, realizethat it is your responsibility to sell—not their responsibility to buy.Influencing up is similar to sellingproducts or services to customers.They don’t have to buy—you have tosell! Great salespeople take responsi-bility for achieving results, refusing toblame their customers for not buyingtheir products. Most professionalsblame management for not buyingtheir ideas; hence, upward feedbackoften turns into “upward buck-pass-ing.” You become disempoweredwhen you focus on what others havedone to make things wrong—notwhat you can do to make things right.By developing your ability to presentideas, and not blaming managementfor not buying your ideas, you accom-plish much more. The knowledgeworker is expected to take responsibil-ity for being understood. It is arro-gance to assume that laymen can orshould make the effort to understandthe specialist. The effective upwardinfluencer needs to be a good teacher.Good teachers realize the communicat-ing knowledge is often a greater chal-lenge than possessing knowledge.

2. Focus on contribution to the larg-er good—not just the achievement ofyour objectives. An effective salesper-son would never say to a customer,“You need to buy this product,

your co-worker and yourself. Whenchallenging up, try not to assume thatmanagement has intentionally request-ed you to do something wrong. Insome cases, inappropriate requestsmay be made because of misunder-standings or poor communication. Tryto present your case in a manner that isintended to be helpful, not judgmental.

6. Realize that your managers are justas human as you are—don’t say, “I amamazed that someone at this level…” Itis realistic to expect upper managers tobe competent; it is unrealistic to expectthem to be superhuman. Is there any-thing in human history that indicateswhen people achieve high levels of sta-tus, power and money, they becomecompletely wise and logical? How oftendo you think, “I would assume some-one at this level…” followed by “should

know what is happening”,“should be more logical”,“wouldn’t make that mis-take”, or “would neverengage in such inappropri-ate behavior.” Even the bestof leaders are human. Weall make mistakes. Whenyour managers make mis-takes, focus more on helpingthem than judging them.

7. Treat managers withthe same courtesy that you would treatpartners or customers. While you mustavoid “kissing up” to upper manage-ment, you also must avoid the oppositereaction. Many managers spend hours“trashing” the company and its execu-tives or making destructive commentsabout other co-workers. Before speak-ing, ask four questions: Will this com-ment help our company? Will thiscomment help our customers? Will thiscomment help the person that I amtalking to? Will this comment help theperson that I am talking about? If theanswers are no, don’t say it! There is abig difference between total honestyand dysfunctional disclosure. It’s vitalto “challenge up” on integrity issues. Itis often inappropriate to “trash down”when making personal attacks.

8. Support the final decision of theteam—don’t say, “They made me tellyou” to direct reports. Assuming thatthe final decision of the team is notimmoral, illegal, or unethical—go outand try to make it work! Managerswho consistently say, “they told me totell you” to co-workers are seen as“messengers” not leaders. Even worse,don’t say, “those fools told me to tellyou”. By revealing your lack of com-mitment to the final decision, you maysabotage the chances for effective exe-

by Marshall Goldsmith

L e a d e r s h i p E x c e l l e n c e 5

COMPETENCY INFLUENCE

Y o u m a k e a d i f f e r e n c e .

cution. When communicating difficultdecisions, ask, “How would I wantsomeone to communicate to their peo-ple if they were passing down my finaldecision and they disagreed with me?”Treat your manager in the same waythat you would want to be treated ifthe roles were reversed.

9. Make a positive difference—don’tjust try to “win” or “be right”. You caneasily become more focused on whatothers are doing wrong, than how youcan make things better. An importantguideline in influencing up is to alwaysremember your goal to make a positivedifference for your organization. Cor-porations are different than academicinstitutions. In an academic institutionthe goal may be sharing ideas, notimpacting the world. Hours of acrimo-nious debate can be perfectly accept-able. In a corporation, sharing ideaswithout having an impact is worse thanuseless. It is a waste of the stockholdersmoney and a distraction from servingcustomers. The most common area forimprovement for most executives is thecompulsion of “winning too much”.Focus on making a difference. Themore other people can “be right” or“win” with your idea, the more likelyyour idea is to be successfully executed.

10. Focus on the future—let go of thepast. Avoid whining about the past.Have you ever managed someone whoincessantly whined about how badthings are? When people consistentlywhine, they inhibit any chance theyhave for impacting the future. Theirmanagers view them as annoying, andtheir direct reports view them as inept.Nobody wins. Successful people lovegetting ideas aimed at helping themachieve their goals for the future. Theydislike being “proven wrong” becauseof mistakes in the past. By focusing onthe future, you can concentrate onwhat can be achieved tomorrow, asopposed to what was not achievedyesterday. This future orientation willdramatically increase your odds ofeffectively influencing up and buildbetter long-term relationships.

How much energy have you invest-ed in acquiring your knowledge? Howmuch energy have you invested inlearning to present this knowledge sothat you can make a real difference?By learning to influence up, you canmake a large, positive difference forthe future of your organization! LE

Marshall Goldsmith helps successful leaders achieve positive,measurable change, and author of What Got You Here Won’tGet You There. Visit www.MarshallGoldsmithLibrary.com.

ACTION: Focus more on the future.

by Peter Block

have to decide whether to occupy thespace and be present in the moment.Being somewhere doesn’t mean you’represent. What must happen is to makethe participant active—responsible forthe outcomes of training and learning.

Being a citizen is different than justbeing a resident. It’s about deciding tocare about the city, not just your neigh-borhood or backyard.

The key to transformation is to start adifferent conversation. My question is,“What’s the gift that I bring to theworld?” Don’t worry about the answer—it’s the question that matters. Ofcourse, the world doesn’t value question-ing; the world values doing. It wants toknow, how do we do this? We worshipthe god of efficiency, of productivity. Weask, “How do you make this work?How long does it take? How much doesit cost?” We have lost our sense of com-munity and connectedness. We’redeeply isolated and lonely. We need toimagine a better life. The act of imagi-nation, of possibility, creates the future,but it must be rooted in community.

Maybe listeners create speakers; citi-zens create leaders; employees createbosses; students create teachers; and

children create parents. Thepurpose of problem-solv-ing is to build relation-ships. Yet, we think thepurpose of relationships isto solve problems.

You hear people say,“We don’t have to like eachother to work together.”This means, “Screw therelationship, as long as weget the work done.”

Thinking that “only the leader mat-ters” or that “the person on top is thecause”is the problem. We need toinvert the location of cause. If youtreated the employee as the cause,where does that take you as a leader?

To me the qualifying question oftransformation is, “Do you want thefuture to be distinct from the past?”

The idea of invitation is powerful. Apowerful invitation says, “Please come;and if you choose to come, here’swhat’s required or expected of you:You’ll have to show up on time, engagewith your peers in powerful conversa-tions, leave your personal interests atthe door, and help us create a betterfuture through imagination, from adream or a possibility.” That invitationgives you traction with people. LE

Peter Block is a celebrated consultant and author. Visitwww.peterblock.com.

ACTION: Be active in your learning and leadership.

MOST LEADERS AREvictims of our

inflated expectations.When people say there’s a lack of lead-ership, they’re never talking aboutthemselves. So, I see the whole discus-sion of leadership as an avoidance ofpersonal responsibility.

My interest now is the individual—the millions of people who are passive,isolated, and entitled—passive becauseour structures encourage it, isolated bytechnology that gets rich off our isola-tion, and entitled to be taken care of.

We need to confront corporate care-taking and build citizen capacity. Beinga social architect gets you out of helpfulinterventions. Architects don’t build,they design; they create spaces whereother people build. You don’t need tobe the center of the system.You can do so many usefulthings without being thestar. You can get people totalk together by designinglearning events or usefulexperiences that enablethem to explore issues andmake decisions. The goal isto build self-sufficiency—tohelp people to get connect-ed, define purpose, organizethemselves, reclaim the power that isrightfully theirs. Now that’s a leader-ship purpose worth pursuing.

The questions authentic leaders raiseare ones of purpose, destiny, and vision.Stewardship is about acting on pur-pose, worrying about the next genera-tion, and stopping the abuse of power.

Leadership (and life) is about theconversation you have with yourselfand the people around you. Where youare and how you show up to the worldcreates a future different from the past.Indeed, this is Active Leadership. All learn-ing is the willingness to enter into a newconversation about fresh possibilities.

Today there is greater need forengagement; engagement is the way toprogress. And progress means a deepersense of caring for the earth, belonging,finding a way to offer gifts. Speed, easeand comfort are not progress. Justshowing up and doing somethingfaster doesn’t mean you add value. You

Active LeadershipIt creates a better future for all.

LEADERSHIP PROACTIVITY

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

unsure what’s needed to prepare theground, unable to resist the impulse fora quick yield, they rush in and wasteeffort. The same holds true for man-agers who want a culture of innova-tion. The antidote is first to get clearabout the scope of the effort by “stakingyour territory” or defining the fields inwhich you want to innovate. If you tryto innovate everywhere all the time,you’ll deplete your resources andexhaust your people. Second, you needto prepare the ground for planting byremoving obstacles to growth and byenriching the fertility of the soil.Preparatory efforts don’t feel like funand there’s no immediate reward, butwithout this effort you won’t have theground for future success. To preparethe ground, you might: 1) ask yourleaders to prioritize the top five inno-

vation needs; 2) quantify the cost/ben-efits of innovating in these fields; 3) askmanagers what they can do to establisha culture of innovation; and 4) researchidea management software options.What will you do this month to prepare theground for innovation?

3. Find the seeds: Locate powerful,new ideas. You can have ample spaceand fertile soil, but unless you havehealthy seeds to plant, you won’t reapa harvest. If you want a garden ofinnovation, you need many kinds ofseed. The more varied the seeds, thegreater your chances for an interestingyield. Ideas are the seeds. All innovationbegins with ideas. Where will your com-pany get its new ideas? Is there a process?Is it working? Can you count on yourpeople to deliver quality, game-chang-ing ideas? Or is there something elseyou need to do to tap their brilliance?To find the seeds, you might: 1) askyour people for three well-developedideas per week; 2) re-state your biggest

Culture of Innovation

SUSTAINABLE INNOVAT-ion, the endless

effort to find a betterway, can’t be achieved by mechanical-ly imitating best practices. The catalyz-ing agent for renewable innovation isthe cultivated ground from which bestpractices spring—the confluence ofpurpose, people, and processes (culture).

No aspect of innovation can take rootwithout creating a culture of innovation.Such a culture is simple to create, but it isnot easy because the ground of mostorganizations is hard. The metaphorthat conveys the effort required is creat-ing a garden. When your company isclear about the effort required, creatinga culture (garden) of innovation is sim-ply a matter of taking the time to exe-cute each step in the time-honored way.

To create a sustainable culture ofinnovation, take these eight steps:

1. Whet the appetite: Stimulate yourpeople’s innate hunger to innovate. If youare serious about being a gardener ofinnovation, you will need hunger—areal appetite for results. Without acommitment to the harvest, gardeningremains only a hobby and does notyield desired results. If your peoplehave little appetite for innovation, youneed to whet it; otherwise, they sit idlyby, waiting for R&D or senior leadersto lead the charge. And while theymay talk about growth, talk won’t putfood on the table. Fortunately, insideeveryone is the impulse to create. Yourtask is to awaken this impulse andhelp people own the effort to innovate.To whet the appetite, you might: 1)invite people already inspired to inno-vate to join your core team; 2) commu-nicate and celebrate all innovationsuccesses; 3) lead senior team innova-tion strategy and alignment sessions;or 4) create a business case for whyinnovation is so crucial and present it.What will you do this month to whet yourpeople’s appetite to innovate?

2. Stake and prepare the ground:Clarify the scope of the effort and increasereadiness. Amateur gardeners, fueledby visions of the harvest, tend to plantbefore they are ready. Unclear abouthow large a garden they can sustain,

challenges in the form of questionsthat begin, “How can we?” 3) identify10 scheduled meetings and dedicate atleast 25 percent of these meetings toidea generation; or 4) invite selectedcustomers to a brainstorming session.Where is the biggest untapped sourceof new ideas? What can you do thismonth to tap this fountain of brilliance?

4. Fence the garden: Protect aspiringinnovators from naysayers and idea killers.Uninvited predators and other varmintswill show up at all hours to devouryour tender, young seedlings or down-size your dreams—unless you fence yourgarden. Promising new growth ideas—the tasty indicators of breakthroughinnovation—will be devoured by raven-ous naysayers, unless you find a way toprotect the in-house innovators whooriginate and develop these promisingnew ideas. Your role is to fence yourgarden and protect your people fromthe acidic scrutiny, doubt, and prema-ture evaluation of left-brained, metric-driven, inhibitors of innovation. Tofence your garden, you might: 1) elimi-nate unnecessary metrics and bureau-cratic protocols; 2) serve your biggestnaysayers with an aspiring innovator’srestraining order; 3) request naysayersto seek you out with their concernsabout projects and pilot programs; or 4)provide safe havens for aspiring inno-vators to collaborate on new projectsaway from the scrutiny and micro-management of in-house skeptics. Inwhat ways can you protect your directreports from the chronic naysaying behav-ior of the senior team or Board?

5. Plant the seeds: Improve the processfor new ideas being pitched and taking root.While some seeds carried by the windmay land on fertile soil, most gardensrequire that seeds be planted systemat-ically. If you are sincerely trying to cre-ate a culture of innovation, you needto refine you seed-planting process,establishing a more effective way forthe carriers of seeds to increase the oddsof those seeds taking root. Yes, aspiringinnovators need to become more adeptat pitching (planting) their ideas. Butalso managers need to become morereceptive to the possibility that some-thing new is worthy of taking root.Having healthy seeds is a good start,but those seeds need to be planted in away that dramatically increases theodds of them growing into seedlings.To better plant seeds, you might: 1)identify best “idea pitching” practices;2) identify skillful communicators andask them to mentor others; 3) ask peoplewhat they need to make the idea-pitch-ing process more inviting, humane, and

by Mitch Ditkoff

L e a d e r s h i p E x c e l l e n c e 7

CHANGE Innovation

T a k e e i g h t s t e p s t o s u s t a i n g r o w t h .

effective; or 4) train your people in theart and science of making skillful pre-sentations. What will you do this month toimprove your idea-pitching process?

6. Tend new growth: Find healthy waysto nurture new possibilities. Conceivingideas is easy; bringing them to fruition ishard. Along the way, they get neglected,mishandled, and trampled. What startsas a brilliant possibility often shrivels onthe vine. With the right sustained effort,gardeners of innovation dramaticallyincrease the odds of exciting new ideasmaking it to market. To tend new growth,you might: 1) create “virtual garages”where people work on promising ven-tures; 2) give feedback to aspiring innova-tors; 3) make “innovation slush funds”available to project champions; or 4)establish “innovation spaces” to encour-age creative thinking, collaboration, andcross-functional brainstorming. What willyou do to foster the growth of a new project?

7. Thin and transplant: Evaluate, sim-plify, and decide what to focus on andwhat to defer. Savvy gardeners thin outnew growth to make room for thehealthiest plants and even transplantthe healthiest of the thinned-out plantsto roomier locations. You need a clearstrategy for how you will evaluate,select, and fund new initiatives—andidentify promising new growth to betransplanted for future development.You might: 1) communicate the criteriafor evaluating new ideas; 2) identifythe resources available to support newgrowth; or 3) establish “greenhouseenvironments” that will enable you tonurture the growth of new ideas andpilot programs. What promising ideas orinitiatives killed last year should have beentransplanted into an “idea greenhouse?”

8. Celebrate the harvest: Acknowledgethe bounty and express appreciation for thegardeners. Have a holiday, ritual, or cer-emony to express gratitude for theharvest. The harvest feeds the body, butthe acknowledgment of the harvest feedsthe soul, strengthening everyone’sresolve to begin the growth process againnext season. To sustain a culture of inno-vation, you need to celebrate the harvestand acknowledge people for their effortsto innovate. You might form a team ofpeople to schedule, plan, and facilitatean event to celebrate your innovationharvest. How will you organize a “cele-brate-the-innovation-harvest” event?

Follow these eight steps for creatinga sustainable culture of innovation. LE

Mitch Ditkoff is president of Idea Champions and author ofBanking on Innovation, Free the Genie and Awake at theWheel. Visit www.ideachampions.com.

ACTION: Create a culture of innovation.

by Timothy R. Clark

port functions and processes are essen-tial—and each represents a potentialpoint of operational failure. If youplace a strategy bet to shift your focus,the burden of change now shifts tooperational and human dependencies.If you can’t price, market, and distrib-ute your products effectively, you willexperience operational setbacks.However, operational failures are sel-dom fatal to a change effort. Unlessyou’re out of time and money, you canfix your mistakes and try again.

Consider your quality expectationsin view of your cost and time limits.Further, ask yourself if you have anytechnical gaps that lack a solution.Identify places where you might out-run your resources.

3. People. An inability to engagepeople and their commitment duringchange accounts for most change fail-ures. People rely on leadership andHRM systems to harness and directtheir efforts. People are free-willedassets who decide to grant or withholdtheir efforts during change. Leaderstend to forget, ignore, or simply under-estimate the importance of people.When you launch change, you ask peo-

ple to take a risk. Peopledetermine the risk profile oftheir leaders based on char-acter, competence, commit-ment, and personal concernfor them. Unless you have acritical mass of peoplepushing change forward,you won’t succeed. Youhave little chance of mobi-lizing effort and institution-al will if only 20 percent of

your people are engaged.People failures are traceable to

either a gap or breakdown in HRMsystems or in the leadership capacityof individuals. For example, yourfinancial incentives might workagainst change, or you may have lead-ers who are incompetent, possess char-acter flaws, or show selfish ambition.

Boost engagement before launchinga change effort. Analyze your HRMsystems. Are some missing, conflicting,or ineffective? Also, assess your leader-ship capacity. Will the change rely onleaders who are known as competent,credible, and of high character?

When these issues block the freeflow of discretionary effort to supportchange, the effort is likely to fail. LE

Timothy R. Clark is chairman of TR Clark Associates, focusing onleadership, strategy, and change, and the author of Epic Change(Wiley/Jossey-Bass). Email trclark@trclarkassociates.com.

ACTION: Attend to these three areas of change.

THREE OUT OF FOURchange initiatives

fail to meet their objec-tives. Why? Where do leaders fail themost? What can you do about it?

To learn what creates success andwhat accounts for failure, I analyzed 53cases of large-scale change, studied thepatterns of success and causes of fail-ure, and discovered that change suc-ceeds or fails based on what happensat three levels—strategy, operations, andpeople. Usually, one dominant factorbrings an initiative down. I find thatlarge-scale changes fail only 10 percentof the time on strategy, 20 percent onoperations, and 70 percent on people.Your change efforts can fail on any oneof the three—strategy, operations, orpeople—but you can’t succeed on anyone alone. Successfulchange requires all three.

1. Strategy. Only 10 per-cent of change failures aredue to strategy (the directionand rationale for action). Toform strategy, assess inter-nal capability and externalenvironment and decidewhere and how to compete.For example, you might seean underserved segment ofthe market and believe that your prod-uct can steal market share. If you’re cor-rect, strategy ceases to be a potentialcause of failure—it becomes of matter ofgetting operations and people right. Ifyou bet wrong on strategy, you willstruggle. So, analyze your strategy basedon internal performance and ability andthe environment. Consider your optionsfor change in view of market trends.Avoid unrealistic assumptions aboutwhat you can do, what the competitioncan do, and how markets will behave.

2. Operations. Operations is respon-sible for 30 percent of change failures.Operations includes every input, con-version process, and output—all sys-tems, processes, structure, andtechnology. It also gathers in all sup-port functions, regardless who doesthem or how, because they all con-tribute to the ability to create value.No matter what your core process orcompetitive advantage is, several sup-

Performance PyramidAttend to three key elements.

CHANGE PERFORMANCE

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

people who lack them entirely. That’swhy spotting these strands, howeverundeveloped they may be, is central toany effort to identify leadership poten-tial. People who lack them are unlikelyto ever reach the highest leadershiplevels—no matter how many otherleadership traits they possess. Onlywhen people acumen and businessacumen are present in some degreeshould personal traits come into play.

IInnddiiccaattoorrss ooff LLeeaaddeerrsshhiipp PPootteennttiiaallI’ve noticed several signs that a per-

son has high potential for leadership. A wide cognitive bandwidth—the

capacity and inclination to see things ina broader context—is an earmark of aleader who anticipates how changes inthe environment will affect the businessor of a marketing VP who sees how

marketing relates to company direction.Leaders aren’t born with the breadthand scope of thinking, but those with adrive to see things from a broader viewhave the potential for it. Some youngleaders exhibit a conceptual ability torise above details, to see a broaderview, and place themselves and theiraccomplishments in that broader con-text. Look for actions that reveal suchthinking—and the willingness to putthe company’s interests above theirown ego and to think strategically fromthe viewpoint of the business.

Leaders make sense of all they takein and set a clear course of action. Aftergathering information from multiplesources and shaping several alterna-tives, they can sort out what is impor-tant, make a decision, and act on it.Even at lower levels, information isoften muddled and the right path isunclear, but leaders with high potentialfind clarity and act decisively despitethe uncertainty and ambiguity that

Leadership Essentials

DO YOU KNOW Aleader when you

see one? If you havethe wrong notion of what a leader isand does, or if you are focused on thewrong people to begin with, all yourdevelopment efforts won’t deepenyour leadership pool.

Brilliant strategists, creative genius-es, financial engineers, and other brightpeople command our attention andrespect. We recognize such individuals’knowledge and intelligence, respecttheir opinions and ideas, and willinglyfollow them. Combine that great men-tal ability with a strong work ethic anddrive to achieve, and no wonder peo-ple are impressed. Unaware of theirown shortcomings and driven to suc-ceed, these experts push for leadershipjobs at higher levels, persuading—sometimes even intimidating—theirbosses to promote them. But manyexperts lack essential leadership traits.Although they may succeed for awhile, without a natural ability to lead,they are unlikely ever to succeed asCEOs or leaders outside their expertise.

What does a natural leader look likeat the age of 25 or 30? Usual attempts toanswer that question include lists ofpersonal qualities. These can be mis-leading, because the same wonderfulpersonal qualities can be found in polit-ical or spiritual leaders who have notalent for business. Besides, many per-sonal traits and capabilities associatedwith leadership in the past are insuffi-cient today. You have to go beyond thelist of desired personal traits to includeother indications that a person can leada business function, unit, or company.

One way to think about the rawtalent or inner engine of a leader is tothink of two strands of a helix: peopleacumen (the ability to harness people’senergy) and business acumen (under-standing how the business makesmoney). These strands are largely inplace in individuals by the time theyreach their 20s. After that, we can testsomeone’s people acumen and busi-ness acumen and give them opportu-nities to expand them. But we don’tknow how to implant them in mature

stymies others. They take disparatefacts and observations and connect thedots to create a clear view of what islikely to happen before it actually does.Because they see the hazy outlines ofchange coming before others do, theyput their people on the offensive.

Most leaders show an uncommonability to analyze and synthesize dataand make decisions based on the dataand on intuition. They realize that 20percent of factors account for 80 percentof value. They sift, sort, and select infor-mation based on its content and source.They think in second, third, and fourthorders of consequence, are clear aboutgoals and constraints, develop alterna-tive paths, and have a backup plan inthe event a decision proves wrong.

Leaders make judgment calls dailyas they balance the inherent tensionsbetween short and long term, betweenshareholders and customers andemployees and external constituencies,and between opportunities and aspira-tions versus real-world realities andconstraints. Some people are not deci-sive or tough enough to lead. They letopportunities slip away, powerful per-sonalities dominate, and other peopleset the course. They are not leaders, inspite of the depth of their thinking.

Leaders have a passionate quest tolearn and grow. High potentials takestretch assignments that tax their abili-ties—they are stimulated by the chal-lenge and the opportunity to increasetheir knowledge base about the busi-ness, people, and the external world.They are intellectually honest and havethe self-confidence to acknowledgewhen they don’t have the answers,knowing they can find them. They aredissatisfied with incremental progressand the status quo. They search for newideas and views, making them morecontemporary than their bosses, moreaware of leading technologies and trends.

Look at integrity and screen outthose who fall short. Leaders must tellthe truth at all times, fearlessly andwithout weighing the consequences.When confronted with a moral or legalquandary, they must always choosethe ethical course of action. Leadersmust also radiate a sense of urgency.Over the years, high-potential individ-uals are given increasingly broad anddifficult jobs. Without relentless driveand near-total immersion, they can’tendure long enough to master tasks. LE

Ram Charan is a global consultant and author of Leaders atAll Levels (Jossey-Bass) and What the CEO Wants You toKnow and Execution. Visit www.ram-charan.com.

ACTION: Select your high potential leaders.

by Ram Charan

L e a d e r s h i p E x c e l l e n c e 9

LEADERSHIP POTENTIAL

H o w c a n y o u i d e n t i f y t h e h i g h p o t e n t i a l s ?

idly ignore those who choose to ignorethem. Lyndon Johnson was brilliant attranslating his contrarian domesticagenda into legislation. He was peer-less at dispensing favors at criticalmoments (to win swing votes); but hewas equally firm-handed in ensuringthat those who broke ranks in tryingtimes suffered the consequences.

6. Mistrustful. Many good leadersare humanists. Still, the survivors areusually closet conspiracy theorists.Most constituents who approach theleader, in innocence or with guile, havetheir own agendas. Effective leadershide a healthy dose of skepticism, evenmistrust, beneath a sunny, inspiringexterior. In the end, the leader isresponsible for himself or herself.

7. Wily. The best leaders are open,

honest, and accessible; and the converseof all three. Leaders must be shrewdtacticians if they are to accomplish any-thing in a bureaucracy. That means dol-ing out access carefully, since accessempowers those who are perceived tohave it. (If everyone has access, then itceases to be a carrot or a stick.) It alsomeans playing some games close to thevest—offering under-the-table favorstomorrow in return for a key votetoday. (Kennedy unraveled the 1962missile crisis by secretly promisingfuture withdrawal of our missiles inTurkey in return for Khrushchev’s pub-lic withdrawal of missiles in Cuba.)

While I don’t condone dishonesty, Idon’t believe the one about George Wash-ington and the cherry tree. Leaders putdifferent spins on an issue, dependingon whom they’re addressing. This oftenresults in perceived slickness; but toexpect saintly consistency is to misun-derstand the nuts and bolts of getting

Leaders of Performance

WITH A NATIONALelection this year,

talk of leadership isagain in the air. Most focuses on thegood stuff: ennobling vision, empow-ered followers, maintaining the com-mon touch. These important qualitiesare often lacking in leaders of all stripes.

Nonetheless, leadership also hasanother, less majestic side. My experi-ence suggests the best leaders are:

1. Manipulative. Wise leaders areaware of the image they project. Theymay preach inclusion, and yet they areintent on carefully orchestrating everycontext to present the precisely desiredmessage. I’ve never seen a politician soadept as Bill Clinton at snatching upany baby in sight, then hoisting thetoddler into the camera’s eye. Only theleader really understands, holistically,the persona she or he wishes to con-vey: The best ensure that nothing getsin the way of that presentation.

2. Symbol-conscious. While “get-ting down to brass tacks” is a must,practical policy implementation isusually possible only if the atmos-pherics are compelling. Effective lead-ers, like Ronald Reagan, have a surefeel for the symbolic content of theiractions. To champion followerinvolvement, for example, leadersshould exhibit involvement (follow agenuine open-door policy, regularlyeat in the employee cafeteria, etc.)

3. Dictatorial about the dream. Tobe effective, a vision must be crystalclear. While compromise is necessaryto build a consensus for action, thebest chiefs are insistent that the maintheme not get so enlarged or dilutedas to become insipid.

4. Narrow-minded. Wise honchosknow they can accomplish only limit-ed agendas. The number of importantproblems and opportunities that con-front—and distract—leaders at all lev-els is staggering. The best tack andjibe constantly, but, at a deeper level,fight to keep the focus on the mainevent (“the economy, stupid”).

5. Punitive. Carrots motivate betterthan sticks, but top-notch leaders don’t

work done through many constituencies.8. Power mad. These words doubt-

less bring to mind Hitler, Stalin andSaddam Hussein. Yet make no mistake,the best leaders, junior to senior, areavid students of power. We all operateamid webs of friends and enemies,with every shade of gray imaginable inbetween. To not understand the natureof the contest is almost surely to losebefore you’re off the starting blocks.

Leadership is as much about rough-and-tumble implementation as it isabout a transformative vision. Thehuman condition requires leaders toattend to many factors convenientlyoverlooked by those who see only thesmiling side of the leadership coin.

9. Performance-minded. Set reason-ably high hurdles for incentive pay andlet folks figure their own path to salva-tion. 3M, for example, says its top peo-ple must score well on both profitabilityand percentage of sales derived fromnew products. One company’s sales-people must rank in the top half inbillings and customer satisfaction to getany bonus pay. At McKinsey & Co.,evaluations reflected how well you per-formed on your current project assign-ment, and yet there was a long-termrequirement to become a recognizedexpert at something. No one told youhow to divvy up your time to achieveboth objectives. It was simply clear that,over time, you would be graded forshort-term service excellence and long-term technical stature. So, if you’ve gottwo strategic goals, tie financial incen-tives (at least one-third of total compen-sation for managers, one-tenth at thefront line) to above-average perfor-mance on both. And don’t fudge! Youneed an ouch-level penalty for thosewho don’t cut both varieties of mustard.

We routinely ask front-line people todo lots more. Before, we said, “Showup, we’ll tell you what to do,” then youdid it. Now you must: 1) become goodat something, since expertise is the basisof all value added; 2) become good atlots of things (everyone must be well-rounded); 3) be a first-rate team player;and 4) exercise initiative daily in solvingcustomer problems. Performance musttake a front-row seat. Historically, we’vehardly used merit as the basis for evalua-tion. In fact, genuine merit-based ratingsseldom cover more than 5 percent of theworkforce. To survive economically, wehave to apply perform-or-else standardto everyone and every enterprise. LE

Tom Peters is CEO of TPC, best-selling author and dynamicspeaker. Visit www.tompeters.com.

ACTION: Set and apply performance standards.

by Tom Peters

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

LEADERSHIP PERFORMANCE

T h e b e s t l e a d e r s a p p l y s o m e t o u g h s t a n d a r d s .

tremendous assets that would continueto serve him well as a senior leader, butthat his peer relationships needed someconcentrated time and attention. Hismanager agreed that both the companyand Henry’s best interests would beserved by investing time in coalitionbuilding with his colleagues. He startedlooking for ways to increase collabora-tion and share successes. His break-through came when he realized that hehad chosen a narrow and limiting viewof the business, and had resisted devel-oping personal relationships with hispeers because he viewed them as com-petition. Once he understood how hischoices had alienated others, he agreedto clean up conflicts from the past anddevelop shared agreements for howbest to work together. He chose to seehimself as a leader of the broader busi-

ness, and within six months, he wasoffered a senior leader role, overseeingmultiple business units.

FFoouurr--SStteepp PPrroocceessssUse this four-step process—informa-

tion, insight, innovation, and impact.1. Gather information. The coach

and coachee explore the current situa-tion and the desired one. They discussfeedback. They look at values, think-ing and behavior patterns that canblock success. This step generates self-awareness, motivates the executive totake action, and creates trust betweencoach and coachee. The coach invitescandid feedback from colleagues: man-agers, peers, and direct reports.

2. Gain insight. Until Marian heardthe qualitative feedback from others,she was unable to unpack the actionableelements of “style” in her way. Typical360s offer partial insight into how a per-son is viewed by others, but qualitative

Executive Coaching

EXECUTIVE COACHING isa popular way todevelop leaders. Its

ROI is well documented. Since somuch benefit comes from what theexecutive and coach do together, exec-utive coaching can be construed to be amysterious process. What goes onbehind closed doors? Is emphasisplaced on what the individual needs,or what the business calls for? Effectivecoaching strikes an ideal balancebetween compelling personal aspira-tions and the goals of the business. • Marian was a seasoned professional

in a Fortune 500 business servicesfirm. She was deeply committed to herwork. She invested tremendous discre-tionary effort to deliver on very tightdeadlines on an overwhelming num-ber of projects. She thought she hadclearly shown senior management herworth. When promotion time came,she was passed over. When Marianreflected on feedback she had receivedin the past, what swirled around herwere vague notions about “style”issues. Through work with an execu-tive coach that included qualitativeinterviews with her colleagues, Marianwas able to see that what had beenlumped under the category of “style”were in fact, three specific areas for herprofessional development: developingher personal influence skills, becominga more effective communicator, andlearning to step back to identify whento let go of her agenda and when topersist. For each of these developmentareas, she was able to identify specificaction steps to increase her effective-ness. She circled back with her col-leagues to thank them for their candorand ask for their support along theway. Within weeks, people around herwere seeing real progress. Marian wasrelieved to have a clear route toincreased effectiveness, and was per-sonally committed to change.• Henry was a fast-rising star. He led

his business unit to incredible resultsand wanted bigger and broaderresponsibility. Through coaching, herealized that his gifts as a visionary,motivator, and strategic thinker were

interviews paint a richer picture of theperceptions of others. The informationgathered by the coach in conversationswith colleagues includes perceptions ofstrengths and opportunities for develop-ment. In this phase, feedback is reviewedwith the coachee, and the coachee looksfor themes. This results in a short list ofhigh-impact development goals thatalign with organizational goals.

3. Innovate. Action planning syn-thesizes the outcomes of the first twosteps into a clear and concise docu-ment that focuses the remaining work.The coach meets with the coachee andher manager to review the draft. Theexecutive then reconnects with thosewho provided feedback to thank themfor participating and to share the mainthemes and objectives. The coacheeasks others for ongoing support andfeedback along the way. Colleaguesare enlisted in supporting this person’sgoals and poised to notice the progressmade. As the coachee begins takingthe actions outlined in her action plan,she is encouraged and challenged bythe coach to stretch well beyond com-fort levels and old ways of thinkingand behaving. It is common for acoachee to experience a breakthroughand see what’s newly possible.

4. Measure impact. How do weknow if coaching is successful? Duringthe action plan development, thecoachee, with help from the coach andmanager, selects some clear measuresfor success, and milestones to mark theway there. It then becomes simpleenough to again gather informationfrom colleagues. The coachee preparesa results debrief to document progressand meets with her manager and coachto review together. During this meeting,the executive can appropriately pro-mote the successes to date. The manag-er can provide feedback on what’sworked and what hasn’t, and offerguidance for future development. Thecoach and coachee then prepare theexecutive to become her own coach.

The “secret sauce” of executivecoaching lies in the relationshipbetween the coach and the executivebeing coached. The degree of safetyand trust felt by the coachee greatlyinfluences how much he or she willexplore and experiment in coaching.

These four steps create a powerfulfoundation for a breakthrough in think-ing that drives bottom-line results. LE

Karen Elmhirst is an Executive Coach with Break ThroughConsulting, a results-driven executive coaching company.Visit: www.breakthroughconsulting.com.

ACTION: Use this process in your coaching.

by Karen Elmhirst

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

COMPETENCY DEVELOPMENT

F o u r s t e p s t o s u c c e s s f u l o u t c o m e s .

ing and public speaking skills. Iimmersed myself in marketing andread everything I could find on pack-aged food. I also sought coaching inpresentations. Some Pillsbury execu-tives were amazed I had time for allthis learning. By exposing my under-developed sides, I effectively shatteredthe myth that a CEO needs to have allthe answers—because often we don’t.And, by doing this myself, I hoped tocreate a supportive learning environ-ment committed to personal aware-ness and improvement.

Also, I had openly supported initia-tives for employees to take bold, brave,and creative approaches to work. Andyet I was uncomfortable with the com-pany’s casual dress code, and so I toldsenior staff to develop guidelines for a

new dress code. I then received feed-back that I wasn’t delivering on mypromise to support an open, creativeenvironment. When I recognized this, Istood in front of 3,000 employees andtold them I was wrong. My employeesrealized that I was human—somethingthat enhanced my credibility as a leader.

2. Enhancing self-expression.Authentic self-expression is the pur-poseful voice of the leader, whichunleashes talent in others to makevaluable contributions. Self-expressionis not a communication technique. Youmay not be a polished presenter, but ifyour voice is real and you can commu-nicate your vision with a sense ofmeaning, purpose, and conviction, youwill open up new possibilities. As aleader, your most effective communi-cation comes from your deeply heldbeliefs, values, and life experiences.When you learn to concisely connectyour external voice to these purposefullevels of yourself, your leadership

Follow the Leader

EARLY IN OUR CAREERS,we learn to master

content or areas ofexpertise, such as finance and opera-tions. Doing this well is critical to oursuccess. We make decisions from theframework of our expertise, and wedrive results from this vantage point.

Once we reach the top, the ruleschange. Top positions require a differentbrand of leadership. CEO leadershipgoes beyond content and creates the con-text for what is valued. Our focus shiftsfrom personal achievements to remind-ing others what is important.

We sometimes struggle with theillusion that we are the only ones whomake things happen. In reality, noth-ing is accomplished without engagingin relationships and appreciating theunique contributions of many people.

We lead by virtue of who we are.At every moment, our personality,personal history, and background arepresent—for better or worse. And, ourbelief systems, fears, strengths, andweaknesses are intimately reflected inour cultures. So, we either open up orclose down potential in proportion tohow open or closed we are personally.

TThhrreeee GGrroowwtthh AArreeaassWith CEO leadership, the develop-

ment of intrapersonal (self-knowledge)and interpersonal (relational-contextknowledge) skills becomes crucial. Tomake this shift, we need to ask sometough growth questions: How can I beeven more authentic as a leader? Howcan I enhance my self-expression?How do I create greater value?

1. Deepening authenticity. We can’tsustain our effectiveness and buildtrust without personal authenticityand integrity. Authenticity, the foun-dation for sustaining our leadership,means more than just telling the truth.It is the congruence of our inner andouter person. It means we compre-hend our strengths and weaknesses,and we’re not afraid to be vulnerablewith ourselves and with others.

When I became CEO of Pillsbury, Ineeded to improve my food market-

voice becomes powerful. Effective self-expression arises from within yourmeaning and life experiences and thentouches others to create value.

When considering how to enhanceyour self-expression, you should neverunderestimate the power of your wordsand actions. Employees want to pleaseyou and do good work, but they some-times put too much stock in what theythink you know. You need to be clearwhether you are setting a new standardor simply making a suggestion.

3. Creating optimal value. MostCEOs get results; fewer create value.We can leave a wake of bodies in ourpath; destroy the environment; andsacrifice our health, our purpose, ourrelationships, and our lifestyle—all inthe name of getting results. Are thoseof us who make these kinds of sacri-fices really creating value for our orga-nizations, our families, and ourselves?

Creating value involves broadeningour range of interests—or reconcilingself-interest with the common interest.Obviously, this is a major challenge.There are so many conflicting con-stituencies with which we must deal:shareholders, employees, the communi-ty, and the environment, not to mentionour personal well-being. How can wecreate optimal value? There is no oneright way to achieve this goal becausecreating value is relative to every indi-vidual, organization, and situation.

Creating value may involve person-al transformation. I invite you to com-mit to personal growth, and to servingpeople by making a difference.

As CEOs, we’re experienced inmaking decisions that contribute tobottom-line value. However, we needto challenge ourselves to think beyondthe bottom line and expand the reachof our business decisions to createbroader value for our stakeholders.

Our views of leadership must beturned inside out to deal with today’sdynamic realities and relationships. Somuch of today’s leadership is tacticaland specific, focusing on external man-ifestations like vision, drive, creativityor charisma. Since we each show upwith a different set of leadership quali-ties, leadership must be somethingdeeper than these external descriptions.

By deepening your authenticity,enhancing your self-expression and cre-ating optimal value, you can effectivelymeet your challenges. You’ll perceiveleadership from a fresh context: authen-tic self-expression that creates value. LE

Paul Walsh is CEO of DIAGEO. Visit www.diageo.com.

ACTION: Deepen your authenticity as a leader.

by Paul Walsh

1 2 L e a d e r s h i p E x c e l l e n c e

LEADERSHIP GROWTH

It’s about who you are and how much you care.

of their products and services toimprove their short-term profitability,they lose valuable, often irreplaceablemarket share. Profitable organizationsgrow by improving quality on everylevel at every opportunity and bymaintaining customer loyalty.

6. Inspire innovation and creativity.These factors drive growth. Silo-type,vertical management structures inca-pacitate people from contributing theirideas for improvement. By creating aculture that encourages and respectsemployee contributions, you outpaceyour competition and reduce turnover.

7. Cultivate client and customerrelations. Cultivate implies continuousimprovement, and relations implies aconnection. Developing long-term cus-tomer relations should be a core value,since people who have a good experi-

ence with a business becomerepeat customers 70 percentof the time—and they’re yourmost profitable customers.

8. Emphasize the “human”in resources. People stay withcompanies longer when theyfeel valued and feel theymake a contribution. Highturnover erodes profitability.

The cost of replacing an employee ishigh, and you lose valuable time inhiring and training, as new hires takesix months to become fully engagedand make meaningful contributions.

9. Manage your technology andinfrastructure productively. Wheninvesting in technology and infrastruc-ture, focus on the long-term productiv-ity savings and benefits rather than theshort-term expense. Some companieslose business by not upgrading whenappropriate; others lose money byupgrading more often than necessary.

10. Be proactive. Adopting a proac-tive strategy saves time and energyand creates goodwill with employees,customers, clients, vendors, and thecommunity. Being reactive only pro-longs the inevitable—and results inhigher costs, lower productivity, andlost valuable customer and client rela-tions. Build your reputation on “doingright” rather than “being right”.

When planning, set five big goals,and then craft your growth strategiesaround them and build in flexiblemilestones. By aligning your strategiesbased on the 10 commitments, you’llcreate a company built to prosper. LE

Janet Boulter heads the Center Consulting Group. Call (303)368-9954 or email jboulter@centerconsultgroup.com or visitwww.centerconsultgroup.com.

ACTION: Commit people to profitability.

Built to Prosper

HAVE YOU EVER SEEN Acolleague wrap up

a fabulous meeting,field a few questions with flair, andthen, just as he’s ready to wrap up,another hand waves: “So, Bob, every-thing you’ve said so far makes sense,but could you explain how this proto-col could have been effective with thatsituation in production last week?”Unprepared for this curve ball, youwatch as Bob stammers and stuttersnext to his pie charts, with an incoher-ent ramble that turns an otherwise starperformance into a show-stopper.

Public speaking is a common fearamong those in the business sector forgood reason. No one likes to be pep-pered with questions for which theyare unprepared. What’s a major key tominimizing that fear? Preparation.

Here are a few practical tips forpreparing for question-and-answerperiods, particularly when you expectdifficult questions from skeptics.

HHyyppootthheettiiccaall QQuueessttiioonnssWhen people ask a hypothetical

question, they often want to expresstheir opinion. Whatever answer yougive will be “wrong,” and they’llchange the details in the hypotheticalsituation and then set you straightabout what will or won’t work.

Tip: Sidestep the details. Refocus byresponding, “There are so manyunknowns and variables in hypotheticalcases that it’s difficult to give a mean-ingful response.” Or: “I prefer to focuson the current mission in formulatingpolicy for charitable contributions. Forthe present, I still consider. . . .”

Tip: Probe for the real issue andaddress that concern. Example: “Isyour concern in raising that questionthe safety issue?” If the person con-firms that the safety issue is whatprompted the hypothetical situation,then you can proceed to comment onthe safety issue rather than gettingbogged down in hypothetical details.

SShhooww--OOffff QQuueessttiioonnssGenerally, this “question” is a mono-

logue—either an opinion or barrage of

Commit to profitability.

TO ACHIEVE YOUR GOALSand build value, you

need to focus consistent-ly on the “shared vision” and agree onthe mission. Commitment produces thefocus necessary to generate the time andresources to achieve goals. Communicat-ing to your employees, vendors, clients,and shareholders that your manage-ment team is committed to meeting thegoals creates energy, enthusi-asm, and a spirit of teamworkaround measurable results.

To create and sustain profit-ability, make 10 commitments:

1. Craft visionary strategies.You need a map to knowwhere you are going and howto get there. When conductingstrategic planning, focus on theshort-term but plan for the long-term.When you focus solely on managing theefforts of the short-term revenue goals,you lose your focus on long-term tar-gets. Strategies are created for the long-term (5 to 10 years); plans implementedfor the short-term (1 to 3 years).

2. Adhere to core values. Have well-defined core values that serve as yourguiding light and weave them into allpolicies, procedures, programs, sys-tems, and structure. Continually com-municate these values to employees,customers, vendors, and consultantsto ensure everyone is committed toethical business practices. Integrateyour core values into every strategy.

3. Build a strong reputation. Repu-tation is dynamic, and everyone isresponsible for maintaining it to thestandards defined by the core values.One bad incident can destroy years ofgoodwill with customers and employ-ees. Profitable companies have a highpercentage of repeat customers.

4. Focus the spirit of competition.Competition is an excellent motivator.Use your competition to drive excel-lence. It is more profitable to focus onyour strengths, products, differentia-tors, market share, branding, andindustry position than trying to reactto competitor’s strategies or initiatives.

5. Integrate quality at every level.When companies sacrifice the quality

by Janet Boulter

Tough QuestionsL e a r n t o t a c k l e t h e m .

by Dianna Booher

PERFORMANCE COMMITMENT COMPETENCY PRESENTATIONS

L e a d e r s h i p E x c e l l e n c e 1 3

data. Then, the asker tacks on a limpquestion like “Wouldn’t you agree?”

Tip: Call for the question. Example:“Would you please restate your ques-tion?” or “Were you just making anobservation?” After some fumbling, theperson may ask a question that youcan answer briefly and regain control.

Tip: Acknowledge the comment andmove on. Examples: “Thank you forthat observation.” “You must havesome experience with similar situa-tions.” “I’m sure others may feel asyou do.” “That’s something else wemay want to consider in the decision.”Break eye contact, and move on.

HHoossttiillee QQuueessttiioonnssPeople ask hostile questions for sev-

eral reasons: 1) They disagree with youor have wrong information. 2) Youhave no credibility with them. 3) Theymisunderstand you. 4) They think theyare saving the day for others. 5) Theirpersonality makes them look for thecloud in every silver lining. 6) Theyhave a hostile tone and expressionwithout realizing it. 7) They are angrywith someone else and are taking it outon you. 8) Their question is neutral, butyou are reading hostility into it.

Tip: Rephrase a legitimate questionminus the hostile tone. If the question is,“Why do demand six years of experi-ence for all work? That’s unreasonable,”rephrase it: “Why do we think six years’experience is necessary? Well, first. . . .”Don’t feel that you have to refute anopposing view in detail. Simply com-ment: “No, I don’t think that’s the case.”Your answer will sound authoritativeand make the asker appear rude andargumentative if he or she continues.

Tip: Acknowledge and accept feel-ings. By acknowledging the feelings ofthe asker, you may defuse the hostilityand help him or her receive youranswer more openly. Examples: “Itsounds like you’ve been through somedifficult delays with this supplier” or“I don’t blame you for feeling as youdo, given the situation you describe.”

Tip: Agree with something the ques-tioner has stated. Try to find somethingin the hostile question with which youcan agree. This diffuses the inclinationto argue. Then give your answer.

Most high-level presentations includeQ & A. Just think of it as one more com-ponent for which to prepare and to useto win over your audience. LE

Dianna Booher is a keynote speaker and author of more than 40books, including The Voice of Authority and Communicatewith Confidence. Visit www.booher.com or call 817-318-6000.

ACTION: Prepare to handle tough questions.

by David Benzel

learn more. Credible leaders are learn-ers who ask, listen, and then decide.Sadly when most people are promoted,they stop asking questions and becomeanswer-telling machines that are all-knowing, all-seeing, and certain-of-everything. They jump to conclusionsand judgments, as if any hesitation orinquiry indicates incompetence.

3. State conclusions tentatively.After gathering and processing infor-mation, most leaders just blurt out theanswer and command: “I’ve made upmy mind, so go do it.” However, lead-ers who trust the opinions of followerswill state their conclusions tentatively,leaving a door open for unknown factsor opinions to find the light of day.When leaders overstate a position,they leave no room for other positionsexcept through confrontation! Whatcan followers say in response to, “Thisis the only way to go.” However, if yousay, “The data I’ve seen has me leaningtoward this option, unless there’ssomething I’m not aware of,” yourcredibility is enhanced by your open-ness to feedback from others.

4. Admit not knowing all answers.Since no one has all the answers or

information, admitting thatyou don’t know an answerdoes not make you incom-petent. Making up answersjust to appear smart back-fires. Wise leaders seekinformation through manysources. Being resourceful isa sign of competence. Theyknow how and where toget answers and say: “Idon’t have the answer, but I

know where to look.”5. Apologize for mistakes or poor

judgments. Have you ever noticed thelook of relief—and surprise—on a per-son’s face when you apologize for amistake or poor judgment? Once yourfollowers learn that you are a leaderwho takes personal responsibility foryour decisions—and apologizes for mis-takes—your credibility with them soars.It takes courage to admit mistakes, butyour relationships grow stronger.

Leaders shed their Superman capewhen they exhibit authenticity. As theillusion of perfection fades, the imageforms of a leader who is flawed andvulnerable, but ready to learn lessonsand move on. Which leader wouldyou choose to follow? LE

David Benzel is founder of Winning Ways, a coach in leader-ship and peak performance, and author of Chump to Champ.Call 1-800-616-1193 or email davebenzel@cs.com.

ACTION: Build your credibility with constituents.

SUPERMAN IS A SUPER-hero due to his many

powers. However, evenwith all his strengths, Superman has avulnerability—Kryptonite. In spite ofhis weakness, Superman’s credibility isbeyond reproach.

Most managers desire to appear a“Superman” to their followers; per-ceived as perfect, flawless, impenetra-ble, and invincible. Perhaps theywonder, “Why would anyone trust andfollow me if I’m flawed and vulnera-ble?” So, they get caught up in a gameof being right, or acting as if they’reright. This is like parents who mightnot know why they give a command orpunishment to their children, but say,“Because I said so” to save face.Ironically followers at work, like chil-dren at home, know thattheir leaders have flaws.

Attempts to create theillusion of perfection justdistract from whatevercredibility is there in thefirst place. Credibility is thekey ingredient in leader-ship. The Latin root word iscredo, meaning “I believe”or “I trust.” Credibility isgiven to those who aretrusted—to leaders whom followersfind believable. If you’re not believ-able, nor trusted to represent yourselfhonestly, you will have little credibility.

HHooww ttoo BBuuiilldd CCrreeddiibbiilliittyyThe answer to the paradox of how

to build credibility without being bul-let-proof is found in being real orauthentic. As a leader, you can demon-strate your genuineness in five ways:

1. Honor others, let others honor you.Shining a light on the accomplishmentsof others reinforces the behaviors youwant to see, boosts morale, and teachesthe habit of honoring to everyone. Youcan’t successfully honor yourself, asthis will be seen as boasting. Soon oth-ers will be slapping their own backs.When you sincerely edify those aroundyou, you are elevated in the minds offollowers as trustworthy and humble.

2. Become a learner, not a judge.When you ask good questions, you

Build CredibilityShed the Superman cape.

LEADERSHIP CREDIBILITY

1 4 L e a d e r s h i p E x c e l l e n c e

Leading Change

WITH INCREASEDworkloads,

demanding staff ratios,and challenging work conditions,many people feel burned out. Today’sworkers are not signing on and stayingon just for money. They are opting foremployers who care about them. Howthey are treated on the job is a primaryfactor in their satisfaction, resistance toburnout, and willingness to be loyal.Work-life balance is often a top priority.

Only one in eight employees saytheir employers put effort into keepingthem on their jobs. Considering that itcosts thousands of dollars to recruitand hire new employees, leaders areeager to retain the ones they have inaddition to attracting the emergingworkforce. Many have learned that torecruit and retain, they cannot simplyoffer more money or bigger benefits.

They need to give employees ahefty dose of nurses’ medicine. Allbusinesses can benefit from these 10tips, by treating their employees withthe same competent, compassionateTLC that nurses give their patients:

1. Smile a lot. Be kind. Visit themoften. Keep an open-door policy. Don’tjust speak to your staff members whenthey make a mistake, visit with themwhen they’ve done a great job andcommend them in person, rather thanin an email or memo. No matter howbusy you are, don’t act rushed or dis-tracted. Make your employees comfort-able around you and allow them tospeak their feelings, ideas and needs.

2. Ask, “How can I help you?” Don’tassume that you already know. Hold astaff meeting on the topic, conduct ananonymous survey, or ask them whatthey need in an employee evaluation.You may be surprised what you learnwhen you simply ask the right question.

3. Do an “assessment” regularly.Ask about their condition or job posi-tion. Note what you observe. Evaluatethe situation with each person, thenmake a plan and implement it. Givepeople access to the support they needto perform at their best. They will theydo a better job and be more satisfied,and your company will profit, too.

Handle reorganizations.

by Gary Bradt

Increase RetentionTreat your people with TLC.

by LeAnn Thieman

CHANGE MERGERS MANAGEMENT RETENTION

TODAY, COMPANIESare reorganized,

bought and sold regu-larly. These changes are usually madewith the best of intentions but don’talways yield the intended resultsbecause leaders pay more attention tothe logical aspects and the businesscase than to the psychological aspectsof how to get people to enthusiastical-ly embrace the new entity ornew way of doing business.

Here are five keys to meet-ing this challenge.

1. Accept that in the eyes ofemployees, a merger of equalsrarely occurs. When two orga-nizations come together,senior managers often saythat “there are no winnersand losers.” Employees, however, seeit differently. They notice which namethe new company adopts and howmany executives from each companyend up in similar roles on the newteam. They keep score, and their initialfeelings toward all the changes oftendepend on their final tally. As a leader,you need to offset negative percep-tions. Try to balance the new teamwith people from both companies. Thebest-person-for-the-job should be yourprimary criteria, but a perception thatboth sides are represented is impor-tant. When meeting with people,acknowledge your desire to make it amerger of equals. Ask them to judgeyou and the process on what theysee—not on what they hear as rumors.

2. Get to know new people. It’s easyto stick with the people you know, solearn the talents, skill-sets, and person-alities of those from the new organiza-tion. Discover where hidden talentmay lie. Don’t rely on rumor, reputa-tions, or HR. Spend face-time with keypeople. Learn what makes them tick—their values, work ethic, thinking anddecision-making. Make assessmentsbased on your direct experience.

3. After the merger, attend to thepsychological aspects of change. Pre-merger activity is filled with logicalanalysis. Everything from geogra-phies, facilities, technical expertise,

market share, and supply chain logis-tics are examined. Often, the soft sideof the deal—culture and people—getshort shrift. All of your analysis willcome to naught if you don’t get peopleto act in accordance with your logicalassumptions once the deal goesthrough. Ignore the soft side and yourisk watching your plans sink into apsychological swamp, swallowed upby fear and resistance. To avoid thisoutcome, involve people meaningfullyin making the change happen. Thenthey don’t have time to worry or com-plain about it. Getting them involvedon teams will help you make betterdecisions (after all, they know theirday-to-day business better than youdo), and their buy-in and commitmentto decisions will increase.

4. Be honest: Share what’s in it forthem, both the good and thebad. Don’t assume people willsee the benefits of change.Touting the benefits to stock-holders is fine, but it won’tcalm the fears of those whofeel threatened by the change.Articulate how benefits willaccrue to those who embracethe change. And be honest

about the potential downside: if thechange will result in some pain and sac-rifice (loss of jobs, positions, or reloca-tions), be up front about that too. Thesame question is on people’s minds:“What is this change and how will itimpact me?” Until you answer thisquestion, anything else you share willbe tuned out, or misinterpreted as ful-filling employees’ worst fears.

5. Passion plus patience equals long-term success. Senior executives who areinvolved in making decisions tend tofeel more passionate about change.They’re involved from the start, see thebenefits, and feel personally invested.Most others feel as if they are just alongfor the ride. They feel powerless. So, letpatience be your guide. Get peopleinvolved in the change, tell the truthabout where you are headed, why youare going there, and ask for their help.

Analyzing the business case and get-ting the deal done constitute the easieraspects of leading change. Less com-fortable is the people part—addressingthe emotions and needs of peoplewhose buy-in is needed to succeed.Being a leader of change means step-ping out of your comfort zone to helpemployees re-establish theirs. LE

Gary Bradt is a popular speaker and author of The Ring In theRubble. Visit www.TheRingInTheRubble.com.

ACTION: Get your people on board.

L e a d e r s h i p E x c e l l e n c e 1 5

4. Be prompt in answering their“call lights.” When a patient has aneed, they “call” for assistance; watchfor instances where your employee“calls” for help, verbally or otherwise.Address each concern and attempt tomeet their needs as soon as possible.

5. Explain procedures and changes.Make sure your people know why thechanges are taking place and reiteratetheir importance. While it may not bean easy course, clarify the good thatwill come from it. Reinforce how theircooperation and positive approach willgreatly affect the workplace.

6. Communicate often and clearly.Keep your employees up to date withwhat is happening so they feel moreinvolved and less afraid of change. Ifthey have concerns, be sure to listenfirst—without talking or interruptions.A gentle touch on the hand or shoul-der conveys sincerity and interest.

7. Ease their “pain.” Make honestefforts to relieve the pain. Ask for sug-gestions. If the pain is personal, such asa relative passing away, be considerate.Offer them a day off or an additionalpaid day of vacation. Send flowers or asympathy card to show that you care.

8. Promote independence and self-sufficiency. Strengthen people. Offercontinuing education. Compensatethem and adapt their schedules sothey can gain new skills. Give them asmuch control as possible, and they aremore likely to cooperate with the“treatment plan” and other changes.

9. “Change positions.” Being in thesame position too long can be uncom-fortable or stifling. Suggest a transferwithin the department or organization.Offer flexible shifts, telecommuting, orjob sharing. Encourage people to growin their skill sets and job responsibilities.

10. Provide them “nourishment.”Help nurture their minds, bodies andspirits. Remind them to take breaks,eat meals, and ask for help. Provideinspirational, encouraging books, peri-odicals, and speakers. Bring in a mas-sage therapist after a stressful quarteror show your appreciation with a freelunch during a successful period.

Implementing these 10 tips creates a“care plan” that strengthens people,promotes a positive culture, and boostsproductivity, creativity, loyalty, and thebottom line. Giving employees a doseof the same medicine nurses give theirpatients results in greater retention. LE

LeAnn Thieman, LPN, CSP, is an acclaimed speaker and co-authorof Chicken Soup for the Nurse’s Soul, Second Dose. Call 1-877-844-3626 or visit: www.NurseRecruitmentandRetention.com.

ACTION: Give people a dose of TLC.

by Lance Secretan

because I know the terrain like theback of my hand. I want you to skiright behind me as close as possible,one after the other. Watch my skis—itwill be the only thing you will be ableto see in the whiteout. If you see thetails of my skis going up and down,you will know I’ve just gone over abump and you can brace yourselfaccordingly. If my skis turn, follow thedirection they take. Trust me—we aregoing to be okay.”

It went exactly as planned—a teamof courageous, trusting, and safe skiersand leaders high-fived their successafter we zoomed into the void togetherand arrived safely on the other side—all in one piece.

Six months later we held a reunionconference call with this team and reliv-ed the euphoria of our experiences.

SSoouurrcceess ooff TTrruussttWhat are the sources of the trust and

courage that make for the essential com-ponents of leadership, I wondered?Why did they trust me? Why were theycourageous? We know how importanttrust and courage are, but how are theyacquired or bestowed? Every leader

wants to know this.One person replied, “I

trusted you because youloved me—I could see it inyour eyes, and I knew youwouldn’t do anything thatwould hurt me.” This gotme to thinking about howimportant love is in build-ing trust. Another said, “Onthe first day you explainedhow to ski moguls, then

you demonstrated it, then you askedus to do it, then you explained andcoached us. I trusted you from then onbecause you helped us to grow safely.”Another said, “You never forced us togo beyond our potential competence—out of our comfort zone, yes, but notout of our possible mastery”. Anothersaid, “You didn’t buy into my fear—you simply didn’t think my fears werejustified. I thought about your view ofme and then I thought about my viewof me, and I decided that I liked yourview better—so I decided to trust you.”

We had fun, we grew and learnedtogether, we laughed and stretchedourselves, and we looked out for eachother. Courage, trust and love—magicand essential ingredients for leaders inquest of the extraordinary. LE

Lance Secretan is an expert in leadership development. Visitwww.Secretan.com.

ACTION: Build trust in your team.

LAST WINTER, I TOOK ONEof several groups of

leaders to the top of a12,400 foot mountain. They were visit-ing with me in my Colorado home tolearn how to make breakthroughs intheir skiing and leadership skills.

Skiing is a metaphor. I teach interme-diate skiers how to ski double-black dia-mond runs in one day. Most skiers say itcan’t be done, but we do it as routine.First, we ask skiers to open themselvesto new ideas and thinking and to let goof their existing, outmoded beliefs andtechniques. This requires courage. Thenwe teach them how to be authentic onthe mountain. We ask them to modelservice and to tell the truth (I am cold, I’mafraid, I’m hungry). We model a lovingteaching style and ask them to be lovingin interactions with eachother and to be effective.

These are the qualities ofa great leader—courage,authenticity, service, truth-fulness, love, and effective-ness. Learning how to skidouble-black diamonds inone day is the mountainequivalent of transformingleadership style and corpo-rate culture and passion ina short period of time—both are with-in the reach of those who are passion-ate and yearning to grow as leaders.

After a series of wonderful runs, wedisembarked from the button tow atthe top of the tallest mountain in thearea, only to be met by a suddensnowstorm, with ferocious winds thatarrived without warning and visibilitydeclining to about eight feet. We werethe only people at the top of the moun-tain, and with no way down except bywalking and carrying our skis. I hud-dled with my team in the storm.

HHeerree IIss tthhee PPllaann“Here is the plan”, I told them. “The

only way off the peak is to ski downthe side of the mountain for about1,000 feet as quickly as we can, inorder to build up enough speed toshoot up the other side. But we won’tbe able to see anything, and you don’tknow the mountain. So, I will ski first,

Building TrustI see skiing as a metaphor.

LEADERSHIP TRUST

1 6 L e a d e r s h i p E x c e l l e n c e

4. Commit from the top. Manyrecognition programs fail becauseexecutives view recognition andrewards as soft topics devoid of bot-tom-line impact or because employeesfail to believe that executive manage-ment supports recognition. Executivebriefings by recognition Subject MatterExperts (SMEs), visible executiveinvolvement in launch campaigns, anddedicated senior sponsorship for theprogram combat these issues.

5. Consolidate efforts. Tighter align-ment, increased visibility, administra-tive efficiency, andeconomies of scale are just afew of the benefits fordeveloping and maintaininga strategic, enterprise-widereward and recognitioneffort. This effort shouldinclude a documented plan,high-level framework forformal and informal recog-nition, and enterprise-widetools of which all depart-ments can take advantage.

6. Decentralize ownership. A consol-idated, enterprise-level recognitionstrategy should not preclude individ-ual groups from owning and imple-menting the recognition strategy in away that will be meaningful to thepeople in their division. Each unitshould have one or more “recognitionadvocates” that champion the pro-grams, possess the tools to launch newinformal and day-to-day recognitioninitiatives, and capture best practices.

7. Align with corporate goals andvalues. Alignment happens in the day-to-day actions of every employee. So,recognition programs should bedesigned to clearly communicate andencourage the desired values andbehaviors while not stifling the creativ-ity that employees will show whenexhibiting these behaviors.

8. Apply consistently and equitably.Employee recognition programs that areimplemented with no guidelines andcomplete discretion over who and whatgets awarded ultimately get viewed as“favorite pet” awards. Online helpguides, weighted “What Award ShouldI Give” wizards, value/behavior track-ing tools, and embedded approvalstructures ensure that initiatives areimplemented fairly and equitably.

Recognition and Reward9. Recognize real-time performance.

Recognition initiatives that are not tiedto performance or are of forced quantityand timeliness won’t drive the desiredresults. Leaders should foster a culturewhere employees are awarded in real-time for exhibiting the defined behav-iors that drive company performance.

10. Continuously improve. Lack offreshness is the largest complaint ofemployee participants in recognitioninitiatives. Instead of waiting for annu-al “update” campaigns, dedicatedrecognition advocates should meet fre-quently to share ideas, capture bestpractices, and make changes to theprograms. These employees should beempowered with the tools necessary toupdate communications and incorpo-rate program changes.

While everyone knows we aren’tmotivated equally by thesame rewards, you mightnot know it by the waymany companies managetheir incentive programs.HR managers oftenassume that what isrewarding to them will berewarding to others.

Rarely is segmentationresearch applied toemployee populations to

better understand what motivates onegroup over another, even thoughemployees may be motivated by dif-ferent recognition practices to maxi-mize their productivity.

SSiixx RReewwaarrdd PPrrooffiilleessTo understand how the workforce is

segmented on its reward preferences,we conducted a survey and analyzedparticipants’ recognition preferences.We identified six reward profiles,along with some characteristics of peo-ple in each reward segment.

1. Awards Seekers (22 percent) wantincentives that have both monetary andtrophy value. They are highly motivat-ed by gift cards, travel awards, and sta-tus awards and are less motivated bythings that take time away from theirnormal routines such as the opportuni-ties to mentor other employees, workwith people outside their own area, ortake on challenging new projects.

2. Nesters (20 percent) are turned offby incentives that take them away fromhome. Travel awards and the opportu-nity to attend conferences are leastappealing. Nesters are more likely toenjoy days off, flexible scheduling, anda reward of a meal with their family.

3. Bottom Liners (19 percent) areextrinsically motivated but have less

L e a d e r s h i p E x c e l l e n c e 1 7

PEOPLE RECOGNITION

by Mel Van Dyke and Rick Garlick

WHETHER THE GOAL IS CUSTOMERcentricity, growth or innovation,

most organizations grapple with howto attract, retain and engage top talentin achieving core business strategies.The most effective tool to create andsustain a culture that engages andaligns employees behind businessimperatives is a performance-basedrecognition approach called EnterpriseRecognition Management. This uniqueapproach is defined by 10 tenets.

1. Empower managers. Most man-agers lack the positive reinforcementskills necessary to attract, retain, engage,and motivate their people. Few man-agers use recognition as a motivationaltool because they don’t know how,they do not feel it is their job, or theydo not feel their employees value it. Allmanagers should be empowered withrecognition training that helps themidentify employees’ motivation pro-files, assess their strengths and weak-nesses in positive reinforcement, andidentify how real-time recognition canhelp them motivate their people tomeet their personal business goals.

2. Ensure meaningful recognition.Most people are not consistently rec-ognized in ways that are meaningfulto them (and recognition that does notmap to an employee’s wants or desiresis ineffective). So, managers and lead-ers need to understand what types ofrewards and recognition are mostmeaningful to their employees—fromverbal praise to merchandise to park-ing spots. Employers should considerusing assessment tools to uncoverwhat truly motivates their employees.

3. Measure success. Recognition toolsenable managers to capture, track, andreport the behaviors on which recogni-tion is based. Employee engagementand pulse surveys allow employers tocapture the voice of the employee andmeasure how often meaningful recog-nition occurs. Base the recognition pro-gram on measurable goals with metrics.

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

concern about trophy or award valueand are only concerned about themonetary value of rewards. This groupplaces high importance on receiving acash bonus. They also value awards,such as point programs. They placevery little emphasis on receiving directpraise or recognition in any form.

4. Freedom yearners (17 percent) areless materially motivated, with limitedinterest in gift cards and award pro-grams. They are best rewarded by giv-ing them flexibility—flexible hours,freedom to choose how to best achievetheir goals, and the ability to chooseinteresting and challenging projects.Define the outcomes you want them toachieve, and allow them to find theirown best path to achieve their goals.

5. Praise cravers (16 percent) valuepraise—whether given verbally, writ-ten, formal or informally given bypeers. They desire to have their workacknowledged, with or without anaccompanying award of monetaryvalue. These people also have the leastinterest in taking days off or flexiblescheduling, suggesting that theyachieve a great deal of personal signifi-cance from a job well done at work.

6. Upward movers (8 percent) are themost satisfied and committed and theleast interested in cash bonuses, daysoff and flexible scheduling. They lovetheir jobs and want to move up in theircompanies. They place high importanceon status awards and opportunities tomentor other employees and work withpeople outside their areas. These peoplefind a company that is a good fit andcommit to making it successful.

Providing the wrong recognition,reward or incentive might achieveunintended and undesired results,even facilitate resentment and de-moti-vate employees. Managers need to rec-ognize and reward people in ways thatare meaningful to them.

Recognition and incentive programsimprove when you provide a choice inreward options. Offering the right mixof rewards ensures all your people arepersonally motivated to higher perfor-mance. In fact, three out of four em-ployees prefer a choice of rewardsrather than a pre-selected item. Mean-ingless rewards and recognition isabout the same as nothing at all.

You need to know employee prefer-ences to facilitate the best ROI on invest-ments in recognition programs. LE

Mel Van Dyke is a consultant of Employee Engagement Practiceand Rick Garlick is Director of Consulting and Implementationat Maritz. Visit www.maritz.com or call 877-4 MARITZ.

ACTION: Offer a choice of rewards.

by B. Lynn Ware

tors that contribute to attrition, theirsolutions fall short of the mark.

3. Misguided thinking: “Attrition isinevitable.” Some attrition is unavoid-able, even desirable to compensate forhiring mistakes. However, HR andsenior line managers often questionwhether they can increase their reten-tion ratios. They can. In one organiza-tion, the attrition rate in one division,before our intervention, was 18.5 per-cent, with 25 percent attrition in onemission-critical group. After imple-menting proper retention strategiesand making retention a priority forevery manager, the attrition ratedropped to 11.7 percent overall, and 15percent in the critical group, althoughthere were reductions in employeecompensation during this time.

4. The manager’s role in attrition isparamount but underplayed. Mostmanagers lament the loss of talentedcontributors and point to variousexternal factors as the causes of attri-tion, failing to take any personalresponsibility. They rarely acknowl-edge any factors within their control.For example, managers often attributeattrition problems to compensation or

to corporate policies thatdilute employee autonomy.However, most factors con-tributing to attrition arewithin the manager’s circleof influence. For example,how frequently is theemployee appreciated fortheir contributions? Doemployees have a chancefor input on how toimprove results, and do

they feel that their opinion counts? Arethey making progress in their careeraspirations? Do they respect and valueother members on the team? As themanagers’ span of control has widens,each contact must influence employeecommitment to prevent defection.

5. Prevention is the best medicine.Since the loss of key employees can bedevastating, ask yourself how highlyyou rank retention as a priority. Mostmanagers only think about retentionwhen they receive a resignation. Thesolution lies in thinking about reten-tion as integral to sustainable success.Treating retention as a priority enablesyou to focus on proactive measures tonourish long-term employee commit-ment rather than on reactive attemptsto reverse surprise resignations. LE

B. Lynn Ware, Ph.D. is CEO of Integral Talent Systems. Emaildrware@itsinc.net or visit www.itsinc.net.

ACTION: Prevent your top talent from leaving.

TODAY THE CHALLENGEof sustaining a com-

petitive advantage pre-occupies the minds of many leaders.Customers have many providers tochoose from, and they often perceiveyour product as a commodity. How doyou distinguish yourself? Today, lead-ers depend on their top performers toinnovate and provide superior productsand services that differentiate the com-pany and get results for shareholders.

We addressed the attrition dilemmaby conducting research with 30 com-panies. Here are five key findings:

1. The costs of attrition can be stag-gering, but often hidden. Do you knowwhat it costs when you lose a top per-formers? Some costs factors are obvi-ous, such as the productivity losses.However, there are oftenunseen costs. One companyestimates it loses $150,000when an employee leaves.Another company calculatesthat attrition costs themannual productivity lossesof 65 to 75 percent in theposition the employeedeparts. Another estimates$1 million of potentially lostsales when one salespersonleaves. Multiply these costs by thenumber of employees who leave in ayear, and you see the impact is dramatic.

2. The reasons employees stay arenot the same as why they leave. Mostmanagers don’t know the real reasonswhy employees stay, or why theydepart. They may try to capture thecauses of attrition through exit inter-views, but these fail to differentiatebetween factors that make the new jobattractive, versus the reasons whyemployees consider leaving. Whenasked to diagnose the reasons for anemployee’s departure, most managersfail to take any responsibility. Theymay report “better compensation” asthe reason for leaving, even when theperson left for other reasons—like theabsence of career development. This isalso true when an employee is activelyrecruited by the competition. Whenmanagers misdiagnose the situationand fail to surface the most critical fac-

Retaining Top TalentHow much do you care?

PEOPLE RETENTION

1 8 L e a d e r s h i p E x c e l l e n c e

• Locus of dominant influence reflectsa leader’s tendency to be driven by aninternal or external perspective. Aninternal focus recognizes the ability toexecute but pushes strategy toward thetried and true. An external focus keysoff the plays of competitors and indus-try expectations. If one perspectivetends to dominate strategic thinking,the deleterious effects range from aseduction into products, services ortechnologies that are too far afield fromthe current brand equity or a tendencytoward incremental improvements.• Some leaders believe that strategy is

created; others believe it is selected—origination. Generic strategic positionsare described as technology leader or lowcost producer. Leaders who engage ininnovative thinking can define differen-tiating positioning that creates a tailored

value proposition or new market space.• Leaders vary in their tolerance for

risk and are often unaware how itaffects their strategic thinking. Risk-aversion and risk-seeking preferencestend to be personality-based, but aremoderated by the inputs they rely on.• Risk assessment identifies and ana-

lyzes strategic risk—omission and com-mission. Strategic risk is often viewedas abstract and gets short shrift.Identifying omission errors is a difficultundertaking because it is easy to cri-tique an idea but challenging to exam-ine the white space for “what else.”• Leaders differ in their emphasis on

the success drivers of growth and prof-itability. Many leaders are not clear onthe relative value of each to theirshareholders. Savvy leaders have aclear view of their financial driversand the blind spots associated with abias toward growth or profit.• Some strategists are great analysts

and idea people; others focus on exe-cution. If the desired end state is top ofthe mind as strategy is formulated, the

Strategic Thinking

MOST LEADERS RARELYreflect on their

thinking patterns andbiases and miss critical information thatis vital to their growth and profitability.

Great strategies result from rich andvaried viewpoints, facts, and instincts.Great strategists discern what is criti-cal, identify their preferences, under-stand their biases, and plan for blindspots. Insight into thinking prefer-ences, power, and politics provides aleader with a strong platform for strat-egy formulation and implementation.

One organization’s path of strategydevelopment demonstrates the powergained by moving beyond its comfort-able, predictable thinking patterns. Astaid consumer products organizationhad plateaued in revenue growth andprofitability. The company languishedfor years because it had little insightinto the thinking and assumptionsthat were driving its leaders. By chal-lenging long-held beliefs about whatpresaged company success, leadersdoubled revenue and reached unpar-alleled profitability—even during atime when its industry was flat.

NNiinnee DDiimmeennssiioonnssLeaders vary in their approach to

strategy along nine dimensions thatcomprise the strategic process: struc-ture, inclusion, locus of dominantinfluence, origination, risk tolerance,risk assessment, success drivers, mani-festation, and adaptation. Our StrategyPreference Indicator reflects thinkingpreferences in these dimensions. Adescription of possible dichotomies onthese dimensions provides a frame-work for how biases can be trans-formed into breakthrough thinking.• There’s an old debate as to whether

strategy is the idea, process, or plan. Theneed for structure varies from a formalplanning process to serendipity. Somesee strategic planning as a linear pro-cess that starts with planning and endswith execution. Other leaders assumethat strategy evolves on its own.• Inclusion in formulating strategy var-

ies from the CEO as sole strategist toseeking inputs from many constituents.

odds of manifestation (commercializa-tion of any strategic idea) is enhanced.• Organizations adapt over time

through orderly transformations or inresponse to revolutionary change. Someleaders prefer to put strategies intomotion and maintain them; othershypothesize shifts that threaten strategyand add change management muscle.

HHooww TThheessee IInnssiigghhttss AAdddd VVaalluueeFew leaders know where they fall

in their strategic thinking styles. Sincesuccessful strategy is multi-dimension-al, preferences reveal areas for explo-ration for missed potential.

The strategy odyssey of the con-sumer products company illustratesthe breakthroughs that are possiblewith a catalyst to challenge status-quothinking about strategy. The leader-ship team embarked on a new multi-year strategy formulation path thatstimulated the thinking of the seniorteam. Honest reflection enabled themto focus on what they did well, identi-fy the enabling structures, and planhow to capitalize on them in new ven-tures. Shared clarity was created—cru-cial as preferences differed vastly.

Since alignment had been lacking,employees had pursued areas that hadlimited commercial potential, stressedresources, and flamed fiefdoms. A planwas implemented to align information,budget and people resources. Once aconsistent view of the strategy wasreinforced, the attributes that oncesapped energy diminished greatly.

The leadership team reconciled theirdivergent comfort levels with riskrelated to investments and growth. Thesustainable growth level was modeledand consideration given to how andwhen to pursue acquisition or organicgrowth. The level of risk tolerance wasaffirmed by the Board and used to fillin missing components of strategy. Thenext-level management group wasincluded in visioning work on logicaladjacencies and untapped marketspace. New thinking enabled them toreach into new markets, distributionchannels, and technology. As a result,their execution effectiveness was mag-nified. Internal process improvementinitiatives were launched. A multi-faceted strategy emerged that pro-duced unparalleled profitable growth.

Your long-term success hinges on theability to explore strategy with curiosityand challenge long-held beliefs. LE

Susan Reece, Ph.D., is president of Dalton Spencer Consulting.Call 770-476-5583 or email reecesusany@aol.com.

ACTION: Optimize the power of strategic thinking.

by Susan Reece

L e a d e r s h i p E x c e l l e n c e 1 9

LEADERSHIP STRATEGY

L e a r n t o o p t i m i z e i t s p o w e r .

at the helm during the pivotal years.We eventually came to call theseremarkable people “Level 5 leaders,”referring to a five-level hierarchy.Level 1 relates to individual capability,Level 2 to team skills, Level 3 to man-agerial competence, and Level 4 toleadership as traditionally conceived.Level 5 leaders possess the skills oflevels 1 to 4 but also have an “extradimension”: a paradoxical blend ofpersonal humility and professionalwill. They are somewhat self-effacingindividuals who deflectadulation, yet resolve to dowhatever it takes to makethe company great, chan-neling their ego needs awayfrom themselves and intothe larger goal of building agreat company. It’s not thatLevel 5 leaders have no egoor self-interest. Indeed, theyare incredibly ambitious—but their ambition is first for the institu-tion and its greatness, not for themselves.

Preferring to be clock buildersrather than time tellers, Level 5 leadersare comfortable with the idea that theircompanies will tick on without them,reaching even greater heights. The factthat most people will not know thatthe roots of that success trace back tothem is not an overriding concern.

These leaders quietly go aboutbuilding greatness step by step, with-out much fanfare or hoopla, while gen-erating extraordinary results. Incontrast, some comparison CEOsbecame wealthy celebrities—covers ofmagazines, bestselling autobiographies,massive compensation packages—despite the fact that their long-termresults failed to measure up to theLevel 5s. In two-thirds of the compari-son companies, we noted the presenceof a gargantuan personal ego that con-tributed to the demise or continuedmediocrity of the company. These lead-ers were ambitious for themselves, andthey succeeded admirably on this score,but they failed utterly in the task of cre-ating an enduring great company.

LLooookkiinngg ffoorr LLeevveell 55 LLeeaaddeerrssBoards and succession planners

would do well to search for Level 5leadership—correlated with the best

Celebrity Leadership

VIRTUALLY EVERYTHINGour culture believes

about the type of lead-ership required to transform organiza-tions is wrong and dangerous. Thereis no more corrosive trend to thehealth of our organizations than therise of the celebrity CEO, the rock-starleader whose ambition is self-centric.

In 1996, my research team and Ibegan to wrestle with a simple ques-tion: Can a good company become agreat company and, if so, how? Weembarked on a five-year study toanswer this deceptively simple ques-tion, examining merely good perform-ers that had somehow transformedthemselves to achieve great results.

We uncovered several key require-ments and variables for turning agood company into a great one. Butthe most intriguing—and certainly themost surprising—is the type of leader-ship that turns good into great.

Consider Darwin E. Smith. In 1971,this seemingly ordinary man becamechief executive of Kimberly-Clark, acompany that for 100 years had beenmerely good, never great. A mediocreplayer in the middling paper industry,Kimberly-Clark returns to investorshad fallen 36 percent behind the gen-eral stock market over the past 20years. Over the next 20 years, Smithled a stunning turnabout, generatingreturns to investors that beat the gen-eral stock market by over four times!

Despite being a great CEO, DarwinSmith remains largely unknown. A shyand reserved man, Smith shunned anyattempt to shine the spotlight on him,preferring instead to direct attention tothe company and its people. Despitehis shy and self-effacing nature, whenit came time to make the big decisionsrequired to make the company great,he made them. In the end, Smith’sstoic resolve paid off. Kimberly-Clarkbecame the number one paper-basedconsumer products company.

LLeevveell 55 LLeeaaddeerrsshhiippEvery good-to-great company in

our study had a leader from theDarwin Smith school of management

and most enduring results. To do oth-erwise is to sacrifice long-term effec-tiveness for short-term expedience.

So, how should we go about identi-fying Level 5 leaders? The key is to stoplooking for outsized personalities andegocentric celebrities, and instead toscrutinize for results. Look inside whereextraordinary results are being pro-duced but where no person is standingup to take excessive credit for thoseresults. There you will likely find aLevel 5 leader. And if you feel you mustlook to the outside, then look for peoplewho show these four two-sided traits:• Creates—and is a clear catalyst in

creating—superb results. Yet demon-strates a compelling modesty, shunningpublic adulation and never boastful.• Demonstrates unwavering resolve

to do whatever must be done to pro-duce the best long-termresults, no matter how dif-ficult. Yet acts with quiet,calm determination andrelies on inspired stan-dards—not an inspiringpersonality—to motivate.• Sets the standard of

building an enduring greatorganization and settles fornothing less. Yet channels

ambition into the organization and itswork, setting up successors for evengreater success in the next generation.• Looks in the mirror to apportion

responsibility for poor results, neverblaming other people, external factors,or bad luck. Yet looks out the windowto apportion credit for the success ofthe company—to other people, exter-nal factors, and good luck.

Our problem is not a shortage ofLevel 5 leaders. They exist all aroundus. Level 5 leadership jumps out at usas soon as we change how we look atthe world and alter our assumptions.

Our misguided confusion of celebri-ty and leadership is neither right norhealthy. If we allow the celebritymodel of leadership to triumph, we’llsee the decline of our organizations.

Yet I remain optimistic. I sense anincreasing unease with celebrity lead-ers. Smart people see the dangers ofentrusting our future to self-servingleaders who use organizations toadvance their interests. The seed ofLevel 5 leadership is widely dispersed.It can be identified, cultivated, anddeveloped with encouragement andthe right tools, it can flourish. LE

Jim Collins is the best-selling author of Good to Great. Visitwww.jimcollins.com.

ACTION: Develop and promote Level 5 leaders.

by Jim Collins

2 0 L e a d e r s h i p E x c e l l e n c e

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