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Ana DutraLeadership Consultant

ExcellenceL E A D E R S H I P

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

MAY 2010

“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

Transition ExecutionTransition Execution

SuccessionSuccess

SuccessionSuccess

WiseWiseJudgmentJudgment

CollectiveCollectiveWisdomWisdom

ExcellenceL E A D E R S H I P

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

ALAN BRISKIN

Collective WisdomWhere has all the wisdomgone in organizations?. . . 3

RICHARD GODFREY

7 Laws of LearningGreat leaders are greatlearners and teachers . . . .4

NOEL TICHY ANDWARREN BENNIS

Wise JudgmentLeaders are known fortheir judgment calls . . . . . 5

EDWARD D. HESS

Are You Growing Too Fast?Learn lessons from the riseand fall of Toyota. . . . . . . .6

NIR KOSSOVSKY

Reputation LeadershipIt’s very valuable. . . . . . . .7

CHIP R. BELL ANDJOHN R. PATTERSON

Mad ScientistsThey’re hard to manage,but you need them inorder to innovate. . . . . . . .8

STEVE ARNESON

Bootstrap LeadershipPractice five ways to makeyourself a better leader. . . 9

JACK ZENGER ANDKATHLEEN STINNETT

Science and Artof CoachingAddress and answerfive questions. . . . . . . . . 10

ELAINE VARELAS

Dealing with Lay-OffsMost leaders would ratherhave a root canal than dealwith lay-offs. . . . . . . . . . .11

TERRY BARBER

Inspiration FactorIt separates the great fromthe good leaders . . . . . . .12

ALAN E. NELSON

Young LeadersWe can start developingleaders at young ages . . .13

ANA DUTRA ANDJOE GRIESEDIECK

Succession SuccessTake action now to developfuture leaders. . . . . . . . . . 14

VIJAY GOVINDARAJANAND CHRIS TRIMBLE

Innovation InitiativeThe great idea is justthe beginning. . . . . . . . . .15

JACK AND SUZY WELCH

Unforgiving Times

Stop talking about risk andstart taking actions. . . . . .16

DAVID BRAINER

Now What?Take five actions torecover from recession. . 17

PRISCILLA NELSONAND ED COHEN

Rebuilding TrustRenew from your core values on up. . . . . . . . . . .18

JOHN C. MAXWELL

Leadership SuccessPractice making meaning-ful connections. . . . . . . . .19

JOSEPH GRENNY

Virtual TeamsLearn how to have vitalconversations and crucialconfrontations . . . . . . . . .20

VOL. 27 NO. 5 MAY 2010

Virtual Teammates

When dealing with diverse mates who operate in different modes, one from the country withfeed corn and raw nuts and the other from the city with refined cuisine, learn from Aesop’s

fable and toast to each his own, or vive le difference!

HISTORY IS RIFE WITH STORIESof rises and falls. Few

leaders can sustain successfor a decade in office, let alone a manage-ment career of 30 years. Fewer yet pass thebusiness (or leadership baton) to a secondgeneration (50 years), and then to third gen-erations (80 years). Rare is the enterprisethat lives to be 100. Exceptional is the orga-nization that survives 200 years.

Why? Some leaders now deride the JimCollins’ premise of Built to Last, opting forthe Built to Sell mindset and boasting of theirability to gain fast wealth with strategiesthat call for impressive short-termgrowth on investment or acquisitionsteroids—and then cashing outbefore the house of cards crumbles.

Even most well-intended leaderswho seek to sustain success are oftendiverted, distracted, bought out,bailed out, beat up, or beat out. AsBoomers are learning, aging isn’t forsissies. Time tests the mind, will, andheart. Succession is key to sustainedsuccess, and wisdom rules the roost andwins the day (decade, century, millennium).

So, in the monthly pages and in the 25-year (quarter-century) article archive ofLeadership Excellence (LE), we continue toserve the collective wisdom of the bestminds on management and leadership.

What does it cost? What is it worth?When I’m asked “What does LE cost?” Ialways rephrase the question: “What is itworth?” We promise and guarantee expo-nential ROI in the timely application oftimeless principles. I challenge you withthis issue: open the May magazines to anypage, read the article(s), and do the actionitem(s). My bet is that you’ll then think thatLeadership Excellence is worth its weight in gold.

SSeelllliinngg SSoolluuttiioonnss,, RReeaappiinngg VVaalluueeI was once asked by an IRS agent, “What

exactly is the nature of your business?”I replied, “We work for you in the sense

that we sell solutions to managers and lead-ers who must attain desired results to sus-tain their success (thus pay more taxes).”

More accurately, I could have said, “Wesell great ideas that require some degree ofproactivity on the part of the reader to con-vert to solutions that are worth millions.”

And we make it easy to convert ideas tosolutions by prompting you to put excellencein action now—right after reading an article.

How can you benefit the most from yourmodest investment in Excellence? Start withthe Guides—the Personal Excellence Plan andthe Leadership Excellence Guide. These popu-lar tools have been used by many thousandsof people over the past 15 years to orientthem first in a development mode. Then usethe Application Tools and Templates to facili-tate the capture of the content and theapplication of ideas to your challenges.

For example, if you face challenges withlearning, growth, innovation, reputation,inspiration, coaching, trust, communication(among other issues), you will find solu-

tions in this edition of LeadershipExcellence—and the worth of thosesolutions will be exponential com-pared to your investment—if yougo beyond passive perusal and getinto active, disciplined, team-basedapplications that align with yourbusiness plan and people develop-ment plan. The proof is in theputting of Excellence in Action.

CCoommiinngg AAttttrraaccttiioonnssStay attuned to Leadership Excellence this

year to see our expanded Best in LeadershipDevelopment rankings and best practitionersin LD listings. Also, this year, we plan to pro-duce a 25-year CD archive of 4,500 articles.

MMaakkee SSeennssee ooff IItt AAllllAfter a recent presentation at a leader-

ship conference, I was asked by the LDdirector of a large company, “Could youplease make sense of all the stuff that is outthere on leadership and leadership develop-ment? I mean, who are the top thoughtleaders, what are their latest messages,what are the best books, who are the bestinternal practitioners and program direc-tors, what are the best programs, and whatare the best practices? Fortunately, I didn’thave to answer his question then and therebecause I had already addressed andanswered all these questions here, in thepages of LE, particular in our October 2009and March 2010 issues. If you did notreceive these recent issues, email me atKens@eep.com and I’ll send them to you. LE

O n l y t h e w i s e c a n s u s t a i n s u c c e s s .

by Ken Shelton

Volume 27 Issue 5

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Worth of Wise LeadersE . D . I . T . O . R ’ S N . O . T . E

2 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

Editor since 1984

LE Guide

endeavor but one that is collective in nature.Too often our focus on leaders obscuresthis reality. Nearly 2,000 years ago, theRoman Emperor Marcus Aureliuswrote of his leadership as nurtured bya constellation of teachers. From histutor, he learned not to take sides pre-maturely in partisan affairs and toendure difficulties. From other teachers,he learned not to become excited by“trifling things,” to discipline his mindas a path to true freedom, and to under-stand how his character was in need ofrehabilitation and care. For Aurelius, thedanger was always in feeling satisfiedwith moral generalizations, trite exhor-tations, and glorified prophecies. Howtimely is his wisdom and how missingis such reflection in our leaders today.

In his personal reflections, Aureliusmused that we are all connected and

that what is common in us derivesfrom a greater whole. He postulatedthat the Cosmos is a kind of city-state,a single community in which the“whole of mankind belongs.” He wrotethese reflections in the midst of war,turmoil, and the uncertain fate of hisempire. Yet, he wrote them with con-viction that we owe all our individualpowers of reason and lawgiving to thiscollective awareness and through thisawareness our fates are linked.

This is what wisdom, and collectivewisdom, has to offer us. We each have astake in each other and what binds ustogether can be greater than what dri-ves us apart. The great myth that wis-dom is not developable is shattered by agreater awareness that wisdom can bedeveloped through disciplined reflection,dialogue with others about what mattersmost, and through consideration of a higherpurpose to our daily tasks. The falsenotion that wisdom is not practical in

Collective Wisdom

PETER SENGE WRITES INthe foreword of our

book, The Power of Collect-ive Wisdom: And the Trap of CollectiveFolly: “Few words have a longer his-torical association with leadershipthan wisdom, and few words have lesscredibility in that association today.”

What has happened to account forsuch a discrepancy? And, what doesthe concept of wisdom offer today in anetworked world driven by speed,time pressures, and fierce competition?

By definition, wisdom is associatedwith accumulated learning but is dis-tinguished by qualities of reverenceand respect for life. Wisdom facilitatesgreater meaning regarding the valueof life. It is considerate of multiple per-spectives and forms of intelligence,including intuition, emotion, and spiri-tual awareness. It balances short termwith the long term—seeing longer-term consequences in present actions.

At a collective level, wisdom holdsthe key to redefining our organizationsand communities because it takes intoaccount the whole system and the fit-ness of the system to sustain life andprosperity. Wisdom in groups reflectsa capacity for sound judgment, dis-cernment, and the objectivity to seewhat is needed. So, how has wisdombecome so distant in its relationship toleadership? Why the loss of credibility?

The answer lies in contemporaryrealities. In the collapse of Enron andthe unraveling of many Bernie Madoff-type scandals, we’re reminded that thesmartest guys in the room are not nec-essarily ethical, the most powerful canbe the most self-interested, and thesystems that support such profitableschemes are short-term structures thathold the seeds of economic catastro-phe. From compromised food safety totoxic chemicals in products, to theslow poisoning of our oceans, to thepuncturing of the biosphere that holdstogether the envelope of life, we haveevery reason to withdraw our faith inleadership and to doubt that leadershave the answers we need.

This may be the good news becauseleadership was never really an individual

the high-speed and short-term chase tobeat out competitors is an unnecessarydistraction. The economic and practicalbenefits of quality products that do notharm the environment or endanger oursafety are becoming the differentiatingelement of today’s commerce. Cisco’sre-branding of its products and ser-vices to “constantly strive to be ‘Best inthe World’ and ‘Best for the World’” isbut one example of this transition.

Leaders can’t be mechanical gover-nors controlling the engine speed of atrain that is headed off the tracks. Norare leaders helpless cogs in a machinetoo complex and out of control for anyindividual to matter. Leaders are one,albeit critical, element in a collectiveprocess. They serve the collective bestwhen they express the higher aspira-tions of the group. Leaders now have astake in understanding the relationshipof collective activity and wisdom.

WWhhyy CCoolllleeccttiivvee WWiissddoomm MMaatttteerrssCollective wisdom has great func-

tional value for three key reasons:First, it bridges the past and future by

being concerned with the present—thehere and now of group decision making.Leaders must know what makes theirorganization unique—their brand, iden-tity, story—as well as how their organi-zation will be viable in the future. In hisdocumentary on National Parks, KenBurns chronicles the role of TeddyRoosevelt who saw the need to protectpublic lands so they wouldn’t be com-mercially exploited. In doing so, hehad to withstand the attacks of thosewho saw an immediate commercialreward in development or believedthat the free market should have noconstraints. The collective reward forhis wisdom is shared by the millions ofpeople who visit National Parks andfurthered by those creating open spacein their communities, giving publicaccess to nature, wilderness, and beauty.

Second, collective wisdom isn’t aboutgetting things done through command-and-control leadership but through cre-ative pairs, small groups, and networksof people committed to core beliefs. In anetworked world, nothing works mech-anically from the top down but ratherthrough virtual space, multiple conver-sations among distributed groups, andshared purpose. Margaret Mead’s com-ment that “a small group of thought-ful, committed citizens can change theworld,” has even greater meaningtoday in the age of multiple social tech-nologies. Let us disabuse ourselves ofthe lone genius hypothesis in which theindividual acting alone comes up with

by Alan Briskin

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 3

LEADERSHIP WISDOM

I t s h o u l d r e s i d e i n l e a d e r s .

the solution. We will be far more influ-enced by what physicist and an author-ity on the science of networks, Albert-Laszlo Barabasi, calls the fitness qualitiesof intersections in a networked environment.“Some people have a knack for turningeach random encounter into a lastingsocial link. Some companies make aloyal partner out of every consumer.”Fitness requires collaboration in orderto create an experience of WOW for theclient or to mesh competing needs andagendas into a coherent whole. Leadersserve the collective, both their internalmembers and their customers, by creat-ing the conditions for collaboration.

Third, wisdom is about results. Weoften associate wisdom with process—how people feel about their interactions,the mechanics of holding a dialoguesession, proper facilitation of conflict,or the orchestration of a good meeting.These are key considerations. Wisdomcan’t be sustained without genuinecuriosity, deep listening, and examiningmental models. Wisdom is an emergentquality that is more likely when thereis safety for reflection and considera-tion of our needs for respect, dignity,and a regard for each other’s talents.Yet, wisdom also plays a role in creat-ing sustainable results, actions that trans-late to visible outcomes, better products andservices, and more creative ways of manag-ing our resources. Leaders who cultivatecollective wisdom must show howtheir efforts are worth the investmentof time and resources. The rewards,however, are great because we can gar-ner concrete achievements and becausethe growth and development of groupmembers are explicit in such transfor-mational leadership. In such groups,everyone can emerge as a leader.

Wise leadership is cultivated throughreflection, inquiry, appreciation, dia-logue, and a positive regard for a high-er moral standard. It is elevated byworking on real problems in the worldand achieving visible results. We rein-force wisdom’s functional value eachtime we can actually point to collectiveaccomplishments and note the humanconnections and creative solutions thatemerged from behind the scenes. Themarriage of wisdom and leadership isthe differentiating skill we need in anetworked world, allowing some orga-nizations to thrive while others willsimply move from folly to folly. LE

Alan Briskin, co-founder of the Collective Wisdom Initiative, isa consultant and author of The Stirring of Soul in theWorkplace and coauthor of Bringing Your Soul to Work, DailyMiracles, and The Power of Collective Wisdom. Emailalan@alanbriskin.com.

ACTION: Cultivate collective wisdom.

by Richard Godfrey

vations, interactions, and experiencesthat are rich with learning and teach-ing material. We can Learn by WanderingAround. Any environment—a factory,office, schoolroom, nature—is filled,for the attendant observer, with thingsto first learn and then to teach.

Law 3: You learn by connecting. Weare metaphorical, not literal beings. Welearn and remember best when we con-nect to life through parables, metaphors,examples, and comparisons. Too manyleaders, believing we are literal learn-ers, think a barrage of data or facts inthe form of documents, slides, andspeeches will persuade us to engage. Awell-told story with a clear connectionto a challenge or opportunity alwaysworks better than a bevy of information.

Law 4: We all learn differently. Earlyin my teaching career I learned aboutVARK (Visual, Auditory, Reading-assist-ed and Kinesthetic learners). Unawarethat people learn differently, many lea-ders assume that how they learn worksfor everyone and then project their learn-ing style through their communication. Bylearning how people learn and accom-modating various styles, you connectwith more people in a meaningful way.

Law 5: Connections comethrough storytelling. In allsocieties, there’s a chief,priest, healer, and story-teller. Before the writtenword, a society’s knowl-edge base was conveyedthrough stories. We engagewith stories. Hence, learn-ing to tell great stories is keyto engaging the people you lead.

Law 6: Learning is bothan emotional and intellectual experience.Emotional connection to the teacher ortopic opens a door to the mind. Failureto open the emotional door means thatinformation, no matter how well crafted,bounces off the door with little impact.

Law 7: Learning can change lives. Bypracticing Laws 1-6, you can gain accessto the minds, passions, and souls ofpeople. In making such connections,guided by the light of ethics and morali-ty, you can change lives, lift people,and impact organizations. Teaching isa sacred calling with serious responsibili-ties and wonderful opportunities forthose who become able teachers.

By incorporating these laws intoyour leadership, you can teach peoplethrough change rather than simplymotivating, persuading or pushing—toa more engaged and lasting success. LE

Richard Godfrey is author of 7 Laws of Learning. Email rlgod-freyis@yahoo.com or visit www.galileoinitiative.com.

ACTION: Be a leader-teacher.

WHEN THOMASCarlisle wrote

“knowledge is power,”he couldn’t have known the damagethat single statement would produce.

After 30 years in business, I nevercease to be amazed at the low level oflearning, discourse, and change thataccompanies most learning experiences.Many leaders remain convinced that ifinformation/knowledge is cleverlyconveyed, it will produce an intendedchange in performance and productivity.

The fatal flaw in Carlisle’s argumentlies in free will. To experience a presen-tation of information is to confrontknowledge. That knowledge createsawareness, not power. What happenswith that awareness lies at the root offlawed assumptions about education,behavior, and outcomes. In-dividuals and groups regu-larly confront knowledgethat they choose to ignoreand demean, continuing intheir current behavior. Con-versely, knowledge— includ-ing what is neglected byothers—is regularly takenup and taken in where itstimulates re-thinking andnew behavior with thedesired changes in results.

The real question lies not in decid-ing how to push data but in how to getpeople to experience new ideas anduse their free will to get onboard.

Great leaders teach new ideas inways that not only engage people butpersuade them to use their free will forchange. To lead people to a better place,you must engage with them as learnersand learn how to teach as well as you lead.Here are seven laws or principles thatturn knowledge sharing into growth:

Law 1: We are all born to learn. Wemust first believe that everyone wantsto learn and then understand the resis-tance—history, approach, ego, frustra-tion—and welcome that person, in his orher own way, into a learning experience.

Law 2: You never know when learningwill occur. As Sherlock Holmes said toDr. Watson, “You see but you don’tobserve.” We are surrounded by meta-phor, examples, conversations, obser-

7 Laws of LearningGreat leaders are great teachers.

CAPABILITY LEARNING

4 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

Despite these reassurances, Hacketttold his managers to look into it further.He only heard rationales for inaction:fire codes vary; nobody could say howmuch fire-retardant would be enough;and some managers wondered if thepanels would ever be used in floor-to-ceiling walls. Still, Hackett felt that ifSteelcase’s standard of unyieldingintegrity were to mean anything, hehad to recall the panels and replacethem with ones that met stricter firecodes. Implementing the decision wasexpensive: Steelcase took a $40 millionwrite-off, and Hackett and his teamlost their annual performance bonuses.

Years later, however, Hackett’s deci-sion was vindicated. One of Steelcase’scustomers for the surface panel wasthe Department of Defense. Panelswith the added fire retardant material

were installed in the perimeter walls ofthe Pentagon, and a section of themwere destroyed on 9/11. After theattack, the Pentagon reviewed all build-ing materials. “If the new Steelcasematerial was not there, the fire wouldhave spread in a far more disastrousoutcome,” Hackett says. Character andcourage are the bedrock of good judg-ment, and Jim Hackett displayed both.

When you ask people to list the baddecisions they’ve made in their lives,many of them will confess, “I knew inmy gut what I should do, but I didn’tdo it.” Having a set of standards or val-ues isn’t enough. Even character isn’tenough. Having the courage to act onyour standards is part of what it takesto exercise good judgment. All leadersmake thousands of judgment calls, andthe importance of these calls is magni-fied by the impact on the lives of others.

TThhrreeee PPhhaasseessFor a leader, the moment of making

Wise Judgment

LEADERS MAKE MANY JUDGMENT CALLSthat impact customers, employees,

suppliers, and other stakeholders—andsome calls can make or break the firm.

Great leaders are celebrated for theirjudgment. What is good judgment, andhow can you sustain it? It’s not a matterof intellect, but of character and courage.

Character provides the moral com-pass—it tells you what you must do.Then courage produces results, ensur-ing that you follow through on thedecision you make. Without characterand courage, you can’t clear the highbar that is wise judgment. Withoutcharacter and courage, you’ll falter onthe difficult and important questions.

For example, Jim Hackett, CEO ofSteelcase, the office furniture compa-ny, has spent much of his career think-ing about what it means to be avalues-based leader. He started think-ing this way, he says, after a meetingwith Bill Marriott. Hackett was 39and had become president of Steelcaseonly six months earlier. Marriott wasthen in his seventies and had run theMarriott hotel empire for decades.Their conversation focused on values.Marriott encouraged Hackett to builda reputation of unyielding integrity. Afew weeks later, Hackett told his man-agement team: We need to ask ourselves,“How are we going to act when we get introuble.” Ten years later, Hackett wasfaced with a tough call. Steelcase wasselling a new line of panels that couldbe used either for waist-high office cu-bicles or to cover floor-to-ceiling walls.Building managers liked the product.

When Steelcase discovered that therules governing fire standards for floor-to-ceiling walls were stricter than thosefor cubicles, and the product might notbe up to the higher standards, someinsiders tried to ignore it. “We had nothad one damaged installation,” Hackettrecalls. “Our customers even called usand said ‘Oh, don’t worry about it—no one will ever have a problem.’”

the call comes in the middle of a process.Good judgment isn’t about luck, com-mon sense, or gut instinct—it is morelike a drama with plotlines, characters,and unforeseen twists and turns. Thatprocess begins with the leader recog-nizing the need for a judgment andcontinues through successful execution.

1. Preparation: Wise leaders pick upon signals and cut through complexityto get to the essence of an issue. Theyidentify key stakeholders, and engageand energize them. They set clearparameters, provide a context, create ashared language, and tap strong ideasfrom anywhere to formulate the call.They sense the situation, properly frameand name the issue, and identify the needfor a decision. The source of wise judg-ments is information that is relevant,meaningful, and timely. Four forms ofintelligence are key: self-intelligence, orawareness of your values and aspira-tions; social-network intelligence, such asgetting valid data from your directreports; organizational knowledge, orknowing how people will respond,adapt, and execute; and contextualintelligence, or knowing the territory.

2. Call: A good leader makes a clearyes or no call and then explains the callto stakeholders. There is no waffling.You don’t walk away from a call. Whatyou do in making the decision determineswhether it’ll be the right choice.

3. Execution: Once the judgment callis made, good leaders stay involved inthe execution. They support otherswho are involved and set clear mile-stones, ask for feedback, listen, andmakes necessary adjustments. Theythen align and mobilize the right stake-holders around a decision. In the execu-tion phase, you make it happen andcontinue to make adjustments as yougo along. Good leaders are not afraidof these redo loops—the chance to goback and try again if a step wasskipped or handled poorly. They pin-point errors and allow for correction,greatly improving odds for success.

A leader’s success hinges on howwell he or she manages the process—notjust moments when decisions are made.

TThhrreeee DDoommaaiinnssThe most important calls reside in

one of three domains:1. Judgments about people. This domain

has the most potential for good or ill. Ifyou don’t make smart judgment callsabout the people on your team, or ifyou manage them poorly, you can’t seta sound direction and strategy, nor canyou effectively deal with crises. Themost critical attribute of any leader is

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 5

LEADERSHIP JUDGMENT

I t t a k e s c h a r a c t e r a n d c o u r a g e .

by Noel Tichy and Warren Bennis

the ability to make sound people judgments.For example, when A.G. Lafley tookover P&G, he discovered a leadershipproblem in its $8 billion baby-carebusiness. But then he made a mistake:he and another executive decided that38-year-old Deb Henretta (a marketingconsumer-oriented person) should runthe operation (dominated by engineers).His vice-chairmen couldn’t believe he’dmade that call without their involve-ment. He met with them the next day,and after the meeting, he said: “Verythoughtful input, thank you, but hereis why we’re going with Deb” (theredo loop). On the execution side, hesupported her every step of the way.

2. Judgments about strategy. If thecurrent strategy is not leading the teamto success, the leader must find a newpath. For example, when Jeff Immeltsucceeded Jack Welch at GE, he decid-ed it was time to transform the compa-ny into a technology growth company.He selected 10 key technologies andmade several acquisitions to executethis strategy. Immelt believes that mak-ing strategic judgment calls is how headds value. “Good execution and goodoperations aren’t enough to fix a busi-ness with a flawed strategy,” he said.

3. Judgments in time of crisis. WhenJim McNerney became CEO of Boeingin 2005, the company was in crisis. Hewas Boeing’s third chief executive in threeyears (two years earlier, Phil Condit hadbeen forced to resign the job as a resultof alleged ethical violations, and formerBoeing president, Harry Stonecipher,had been called back to the CEO post,only to be edged out after revelationsof a liaison with a female Boeing exec-utive, prompting a Justice Dept. inves-tigation. Boeing’s senior ranks weredemoralized, and employees werefrustrated. McNerney had watchedevents unfold from his seat on theboard. He was aware that the crisisrepresented a watershed in his leader-ship. In response, he agreed to a $615million settlement that enabled thecompany to avoid criminal chargesand admission of wrongdoing. Hecould have fought the allegations andblamed former leaders. Instead, hemade a judgment that turned the crisisinto an opportunity to build a robustethics and compliance program.

When you make critical judgmentcalls about people, strategy and crisis,explain your rationale. LE

Noel Tichy is Director of the Global Leadership Partnershipand Professor of Management and Organizations, Universityof Michigan Ross School of Business. Tichy and Warren G.Bennis adapted this article from their book Judgment: HowWinning Leaders Make Great Calls (Portfolio).

ACTION: Exercise character and courage in calls.

by Edward D. Hess

ducts for faster, cheaper production.Hence, the quality began to decline.

Not only did Toyota products suf-fer, but its ability to fix those problemssuffered. We see just how true that isthrough the conflicting reports fromcompany executives over what is caus-ing the gas pedal problems and reportsindicating communication issuesbetween Japan and its U.S. andEuropean operations. Bottom line: Thecompany outgrew its quality controlsand diluted its processes for effectivelyresponding to customer complaints.

Leaders should assess the risks ofgrowth using a Growth Risks Auditbefore undertaking a major growth ini-tiative and develop a plan to managethose risks. Since managing risksrequires a different mindset from man-aging growth, leaders need to deviseearly warning systems to alert them topotential problems.

With Toyota, the cumulative effectof many small changes created bigconsequences. In the heat of growthand the battle to be Number 1, no onecould pull the cord and stop theToyota line. Being the biggest is a dif-ferent goal from being the best in qual-

ity and dependability. Whenconflicts between speed,growth, and quality arise, noone wins in a be the biggestenvironment.

By studying 54 high-growth companies, I findthat CEOs with prior high-growth experiences acquirea healthy respect for the risksof growth and espouse the

(ironically named) gas pedal approach togrowth—letting up on the growthpedal to allow processes, controls, andpeople to catch up. A business, like anengine, can run at a red-line pace foronly so long. Many leaders strive forcontinuous high growth. But sustainedhigh growth is the exception. Few (10percent) companies are able to growabove industry or GDP averages forfive years or more.

Be realistic about growth—and knowthat it is a complex change process depen-dent on human behavior. Humans, likemarkets, are not efficient or rationalactors all the time. Growth can be good,and it can be bad. You can increase theprobability of a good outcome if youassess the risks of growth and proac-tively manage risks as you grow. Growfor the right reasons, and grow smart. LEEdward D. Hess is author of Smart Growth (Columbia BusinessSchool Publishing) and The Road to Organic Growth(McGraw-Hill) and is a professor at Darden Graduate Schoolof Business, University of Virginia. Visit www.EDHLTD.com.

ACTION: Engage in smart growth.

THE RECENT DELUGE OFrecalls has made it

clear: In its quest tobecome the biggest automaker, Toyotawandered off the path of building thehighest quality and most dependablecars. How did Toyota end up in itscurrent state—and what can we learn?

Toyota is having a very bad year. Inmonths, its reputation for quality anddependability and status as a respectedleader in the auto industry were zapped.Replacing those accolades were a recallof over eight million automobiles, over60 class action lawsuits filed againstthe company, and company presidentAkio Toyoda admitting that the com-pany may have grown too quickly.

What can leaders learn fromToyota’s problems? The answer: If youaren’t careful, you can growyour company to death.

Bigger is not always bet-ter. For decades, growth hasbeen a determining factorfor success—but growth canbe bad. It can create seriousbusiness risks that if notproperly managed can dilutea company’s brand anddestroy its value.

I debunk three big myths aboutgrowth: Myth 1: All growth is good.Myth 2: Bigger is always better. Myth3: All companies must grow or die.

Then I replace those myths with thethree Ps for proper growth: 1) Plan forgrowth; 2) Prioritize the processes and con-trols needed to accommodate the growth;and 3) Pace growth so as not to outstripcapabilities, processes, and controls.

Contrary to popular opinion, growthis not always good. Yet shareholdersdemand short-term growth, so that’swhat leaders deliver, even if what they’redoing is unsustainable in the long term.

Too much growth can stress culture,controls, processes, and people, even-tually destroying value and even lead-ing the company to grow and die.

Toyota changed strategy in 2002 whenit set out to be the largest automobile salescompany. To achieve that goal quickly,it had to open new plants globally, hiremany new employees, expand its out-sourcing suppliers, and design its pro-

Growing Too Fast?Learn lessons from Toyota’s fall.

PERFORMANCE GROWTH

6 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

problems. Both matters are being out-distanced by the myriad civil lawsuitsbeing filed for claims of personal injury,wrongful death, racketeering, and unfairbusiness practices. And insurers arepreparing to subrogate past auto acci-dent claims involving Toyota vehicles.

Equity costs to date are in the $25billion range. Pricing power impact sofar is 3 percent. Market share fell an-other 3 percent for the year, and January2010 sales fell 16 percent to their low-est level in a decade. Operating costsare difficult to estimate—it was in aneffort to control them that risk arose.Adding to future expected operatingcosts will be regulatory costs, possiblefines and penalties, litigation costs,insurance subrogation costs, and infe-rior vendor terms. Credit default swappricing is up 30 percent, foreshadow-

ing higher credit costs. All told, weestimate the reputational impact, so far,to be a $2 billion cost to earnings and a$25 billion cost to market cap for 2010.

A strategy that generates phenome-nal economic returns for seven years,only to create a situation in whicheverything is given back in one 12-month period, is not desirable. At atime when intangible assets represent 70percent of the value of public companies,leaders must develop and executestrategies that harness the power ofreputation to drive intangible assetvalue. Superior reputations pay offwith: pricing power, lower operatingcosts, greater earnings multiples, lowerbeta (stock price volatility), and lowercredit costs. When reputation is dam-aged, these benefits are lost. These lostbenefits will cost Toyota $2 billion this year.

Reputation is the collective impres-sion held by stakeholders of how acompany manages its intangible assets.The CEO, executive team, and boardhave the primary roles and responsi-

Reputation Leadership

LEADERS KNOW THATreputation matters

and that a good reputa-tion brings countless benefits; and yet,most leaders don’t appreciate fully thefinancial benefits of a good reputation,or the costs of a damaged one.

Since reputation-linked assets accountfor 70 percent of corporate value, devel-oping and leading a reputation man-agement initiative can yield highquantitative and qualitative returns,and mitigate extraordinary costs.

RReecceenntt CCaassee iinn PPooiinntt:: TTooyyoottaaHarmony, honor and a devotion to

quality characterized the Toyota MotorCompany’s philosophy for half a cen-tury. These values were memorializedin a 1962 pact between managementand labor that created a uniquely coop-erative workplace. Toyota’s team approachenabled them to reduce the costs ofdefects and waste in accordance withthe quality principles of W. EdwardsDeming. In 1965, Toyota won the Dem-ing Prize for quality. In 1992, Toyotarevised its credo to embrace reputa-tion-linked values such as honor,respect, safety, quality and innovation.

Fast-forward 10 years. In 2002,Toyota set a target to be the world’stop automotive manufacturer. With anaggressive goal that required 50 percentgrowth, market share trumped less-easily-measured intangible values such as honorand respect. This re-prioritization setup Toyota’s fateful 2006 decision tosideline quality concerns that mightadversely impact its growth strategy.

In early 2009, Toyota, the world’s#1 automobile manufacturer, began torecognize the costs of nine years ofreputation risk buildup arising fromcertain failed processes. Our CorporateReputation Index records an acute dropin early 2009, safety and quality issuessurfaced with increasing frequency.Stock price growth relative to marketpeers began to slow in late 2009, pre-saging its acute fall in early 2010. Thething about headline risks and reputa-tion perils is that they can snowball.In 2010, Toyota faces criminal andCongressional probes into its safety

bilities in that management process.Reputation management encompassesthe enterprise-wide management of sixintangible assets: 1) ensure an ethicalwork environment; 2) drive innova-tion; 3) assure quality; 4) uphold safe-ty; 5) promote sustainability; and 6)provide security. These six reputation-al assets interact with one another in arelationship resembling a Roman arch,where a process failure of any oneintangible asset can result in a precipi-tous loss of value, and can even placethe enterprise in peril. Toyota’s 1992credo incorporates three of the six.

Leadership means fostering confor-mance with intangible asset manage-ment best practices. It means using thelatest tools—IT systems, employmentincentives, and insurance instruments—to shape behavior. Indeed, it was afailure of leadership and a lapse inmanaging the key intangible asset ofethics in 2006, motivated by a metric-driven obsession to outperformGeneral Motors, that brought down73-year-old Toyota’s Roman arch ofreputation in less than four years.

FFiigghhtt MMeettrriiccss wwiitthh MMeettrriiccssIn the face of demands for measur-

able performance indicators, mostexecutives may feel that they lack thetools to affirm the value of risk andreputation management. Many mayhave a clear vision of an integrated rep-utation management solution, yet lackthe resources to implement it.

In a business culture that manageswhat it can measure, we affirm that thevalue of intangible assets can be measured.As the Toyota case illustrates, intangi-ble asset management affects pricingpower, and both operating and capitalcosts. Our Corporate Reputation Indextracks reputation by capturing marketmeasures of pricing, net income, earn-ings expectations, and uncertainty, andthen reporting near-real time on repu-tation at the enterprise level.

Directors are likely to be held per-sonally liable for money damages ifthey breach their duty of oversight,including management of intangibleassets and risk. As a reputation leader,your mission intangible is to createenterprise value by understanding thebusiness processes on which your rep-utation depends, protect them, prac-tice them wisely, and communicateyour mastery to your stakeholders. LE

Nir Kossovsky is CEO of Steel City Re and executive secretaryof Intangible Asset Finance Society (IAFS). He is the author ofMission Intangible: Managing Risk and Reputation to CreateEnterprise Value (Intangible Asset Finance Society withTrafford Publishing, 2010). Visit www.steelcityre.com.

ACTION: Practice risk and reputation management.

by Nir Kossovsky

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 7

ETHICS REPUTATION

I t ’ s m o r e v a l u a b l e t h a n y o u m a y t h i n k .

or talk with HR. Failing to be valuedfor their contribution, most exit forgreener pastures. Consider the massiveloss to the organizations they vacate.

Organizations interested in growthneed a few mad scientists. They can makeus better and more vigorous. Sure, theyare complex, challenging, and difficult.But, they can propel us to greatness bybeing the sparkplug for the innovationengine. Of course they can make uswring our hands and shake our head.They can also insure our advancement.They are rare, and we need them.

Being a mad scientist can be lonely.And, being the leader of amad scientist can be nerveracking. As the boss, youare perpetually surprisedby events that signal yourmad scientist has “done itagain!” Other employeesare in your office complain-ing about their quirky actions,rude business etiquette, andinsensitive cross examina-tions. You wonder if the practical returnis worth the emotional cost.

FFiivvee WWaayyss ttoo LLeeaadd MMaadd SScciieennttiissttssTo maximize the value of your mad

scientists without losing them to com-petitors or resorting to pricy personalitytransplants, lead them in five ways:

1. Embrace their weirdness. Don’t tryto explain why mad scientists are the waythey are. You can’t reprogram eccen-tricity or turn off a compelling vision.Searching for a rational explanation fortheir idiosyncrasies implies that if theycan be understood they can be “cured.”The goal is not to change them but toeffectively lead them in order to har-ness their creative energies. Accepttheir treasures and steer their talents.

2. Provide loose control and tightguidance. Since mad scientists live in thebig picture world, they must be given anaccurate view at the macro level but notmicro-managed. They can be successfullyled but are poorly managed. External con-trols trigger their aversion to restrictionsand constraints. They do not deal wellwith mindless policies, narrow jobdescriptions, and obsessive controlsthat seek to convert them from “wildducks” to barnyard chickens. Theywork nontraditional hours, guidedmore by the rhythm of their work than

Mad Scientiststhe hands of the clock. However, theyneed hard and fast boundaries regard-ing where an overstep risks the mis-sion. Without governors, mad scientistscan be a clear and present danger.

3. Run interference for them. Mad sci-entists need sponsors and championswith gladiator-like traits to take on nay-sayers and the frustrated mob. Theyneed someone who always has a “getout of jail free” card—a defender whocan explain their contribution in a waythat makes defending their foibles un-necessary. They need a scout shrewdenough in corporate politics to providethem early warning regarding interper-sonal mine fields and lurking ambush-es. Without a front team, mad scientistsare marginalized and rendered impotent.

4. Resource them. Mad scientists needmore latitude and a higher tolerancefor their errors. They may present 12

approaches, 11 of which arewacky, but the 12th genius.Discarding the first 11before reviewing all theirideas risks missing break-throughs. Give them thelatest tools and access tothe best minds. They needa network of like-minded“scientists” (one of HenryFord’s best friends was

Thomas Edison). They need an easyentrée to information and access to acadre of people who can help themrefine their “perfect” idea into an effec-tive application.

5. Celebrate them. Mad scientists needlittle public affirmation—but they dowant credit. Seeing a lesser being getthe prize they earned draws sharp dis-approval. But, applause and attaboysothers may cherish are not what drivethem—the intrinsic give-back of theirwork is enough. However, celebrationcan help others learn to value theircontribution. Celebration enables fel-low employees to separate the personfrom the performance. It can fostertheir resilience and facilitate other’spatience. And, if their presence becomesintolerable and no skunk works-likeoutlet is available, celebrate them byhelping them migrate to organizationswhere their talents will be better used.

Effectively led, mavericks, eccentrics,rebels, and nonconformists can be cata-lysts for true greatness and make hugecontributions. However, like wild hors-es, they should never be domesticated.Well-behaved people seldom make history. LE

Chip R. Bell and John R. Patterson are customer loyalty con-sultants and authors of the best-selling book, Take Their BreathAway: How Imaginative Service Creates Devoted Customers.Visit www.taketheirbreathaway.com.

ACTION: Lead your mad scientists.

8 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

PERFORMANCE MANAGEMENT

Tr y l e a d i n g t h e m i n f i v e w a y s .

by Chip R. Bell and John R. Patterson

JAMES CAMERON IS A “MAD SCIENTIST”—and director of the two highest

grossing movies ever made—Titanicand Avatar. Apple CEO Steve Jobs isprobably a “mad scientist.” So wereLudwig Beethoven, Henry Ford andAmelia Earhart. Who could deny theirgigantic contributions or incredible gifts?

We use mad scientists not as a refer-ence to some evil maladjusted typelike Dr. Strangelove or Frankenstein,but rather as the catch-all phrase forthe gifted eccentric and unconvention-al wild ducks that occasionally enterorganizations. Some are nerdy, someare whiz kids without manners, andsome are amazing talents marching totheir own drum. For most organiza-tions they bring a mixed blessing.

All mad scientists have noble traits—brilliant, visionary, perfectionists, andpassionately driven. They’re also verychallenging to work with, extremelybull-headed, egotistical, countercultur-al, irreverent and sometimes border-line crazy. Organizations can’t toleratevery many mad scientists. They disturbthe sanctity of stability and status quo.Highly conservative organizationsview them as extreme misfits.

Mad scientists ask tough questionsthat make mediocre performers feelinadequate. They ignore tidy rules ofcorporate civility in a headlong pur-suit of their bold visions. They pokearound in areas outside their sandboxand beyond their pay grades. Whilethey would get an A in creativity, theirimpatience with diplomacy would netthem an F grade in emotional intelligence.

Some organizations expel all madscientists. Unless these eccentrics areprotected by being in the top slot—film director, CEO, or owner—theyget labeled, ignored, and ostracized.Their performance reviews give shortshrift to their vast achievements whilespotlighting only their “does not playwell with others” dimensions. Theyare told to get a coach or read a book

as a leader. Learn what others think ofyour skills and behaviors. Ask the peo-ple around you for input before youdecide what areas to work on. Howare they experiencing your leadership?What’s working for them? What’s notworking? How do they feel about yourability to guide the team in the rightdirection? What suggestions do yourcolleagues have for taking your skillsto the next level? If you sincerely solic-it and listen to their feedback, they’lltell you what you need to work on.Examine where you are today as aleader. Listen carefully to the input,and then reflect on your own leader-ship brand. Where can you get better?

2. Add something new to your game.Beyond leveraging your strengths andminimizing your weaknesses, youneed to continually add new elements

to your leadership toolkit. If you standstill, you are destined to stay at yourcurrent level or even fall behind. Doyou have a plan for adding new skills?In what areas do you need to focus?How about adding some skills incoaching, leading change, fosteringinnovation, broadening your peerleadership, becoming a great story-teller, or adding new time manage-ment skills? Think and reflect on ideasfor your skill development.

3. Get curious about the worldaround you. Now that you’ve addedsome new skills, it’s time to branch outand expand your horizons. Develop-ing yourself as a leader also meansstretching your point of view, and see-ing beyond the borders of your office(and company). How well are youstaying up with new developments?Do you have a firm grasp of yourorganization’s strategy? Do you knowwhat people do in other parts of thecompany? Do you know what your

Bootstrap Leadership

WE ARE LIVING INextraordinary

times. The world isbecoming more complicated, andwe’re becoming increasingly relianton leadership to make sense of all thecomplexities. Whether it’s the relent-less march of technology, global com-petitiveness, sustainability orinnovation, strong leadership hasnever been in greater demand. Ifyou’re a leader (at any level) today,you need to keep pace with this rateof change, continue to learn and grow,and take charge of your own develop-ment—or you’ll be left behind. If youdon’t take responsibility for yourdevelopment as a leader, who will?

All leaders have the potential toimprove, but you have to want to getbetter—and work at it—to become amore effective leader. Why? Perhapsthe most important reason is yourobligation as a people manager. As aleader, you can help your people growand develop so they can take theirskills and contribution to anotherlevel. But to positively impact others,you have to keep learning and grow-ing yourself. You have to model work-ing on your own development.

Fortunately, it is possible to get alittle better each day as a leader. If youput in the time, you can learn, prac-tice, and apply new skills consistently.With today’s pace of change, you can’twait for the organization to bringleadership training to you; you haveto work on your own game. You can’trely solely on your boss for coachingand mentoring; you need to takecharge of your own growth as aleader. You need a personalized learningstrategy and a customized plan of action.And you don’t need a big budget orelaborate infrastructure to developyourself. All you need is to seek andlisten to feedback and reflect on howyou can improve. You need to pullyourself up by your own bootstraps.

FFiivvee WWaayyss ttoo BBoooottssttrraappHere are five ways you can make

yourself a better leader:1. Find out how you’re showing up

competitors are doing? Are you learn-ing from organizations and culturesthat look nothing like yours? Wherecan you expand your network andbroaden your perspective.

4. Step out of your comfort zone.Once you expand your world viewand stretch the boundaries of yourleadership, it’s time to take some riskswith your development. How abouttaking a more proactive stance withyour boss about your next assignmentor role? What about joining a profes-sional network, or improving yourspeaking and presentation skills? Doyou have trouble admitting mistakes,or seeing things from another perspec-tive? Do you acknowledge that youdon’t know everything there is toknow about how your organizationworks, or how it makes money? Whatif you asked others to review yourteam’s strategy? You have a lot to gainby stepping outside your comfort zoneand adapting different leadership be-haviors. Pick the one thing that you’vealways avoided as a leader, and bringit inside your core set of skills.

5. It’s not about you. Leadership isabout the people you lead—it is notabout you. Is this how you look atleadership? Are you spending yourtime on the right big things—such aspeople development? Do you go outof your way to raise the profile of youremployees? Do you volunteer yourleadership skills to a nonprofit organi-zation? Do you offer feedback andcoaching to your direct reports andothers? Do you teach a class at the cor-porate university? That’s a great wayto “give away” your knowledge andexpertise. Finally, what is your plan forsuccession—how are you preparing theleader who will come behind you?These questions will help you makethe transition from it’s about me to it’sabout others.

Leadership is a privilege. If youmanage other people, you’ve beengiven a great gift—a chance to changepeople’s lives. To make a difference,however, you need to keep takingyour leadership skills to a new levelby taking control of your own learningagenda. Start by creating a customizedleadership development plan—one thatsays: “I care about becoming a betterleader.” It’s the right thing to do foryour leadership brand, and the rightthing to do for your team. LE

Steve Arneson is President, Arneson Leadership Consulting, aleadership coach, speaker, and the author of Bootstrap Leader-ship: 50 Ways to Break Out, Take Charge, and Move Up. Visitwww.arnesonleadership.com;steve@arnesonleadership.com.

ACTION: Develop your leadership skills this year.

by Steve Arneson

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 9

LEADERSHIP DEVELOPMENT

D e v e l o p y o u r o w n l e a d e r s h i p s k i l l s .

come to the first coaching discussionwith four selected topics. This sendsthree messages: you want coachees toparticipate in the process; you respecttheir wishes; and this is the start of along-term relationship designed to helpthem. Focus the coaching conversationmore on topics that are of interest to them.At times, you should suggest a topic.• Ask for feedback. When you open your-

self up to feedback, you’ll have bettercoaching discussions and be a bettercoach. The best leaders-as-coaches excelat providing feedback, and at askingfor it. When you ask for feedback, thecoaching relationship embod-ies the spirit of a collabora-tive, two-way conversation.

Question 3. How cancoaching be made more con-sistent? Provide leaderswith training and practice inapplying the process andskills necessary to facilitateeffective coaching conversa-tions. Ensure that the train-ing focuses on effective questioning andlistening skills designed to discover situ-ations from the coachees’ point of view.Also, provide managers with a clearstructure. This may be as simple as theFUEL formula: 1) Frame the discussion,explaining desired outcomes, confiden-tiality issues, and roles each personwill play; 2) Understand the currentstate, clarifying the situation as seen bythe person being coached; 3) Explorethe desired state—the coach helps theperson to think about what ideallywould occur from that person’s pointof view; and 4) Lay out a plan of actionand follow-up that will enable thecoachee to achieve the goal. Coachingimproves when the leader-coach fol-lows a clear framework, versus oper-ating in a free-wheeling approach.

Question 4. What’s the goal of coach-ing, and how much change can we expect?The coach tries to facilitate positive changein the coachee (positive change is definedby what the coachee wants to achieve,though it may also be defined by whatthe coach sees needing to be changed).In researching cases of drug and alco-hol addiction, James Prochaska and hiscolleagues concluded: change is rarely onegiant leap, but a series of five steps: 1. Pre-contemplation (I’ve not thought about it,or I’m not ready yet) 2. Contemplation

Science and Art of Coaching

(I’m ready to seriously consider somechange) 3. Preparation (I have a plan) 4.Action (I’m now ready to take action) 5.Maintenance (I’m willing to keep at it).The best coaches help people to movefrom one stage to the next. Each personshould have a personal development planand commit to it. Receiving help in cre-ating a plan helps move people fromStage 2 to 3. They then must take per-sonal responsibility to move from Stage3 to 4 and 5. As a coach, monitor thefrequent backward lapses, and create agreater sense of accountability to makepersonal change happen.

Question 5. What about the coaches’personality or behavior makes the mostpositive impact? William Miller andStephen Rollnick note that three keyelements create conditions for change:1) collaboration between the peopleinvolved; 2) the coach seeks ideas and

insights from those beinghelped; and 3) maintainingthe autonomy of the personbeing coached (the rightand capacity for self-devel-opment). Coaching willlikely fail if there is tensionor contention between theparties. Coaching is notsomething you do “to”someone, but is done

“with” the person. If the coach assumesa position of power or status and con-veys the message, I have the answers, andI’m going to teach you, there’ll be lesssuccess than if the coach seeks ideasand insights. Indeed, the greatest suc-cess comes when the client’s view ofcoaching issues, the potential solutionsand ideas about the best process forchange come together to form a theoryfor the client, and the coach uses theclient’s theory of change to assist theclient in making progress. The coachserves to reinforce the client’s theory forchange, apply experience to it, help tointerpret it, and use the client’s think-ing in place of the coach’s agenda.

Most of what people learn is absor-bed casually on the job, and yet little isdone to help people be more observantabout what takes place daily on the job,and to try new behaviors in daily work.Anticipate that the greatest gains willoccur within the first sessions of coach-ing on a topic; there’s usually a levelingoff in the change process on that topic.

Coaching contains many character-istics of an art form—it will never be apure science. LEJohn H. Zenger is CEO of Zenger/Folkman and author or co-author of seven books on leadership and teams. KathleenStinnett is a Senior Consultant with Zenger/Folkman. Call801-705-9375, email info@zfco.com, or visit www.zfco.com.

ACTION: Master the art of coaching.

1 0 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

LEADERSHIP COACH

Address and answer these f ive key quest ions .

by Jack Zenger and Kathleen Stinnett

INTEREST IN HELPING LEADERS TO BECOMEbetter coaches is high. People want

more coaching than they receive, andorganizations are trying to respond bytraining managers to be better coachesand using external coaches. What canwe do to insure our investment pays off?

The future of coaching may lie in ourability to answer five key questions:

Question 1. Does coaching really makea difference? When we study leaderswho are also effective coaches, we cansee clear correlations between leaders’coaching effectiveness and employeecommitment, engagement, and satis-faction. An increase in employee satis-faction typically leads to an increase incustomer satisfaction, which impactsthe bottom line. Also, we find thateffective coaching doubles employeeretention. The results produced by high-performing coaches correlate with:greater willingness to go the extra mile;more reports that the company is agood place to work; greater employeesatisfaction with decisions that impacttheir work; more feelings of being val-ued as an employee; double the num-ber of employees who are inspired toput forth greater effort every day; andincreased perception that managers aredoing a good job.

Question 2. How can we increasethe effectiveness of coaching sessions?

Coaches can take two actions: askthe client what he or she would like todiscuss; and ask the client for feedbackat the end of each session.• Focus the conversation. You, the coach,

should talk about things that are ofgreat interest and value to the coachee.If you feel that it is your right (or duty)to set the agenda in coaching conver-sations, you’ll talk about issues that areof concern to you or that you believewould be of value to the person beingcoached. To ensure that the conversa-tion is focused on topics important toyour direct reports, you might providea list of topics and request that they

Managers should avoid casting blameor making sideline deals. The leader-ship team needs to develop a clearmessage and present a united front.

5. Treat employees with respect. We’veall heard lay-off horror stories—peoplewho arrive at work to find boxes ontheir desk and security standing near-by; people who try to get into theiroffice and realize the locks have beenchanged; or people who were terminat-ed via a form email. Managers shouldtreat every individual with respect andprotect each person’s dignity. Even ifthe RIF affects many people, managersshould treat each person as if he or sheis the only person being affected. Eachemployee deserves a private meetingwith a manager, a chance to ask ques-tions, and be informed of any transi-tion support, verbally and in writing.

Deliver the news with kindness andcompassion, remembering that the lay-off has a compounding effect on family.

6. Offer as much support as possible.Provide people with transition support.Here are five examples: 1) Redeployment:Is there another area of the companyor another location that can absorbsome of those affected? Can trainingbe offered to fill a need in anotherarea? 2) Separation package: Even if thecutbacks are fiscally based, provide aseparation package that includesfinancial benefits, and career transitionsupport. 3) Reaching out to other employ-ers: Contact other employers to makethem aware of the staff affected. Dothey have open positions some of theemployees could fill? 4) Engage a careertransition firm with a proven record ofdelivering value to affected individu-als. They try to get those affected bythe RIF into the right roles in the besttimeframe. 5) Employment AssistanceProgram can help people deal with the

Dealing with Lay-Offs

MANY LEADERSwould rather

have a root canal thaneliminate jobs and lay off staff. Mostgo to great lengths to cut costs first tominimize the number of people affectedby a reduction in force (RIF). Everyone—employees being laid off, those staying,HR managers, and leaders—fares bet-ter when a RIF is handled skillfully.

Here are 10 strategies:1. Recognize it will be painful. RIFs

are upsetting for everyone. Leaders andHR managers should not be expectedto smile through it or “put lipstick ona pig.” Doing so might make light ofthe lay-off’s impact and belittle peo-ple’s feelings. Acknowledge that it ispainful for all employees—thosebeing let go, those who are staying,and for the HR managers who have toimplement the reduction. It is alsostressful on the organization, as peo-ple go through this difficult transition.

2. Remain objective. It can be easyto personalize a lay-off, but it’s notproductive. Managers should remainobjective when selecting positions toeliminate. They need to be mindful oftheir words when speaking about thereduction. People are not being cut—positions are cut, and people are affected.

3. Have a well-thought-out plan. Thelay-off must be well planned and exe-cuted. Address every detail. HR needsto help leaders ask probing questionsto determine how positions will beselected. If the downturn only affectsone area, will that department be theonly one to face cuts, or will the entirecompany face restructuring? Whatwill the criteria be for position elimi-nation? Will it be last in, first out? Willit be performance-based? Has informa-tion been documented? Consult withlegal counsel to know legal risks andimplications of every activity involvedin the RIF. Consider what talent, skills,and experience will be needed in thefuture. What teams need developmentto expand or refine needed skill sets?

4. Come to a consensus. Whateverthe reasons for the lay-off, the man-agement team needs to come to agree-ment and move forward as a team.

separation and move on. The organi-zation benefits from having logisticalsupport when many people are beingasked to coordinate events. The indi-viduals notified benefit from having aperson to speak to who can addressthe impact of RIF.

7. Communicate clearly and honestly.Rumors are often more damaging thanreality. There is some information thatis confidential, and it changes dailyuntil the day of the reduction. And yetthe status of the company, its finances,and its future are pieces of informationeach employee should have. If man-agers don’t control the message, fearand rumor can rule the day, and nega-tively influence people’s behavior. Tellwhat the company is doing to avoideliminating positions, and remind peo-ple of assistance for those in transitionand support for those remaining.

8. Ensure resilience. Following a RIF,consider an alignment of structure,people, and process. Create plans formoving the business forward. Retentionand engagement of key talent becomesa priority, and managing change becomesthe focus. HR ensures resilience.

9. Look to the future. Focus on whatwill happen next. Are strategies, goals,and roles aligned? What will the newincarnation of the company look like?Is there a communication strategy tore-engage people? Does the cultureneed to be reinforced? How can lead-ers support employees in managingchange? The sooner you speak to thefuture, the sooner you can recover.

10. Re-recruit remaining staff. Be high-ly visible and engaged with employeecommunication. This is the time to re-recruit remaining employees by rein-forcing the support provided to thoseemployees affected, and reaffirmingthe organization’s commitment to cur-rent staff. Enlist the help of employeesso they can play a role in shaping thefuture. What are their hopes and con-cerns? What do they need to do theirjobs well? Reassure them of their placewith—and their value to—the organi-zation to avoid losing them.

HR professionals need to be expertsin conducting RIFs to ensure that thepeople affected are treated with respectand supported in making a smoothtransition. When leaders handle theprocess well, they can also reinforcetheir commitment to remaining staff,and communicate the mission so thatthe organization continues to thrive. LE

Elaine Varelas is managing partner at Camden Consulting Group,a career management firm, and serves on the board of CareerPartners International. Visit www.camdenconsulting.com.

ACTION: Deal effectively with lay-offs.

by Elaine Varelas

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 1 1

MANAGEMENT LAY-OFFS

L e a d e r s n e e d t o u s e 1 0 s t r a t e g i e s .

trial, and error, the inspiration factorproduces more positive transforma-tions than any other leadership trait.

I didn’t always know this. The firsttime I was asked to supervise people, Ispent much time motivating them. I’dread all the books, but I didn’t have aclue. So, to get them to achieve, Imanipulated them. Each morning, likea cheerleader, I would pump them up:“We are world-changers! We love ourteam!” Some would get enthused—fora while. But something was missing: Iwasn’t connecting to their dreams, soresults were minimal, at best.

So I changed tactics. “Live up to yourpotential—or you’ll answer to me!” or“Produce! Perform—or I’ll find some-one who will.” I threatened them withdire consequences for failing to mea-

sure up, but it didn’t work. In fact, itreminds me of the motivation my dadused on me. His belt motivated me toobedience, temporarily, but I wasn’tinspired. Neither was my team.

To put a student-mentoring programon 30 high school campuses in Houston,I needed my team to perform at peaklevel, but to have to pump them upwas exhausting. If you’ve ever had tosupervise a group of people, no mattertheir age or gender, you know the feel-ing. Why can’t they just charge aheadwith excellence—without all the excuses?

One young man, Ben, was challeng-ing for me. I’d decided that it was timefor a serious chat. But rather than blasthim for the things I thought he wasdoing wrong, I asked him two ques-tions: “How do you feel it’s going?” and“What first interested you in this job?”

“I feel disappointed at times,” hesaid. “I’m not good at speaking, and Iwas hoping to use this experience todevelop my public speaking skills.”

Inspiration Factor

WHAT IS A GOODsynonym for

inspiration? You mightsay stimulation or influence or encour-agement. But, the word that most oftencomes to mind is motivation.

But are motivation and inspiration thesame? As leaders, we all want certainthings from those who report to us. Sodo we motivate them to action, or dowe inspire them? Motivation providesan incentive to act a certain way—butfor reasons both self-sacrificing and self-serving. A person can even be motivat-ed out of fear, say, of a penalty—likewhen my dad used “corporal punish-ment” to “teach me a lesson.” Thatmotivated me, but I wasn’t a bit inspired.

According to Webster’s Dictionary,to inspire means to exert an exaltinginfluence—exalting meaning raisinghigh, as in character or power. Mostbooks and seminars focus on motiva-tion, encouraging the use of rewardsto prod employees toward better per-formance. Some staff may reach forthese dangling carrots—raises, promo-tions, various perks—but if yourmethodology stops at motivation, staffgrowth will be hit-or-miss. Not every-one can rise to the top, and even thosewho can, won’t do so in a stagnant cul-ture. Why? Because a few have beenmotivated, but no one’s been inspired.

Some leaders are better at motiva-tion than others, and some methodsare less than inspiring: they motivate,but through manipulation or threats.“If you don’t meet this goal . . .” Evenwhen positive results are attained thisway, they will be short-lived again,because people haven’t been inspired.

What actions make the differencebetween inspiring people and motivat-ing them? And what will that mean toyou, as a manager or leader?

Leaders who genuinely inspire oth-ers do so by tapping into people’sdreams—then extracting the best fromthem. This is what I call the “inspira-tion factor.” And whether these lead-ers just have a knack for inspiringthose around them, or they havedeveloped the skill through training,

The lights came on. I said, “So, if Ihelp you develop your ability to speakin public, you’d feel more fulfilled?”

“Absolutely!” Ben said.I never needed to have the second

part of that discussion. My experiencewith Ben was a defining moment forme. From that exchange, I gained threeinsights—and these will help you bemore effective at leading your team.

1. Work is only part of someone’slife. Most people have personal dreamsand ambitions beyond what you see atwork. By uncovering those aspirations,you gain a great opportunity to alignthem with your organizational goals.

2. Notice, name, and nurture is thename of the game. Many people havejust quit dreaming. They’ve settled intothe day-to-day routine of their job, nolonger considering their latent talentand desires. I encourage you as a teamleader to take the initiative and catchthem doing something with extreme passion,and affirm them for it. It’s one thing tosay, “Thanks for your hard work.” Butto say, “I notice you have an uncannyability” takes it to a new level. “Haveyou ever considered using what youknow here at work?” brings it home.The skill you notice may not fit withyour goals, but the positive charactertrait displayed in the skill is alwaysapplicable. Here’s another example: “Inotice you energize people and are agreat promoter. Have you ever consid-ered management?” This exercise forcesyou to notice the positive traits in yourteam, name them, and nurture them.

3. Teachable moments are all aroundyou. Although it’s more fun to rallyaround successes, you can learn thingsin the midst of conflict and adversity.John Wooden, the iconic coach at UCLAfor 27 years, saw the game of basket-ball as a mere object lesson for life, yethe retired with a record of 885–203.

“If you are not making mistakes,”he’d say to his players after a bad game,“then you’re not doing anything. I’mpositive that any doer makes manymistakes.”

Wooden’s words also relate to lifebeyond the court. The adversity you andyour team face are teaching moments, soturn your workplace into a teachingenvironment about things that are big-ger than what goes on between 8 and5. That’s a sure way to inspire!

By practicing these basic principlesof inspiration, you’ll move from moti-vating people to inspiring them. LE

Terry Barber is an inspirational speaker, corporate trainer, andauthor of The Inspiration Factor (Greenleaf Book Group Press).Visit www.inspirationblvd.com.

ACTION: Become a more inspiring leader.

by Terry Barber

1 2 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

PEOPLE INSPIRATION

H o w t o c h a n g e y o u r c u l t u r e .

passage to adulthood and/or moralmaturity take place around ages 12-13(bat mitzvah, bar mitzvah, Aboriginalwalk-about, catechism, confirmation).Metaphor: Planting the seed

Character: Character is fairly set bythe end of summer. So, this is the lastchance in a young leader’s life to con-centrate on character issues that willimpact their decision-making. Sinceleadership involves power and since aleader’s decisions influence many oth-ers, the temptation to misuse poweroften skews a person’s perspective.Pressures of leading create stress andreveal character flaws and ethical-moralweaknesses. Some suggest that who weare as a 4th grader predicts who we’ll be forlife. Emphasize character issues at home,in school and where preteens interact.

Competency: Cognitions elevate at age10. While still concrete thinkers, pre-teens (8 to 12-year olds) are transition-ing to conceptual thinking. The bestmethodology for teaching in this stageis active learning, where kids under-stand concepts by attaching them totangible experiences. The overlap of

cognitive development with moralmold-ability is what makes the 10 to13 window so critical. You can teachsophisticated social skills required forleading and yet still shape character.The combination of leadership skillsand character diffuses compartmental-ization (separating personal characterfrom professional character. Our train-ing curriculum (LeadNow) emphasizesthis season in a young leader’s life.

Fall: Ages 14-18. Strategies: Competencyand Confidence. Description: Teen years(adolescence) are times for discoveringindependence, moving toward peersfor identification, and awakening self-expression, sexuality, and responsibili-ty. Teens are less impressed withadults and more distracted by activi-ties. Metaphor: Cultivate the plant

Competency: Knowing how importantit is for teens to remain in school andlearn life skills, this remains a strongseason for developing leadership abili-ties. Because there is more mobility

Young Leaders

MOST PARTICIPANTSin executive

training programs areages 30 to 55. But by this stage in life,our character is pretty much set. Whatcan we do to identify and developleaders while they’re more pliable?

That has been my quest for the lastfive years as we’ve prototyped a train-ing curriculum for 10 to 13 year olds.We’re learning more about developingyoung leaders, ages 2 to 22. By target-ing life stages, we provide future lead-ers with a 10- to 20-year head start.

Four seasons emerge in a young lea-der’s life, each with strategies basedon the unique conditions of that time.

Spring: Ages 2 to 9. Strategies: Condit-ioning and Character. Description: Moraland cognitive development begin atage two, when children discover theirwill, learn right from wrong, and for-mulate speech and thoughts.

Metaphor: Till the soilConditioning: Adults need to help

young children discover their valueand uniqueness. Leadership aptitudecan be seen in early socializing, whenchildren begin interacting duringplaytime, creating informal structures.Certain kids influence peers more thanothers, positively or negatively. Therole of parents and teachers is to condi-tion young leaders by enabling them toexperiment with leading games, fami-ly chores, sports and school projects.

Character: Much of our character isformulated during this season, whenwe learn right and wrong, both frommodeling and behavioral consequences.Family structure and parental valuesare reflected in what children say andhow they act, alone and with peers.This is when moral training has itsmost enduring results, good or bad.The moral/ethical connection estab-lishes a framework from which a per-son makes decisions, whether to lie ortell the truth, steal or respect anotherperson’s property, honor or dishonoranother person, present or absent.

Summer: Ages 10-13. Strategies:Character and Competency. Description:Cognitions accelerate at age 10, butcharacter is still pliable. Most rites of

and access to leading opportunities,whether through work, student gov-ernment, community service projects,or leading younger kids, skill trainingcan include many practical applica-tions in real-world situations.

Confidence: Redundancy enhancesconfidence, so that a young leaderbecomes familiar with what it takes tolead a project. Hopefully, a youngleader by this season will have experi-enced “summer school” so that thenewness of being in leadership situa-tions wears off and confidence isheightened as the leader takes on moreand larger and more complex leader-ship scenarios. Mentoring and coach-ing increase at this point, so thatyoung leaders can see mistakes of pre-decessors and learn from failuresbefore the cost of failing increases.

Winter: Ages 19 to 22. Strategies:Confidence and Contacts. Description:College and/or early career opportu-nities depict this stage. Making adultdecisions regarding work, college, andtransitioning into independence markthis final season in a young leader’slife. Metaphor: Prepare for harvest

Confidence: As people gain experi-ence in leading, they tend also to gainconfidence. If competency was estab-lished in previous seasons, a youngleader now can experiment with theseskills in various settings, resulting inincreased confidence that is groundedin reality, not ideology. The goal in thisseason is to continue mentoring andgaining feedback so that they can pol-ish their ability and be ready for post-college opportunities as they come.

Contacts: Effective leaders use theirnetworks to gain vital resources (infor-mation, relationships, expertise, money,talent, or position). At his stage, thegoal should be to seek those who haveaccess to people and opportunities andcan open doors of opportunity whereconfident young leaders can establishthemselves quickly. A framework forestablishing these contacts could alsobenefit those seeking young leaders.

There is a time and season for every-thing. By developing leaders young,their adult lives can be perpetual fruit-bearing and harvesting. Since leadersare the primary makers of history, wemust learn how to develop leadersearlier and get to the root of their lead-ing, so that we can influence the influ-encers while they’re most pliable. LE

Alan E. Nelson, EdD is a young leader development specialist,founder of KidLead and creator of the Social Influence Surveythat assesses leadership aptitude in youth. He is the author ofKidLead: Growing Great Leaders. Visit www.kidlead.com.

ACTION: Participate in developing young leaders.

by Alan E. Nelson

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 1 3

LEADERSHIP YOUTH

O b s e r v e f o u r s e a s o n s .

tive succession be included in share-holder proposals to provide greatertransparency surrounding manage-ment succession risk. This initiativeshould cause more boards to focus notonly on CEO succession planning butalso on longer-term initiatives such astalent recruitment and development.

In a well-managed succession process,transitions can be seamless. For exam-ple, the transition from A.G. Lafley toRobert McDonald as CEO of Procter &Gamble went smoothly. The companyhad implemented a long-term systemof evaluation and planningfor the position, grantingexposure for McDonald tovarious markets and linesof business. P&G execu-tives kept their eye on theball during the transition.P&G maintains this prac-tice for all executive posi-tions. Hence, it maintains asteady hand when a newleader must be named.

GGeettttiinngg iitt RRiigghhttHere is how the best boards practice

CEO succession planning:1. Establish a succession committee.

While CEO succession is the responsi-bility of the entire Board, the planningis usually done by the Nominating andGovernance Committee (three or fourdirectors). Every year, the status of allinternal candidates should be reviewed,and succession discussed in the execu-tive session. While it is ultimately theboard’s responsibility to drive theprocess, having the CEO’s input withregard to internal candidates is impor-tant. If the board chairman is a non-executive director, that person alsoshould be on the committee. If not, theLead or Presiding Director should beincluded. One or more committee mem-bers should have experience in manag-ing a high-profile succession. Theboard should assess internal and exter-nal talent and identify the experienceand qualities needed in the next leader.

2. Review succession plans early andoften. Planning for succession shouldstart the day a new CEO is on the job.GE does this, as do Nokia and Novartis.These companies have longer-term CEOs.Because succession is done so rigorous-ly and is so ingrained in these cultures,

Succession SuccessCEO tenure and executive retention arehigh. By contrast, Coca-Cola experi-enced a revolving door of four CEOs in11 years after the sudden illness anddeath of Roberto Goizueta. While CEOcandidates aren’t eager to be comparedand benchmarked, they’ll accept it whenan objective process occurs consistently.

3. Identify your gaps. One positiveside-effect of succession planning isthat it can reveal gaps that need to befilled and weaknesses that must beaddressed. If, for example, there is alack of talent in the top layers, thefocus should be on identifying, devel-oping and retaining high-potentialpeople in middle management, thentapping the market for senior talent.However, if the issue is a general talentshortage, that isn’t just a successionproblem—it is a sign that something is

wrong in terms of organi-zation and leadershipdevelopment. In this case,the board needs to requirethe CEO to develop a com-prehensive and aggressivetalent management strategy.

4. Build a strong candi-date list. First, look at inter-nal candidates. Are theyprogressing as expected?Are they getting the right

experience? If an executive has excelledin one area, is it time to stretch thatperson by a transfer? Second, look out-side the company to check out compa-rable talent. The idea is to map andbenchmark the talent market: How doour people compare? Who might beavailable? Third, think the unthink-able. Who would be put in place in theevent of sudden need? Is anyone ready?

5. Know your strategy. Considerationof any candidate should start withboard agreement around the corporatestrategy. How does the company planto grow? What competitive, market andregulatory challenges might it face? Theanswers give the board insight into thekind of CEO needed. For example, acompany looking to do acquisitions aspart of its growth strategy wouldrequire a CEO who is a bold visionaryand a great integrator. But if the com-pany is refocusing on its core business,it will value an executive with deepexperience. In any case, what mayhave made executives successful in thepast is not necessarily what will equipthem to be effective leaders in the future.The key is to gauge candidates’ learn-ing agility and their ability to adapt,not rely solely on past performance.

6. Learn from new best practices asthey evolve. Boards should often do an

1 4 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

LEADERSHIP SUCCESSION

S t a r t p l a n n i n g y o u r n e x t C E O .

by Ana Dutra and Joe Griesedieck

WHEN KEN LEWIS ANNOUNCED THAThe’d step down as CEO of Bank

of America, he declared it was “timeto begin to transition to the next gener-ation of leadership.” There were twoproblems with this: there was no nextgeneration ready to step up; and Lewisshould have been executing the transi-tion, not beginning it. Through thisoversight, Bank of America opened thedoor to more scrutiny and criticism.

Boards should consider CEO succes-sion one of their key responsibilities;however, only about half of boardseven have a succession plan in place.Boards need to take tangible action toensure long-term stability. Successionplanning too often becomes at best anexercise in damage control, and at worstan unseemly scramble that can destroyshareholder value. Not only do investorsdislike uncertainty, but the lack of asuccession plan can put internal exec-utive talent at risk. It’s tough to retaintalent and build leadership when thereis no confidence in the process. Com-panies that don’t plan for CEO succes-sion leave themselves open to instability,personal agendas, internal politics,rumors and loss of peak performers.

When succession planning is treat-ed as a regular and structured processthat’s part of the board’s agenda, it be-comes a strategic process that’s intimate-ly related to performance and encom-passes all mission-critical positions.

BBeenneeffiittss iinn TTaakkiinngg AAccttiioonnA company with a succession process

that is objective, fair and transparentwill find it easier to attract and retaintop talent, execute strategy, and dis-cover weaknesses. There will be lessjockeying for position and more focuson the work to be done. CEO succes-sion should be an ongoing process,not a one-time event, starting well inadvance—three to four years—of theplanned leadership transition.

The SEC has proposed that execu-

rebel on a mission. It is a romancedeeply embedded in our culture.

The CEO’s mistake is buying intothe romance and assuming that themost difficult barriers were finding agreat idea and appointing a greatleader to make things happen. But thebiggest challenges are yet to come.

Ideas will only get you so far. Con-sider companies that have struggledeven after a competitor entered the mar-ket and made their great idea transpar-ent to all. Did Xerox stumble becausenobody at Xerox noticed that Canonhad introduced personal copiers? DidKodak fall behind because they wereblind to the rise of digital photography?Did Sears suffer a decline because theyhad no awareness of Wal-Mart’s every-day-low-price discount retailing format?

In these cases, the ideas were there,but follow-through was lacking. Wefind that innovation initiatives oftenface their stiffest resistance well afterthey show hints of success and start togrow. By then, they are consumingresources and clashing with the exist-ing organization at many levels.

If the problem at Xerox, Kodak, andSears was not a lack of good ideas, was

it a lack of capable leaders?Perhaps, but consider whatwe view as the First Law ofInnovation: innovation andongoing operations are alwaysand inevitably in conflict. So,asking one leader, even atalented one, to make inno-vation happen on theirown is to ask too much.

There may be a fewingenious, creative, and

determined souls who can overcomethe odds that face any innovation andan organization that fights them atevery turn, but they are rare.

Organizations are not designed forinnovation but for ongoing operations—to deliver consistent and reliableperformance. To build a capacity forinnovation, reexamine the structure.Relying solely on the heroic leadershipof a talented intrapreneur, even onewith a great idea, is a recipe for failure.

To move innovation initiatives for-ward, take six steps: 1) divide the labor,2) assemble the dedicated team, 3)manage the partnership, 4) formalizethe experiment, 5) break down thehypothesis, and 6) seek the truth. Withthis approach, innovation and opera-tions can thrive simultaneously. LE

Vijay Govindarajan and Chris Trimble are authors of The OtherSide of Innovation (HBR Press) and creators of a parable andworkshop. Email Greg@InsideInnovationWorkshop.com.

ACTION: Move your innovation initiative forward.

YOU ARE AN UP-AND-COMING LEADER.Recently the CEO asked you to take

charge of an ambitious innovation ini-tiative that will “lay the foundation fora brighter future.” You can’t say no (canyou?), but inside you have misgivings.You know the assignment has no guar-antee of success. Your previous assign-ments have been to accelerate growthin an existing business and to expanda proven offering. But this is different.

What follows is a sequence of eventsthat is familiar to us from our research.It’s a cautionary tale, one to considerbefore you accept the assignment.

A CEO announces that the strategicimperative for the year isorganic growth. There areno more attractive acquisi-tion targets out there. Tokeep up with Wall Streetexpectations, growth mustcome from within. It mustbe driven by innovation.

Experts on innovation arehired to inspire the troops,create the right conversa-tions, and get the creativejuices flowing. A committee reviewspreliminary ideas for new growth oppor-tunities. Dozens are submitted. A feware researched. Business plans are writ-ten, and one looks most promising.

The CEO examines the possibilityfrom every angle. Many projects arecompeting for capital, but none can re-invigorate growth like this one. The CEOhires an outside expert who confirmsthat the project looks like a winner. TheCEO commits to the plan and assignsthe best GM to lead the initiative.

And then the CEO makes a big mis-take by moving on to other matters. Theinnovation initiative, after all, is but atiny fraction of the overall enterprise.

Asked to imagine an innovationsuccess story, many people think first ofa creative, brilliant, and inspired soulthat sees the future in a different way.Then, the hero does whatever it takesto make the innovation work, fightingthe bureaucracy when necessary, like a

Innovation Initiative

CHANGE INNOVATIONexternal market calibration to researchbest practices in succession planningand evaluate their process as newideas and practices evolve. Honestscrutiny can have long-term benefits.Knowledge of what’s done well, andnot well, can be transferred to otherareas to create a merit-based organiza-tion that learns from its experience.

7. Evaluate the process often andmake changes when appropriate. Thesuccession process should stand up toexternal scrutiny. You might use anobjective third party to advise theboard, evaluate candidates, and learnto what extent stakeholders believethat the Board followed an objectiveand unbiased selection process.

Any succession process is only asgood as it is believed to be fair. Youmight use 360-degree assessments andsurveys to measure perceived fairness.

PPrroovveenn PPrraaccttiicceessSome proven practices can help boards

manage succession. We have identifiedbest-in-class profiles for major positions.These can then be tailored to specificsituations and used to compare anycandidate against competencies criticalfor success on the job and to assess can-didates against the company culture.

Our unique approach breaks man-agement style into four components:Leadership style refers to how a personacts in front of an audience, when try-ing to influence others, or in gatheringinput to make a decision. Is the personassertive and direct, intellectual orsocially oriented? Thinking style revealshow a person solves problems or makesdecisions. Are they creative, data-dri-ven, or both? Emotional style is aboutthe ability to perform with others, andnavigate through difficulties. Is theirempathy apparent? Do they exhibittolerance of ambiguity? Are they will-ing to take risks? Career motives revealwhat drives a leader: is that person alearner, entrepreneur or expert? Howdo the person’s motivations fit the cul-ture or strategy execution requirements?

All leaders have capabilities andprofiles in all four areas; however, dif-ferent components within each styletake on greater or lesser prominencedepending on the condition of the com-pany and what the CEO needs to do.

CEO succession planning continuesto be a key Board responsibility. Andwith heightened scrutiny, boards needto be planning for their next CEO. LE

Ana Dutra is CEO, Leadership and Talent Consulting andExecutive VP, Korn/Ferry International. Call 312-526-0541,email linda.dziubala@kornferry.com or visit www.kornferry.com.

ACTION: Improve your leadership succession.

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 1 5

by Vijay Govindarajan and Chris Trimble

The idea is just the beginning.

often means survival. Moreover, whenyou’re letting people go with one hand,doling out checks to worthy causeswith the other is hard to rationalize.The decision for managers is how todistribute a smaller pot. You can sprin-kle the money evenly, giving a littlemoney to a lot of causes, or you canprune your list and give more to fewerorganizations. Neither choice is bad,but we favor the latter only because ittends to have a greater impact.

As for community activities, contin-ue to encourage employees to stayinvolved, helping out withtransportation and schedul-ing allowances. But alsounderstand when employ-ees recoil from commit-ments to volunteer. It’s onlyhuman to concentrate onyour job when you feelyour job might be vulnera-ble. And then there’s CSRas a strategy. When gascosts over $4 a gallon, ahybrid Toyota Prius is an attractivevalue proposition. With gas under $3,not so much. When most consumershave good, secure jobs, expecting themto pay more for an enviro-friendlyproduct makes sense. With bankaccounts drained, it’s a tough sell.

Our point: The bar for strategic CSRis higher than ever. Consumers are in-creasingly unable (or unwilling) to paymore for something simply because itmakes them feel good inside. Today, ithas to make them feel good in the wal-let, too. That doesn’t mean the era ofsocially responsible products is over. Itjust means increasingly intense costpressures—and any manager whoignores that fact is ignoring an oncom-ing locomotive of competition. CSRbelongs in every company. But everycompany must face reality. You have tomake money first to give it away.

DDiiggnniittyy MMaakkeess tthhee DDiiffffeerreenncceeIn everything you do as a leader,

value dignity. Business is full of dilem-mas and tough calls. You can try tosolve them by going on gut instinct.You can do nothing and hope for thebest. You can cover your rear end byplaying politics. Or you can make yourchoices based on the indisputable tenetthat people deserve to have their voic-

Unforgiving Timeses heard and self-respect preserved.

Dignity is not only the right thing todo from a moral perspective, it makescompanies more competitive. It’s awin-win every time. For example, man-agers should explain the comings andgoings of key employees. Withoutdemonizing anyone, they can explainwhy Joe was asked to move on or whyMary was transferred. It can be a per-fect teaching moment. Such candorgives people the tools to control theirown destiny. They know which behav-iors are rewarded and which aren’t,enabling them to adjust, if need be, andplan accordingly. It gives them agency.

As for managing people doing bor-ing work, again, if you start in a dignitymindset, the solution becomes clear. Asa leader, you need to infuse people withexcitement and meaning—no matter how

mundane the work. Celebratesmall victories and mile-stones, and reward employ-ees who outperform. Andgive your people voice, too.Hold brainstorming ses-sions regularly, and makepublic heroes out of thepeople who come up withprocess improvements. Tobe a leader is to energizeand engage your people—

to fill them with pride for what they do.The Dead Man Walking boss is all-

too-common, as companies cut costs.Yes, sometimes purges are necessary toremove incompetent managers, but justas often they usher out good people whojust haven’t performed well enough.

In such cases, it’s only human to keepyour distance from the person whosejob is gone. You don’t want to be associ-ated with a goner, or you don’t knowwhat to say. It’s awkward. So you hun-ker down in your office or ingratiateyourself with your boss’s boss. Instead,try starting a conversation and makingeye contact. Your compassion will keepthe team running better, and your decen-cy will be a testament to your character.

Business principles are useless if theydon’t help companies win. Fortunately,voice and dignity do just that. When itcomes to people, no matter the ques-tion, they’re part of the answer.

HHooww NNoott ttoo SSuucccceeeeddIn government and in business, we

see many examples of ineffective lead-ership—of how not to build confidenceand motivate people. These teach usthree lessons on how not to succeed:• First, business leaders gain nothing

by showing uncertainty and indecision.Every leader grapples with a monster

1 6 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

LEADERSHIP ACTION

Stop talking about the risk of failure, start taking action.

by Jack and Suzy Welch

IN THIS ENLIGHTENED AGE, COMPANIESmust be socially responsible. But

tough economic conditions underscorea blunt reality. A company’s foremostresponsibility is to do well. That maysound politically incorrect, but the rea-son is inexorable. Winning companiescreate jobs, pay taxes, and strengthenthe economy. They enable socialresponsibility. And so, now—asalways—leaders should put profitabil-ity first. It’s the necessity that makesall other necessities possible.

We’re not suggesting that compa-nies abandon philanthropy and othercharitable initiatives until the sky isblue again. We’re only saying that cor-porate social responsibility (CSR)needs to adapt to the circumstances.Leaders need to pin down, for them-selves and their employees, CSR’splace among the company’s priorities.

CSR comes in three different forms.Companies can contribute to societywith cash or products, giving awaygrants, goods, or their services toschools, homeless shelters, hospitals,and the like. Second, companies canfocus their CSR on community in-volvement, by supporting employeeswho mentor students or volunteer fora myriad of causes. And third, compa-nies can put CSR into their productand service strategies, focusing ongreen initiatives, for instance, or factor-ing environmental concerns into theirmanufacturing processes.

When the tide is high, many com-panies practice all three forms of CSRto some degree—and they should. It’sthe right thing to do, and CSR can play apowerful part in recruiting talent, re-taining talent, and keeping up morale.

But how should leaders think aboutCSR now, with margins narrowing,layoffs rampant, and consumersembracing the new frugality? The con-tribution of cash and goods most like-ly has to decrease. In troubled times,cash flow is critical and delivering it

the downturn accentuated structuralproblems. Hence, everything should beunder the microscope: customers andgeographic markets served, productand service portfolios, general andadministrative structures, and supplychains. In our survey of 600 executives,74 percent indicate that they are focus-ing on structural costs—on everythingfrom business model restructuring tooptimizing supply chain networks andimplementing a more focused invest-ment strategy. Market dynamics areforcing leaders to reset their profitmodels and be more nimble and agile.

4. Plan for smart growth. It’s not allabout defense. While 28 percent ofexecutives are focused on turning thebusiness around, 27 percent say thatthey are aggressively solidifying theirmarket position and taking advantageof weaker competitors. And with capi-tal becoming more available, leadersare finding access to the resources theyneed to fund growth. But don’t viewthis as a return to old ways. Examinegrowth opportunities through the lensof risk and return. Choose smart options,pursuing actions in pricing and prod-uct line extensions to deliver predictable

growth. If you can’t benefitfrom external funding, youcan redirect existing fund-ing to achieve predictableand reliable growth.

5. Take a scenario plan-ning approach. Uncertaintyis the new normal. Predictingthe timing and strength ofthe upturn and developingan effective strategicresponse presents a big

challenge. Scenario planning preparesthe management team for whatever isaround the corner, helps them see theimplications of a range of scenariosand response triggers, and prepares theteam to make the important decisions.Consider putting scenario planning atthe core of your recovery strategy.

Think about what your organizationwould look like in an ideal world—if notfor all the twists and turns, politicalbattles, and outside forces that haveleft their marks—and begin to reshapethe business as it should be. You can’tleave the future to chance. So, get outof the reactive mode and rekindle yourstrategy. Ask the hard questions.Hammer out a plan that considers allthe options and can actually be imple-mented. And start making it happen.LE

David Brainer is principal of Deloitte Consulting. Visitwww.deloitte.com.

ACTION: Take a proactive path to growth.

THE ECONOMY IS IM-proving, but you’re

not out of the woods yet.How will you lead your organizationto meet the new economic reality, wherevolatility is business as usual? The signspoint to a lumpy and bumpy recoverymarked by unpredictability. Measuredgains followed by unexpected setbackssignal perilous times for leaders. If youmade the tough calls that helped yousurvive so far, nice work. But the worstcan still happen, especially if you’renot addressing the problems that thedownturn exposed—or the new ones itis leaving in its wake.

The recovery will be gradual andfragile, highly variable by industryand geography, and play out in stages.Are you prepared? Move beyond reac-tionary maneuvering into aproactive mode, targeting thechanges that will have alasting impact.

TTaakkee FFiivvee AAccttiioonnssTake these five actions:1. Understand your new

reality. You likely sufferedblows in the downturn.Where exactly is the dam-age? Where are yourstrengths today? Where does yourcompany stand today in relation towhere it wants to go? What about yourindustry and competitors? Where willgrowth come from? Where must youmake tough choices? Get specific.Analyze your approach to the down-turn. What has worked? What hasn’t?Has your company been good or justlucky? A brutally honest assessment ofhow you got here will serve you wellas you move on to other challenges.

2. Preserve the gains. You haven’tmade it this far without making majorchanges where it matters most. You’velikely achieved new discipline andresponsiveness, becoming cash-focused,cost-disciplined, and action-oriented.Today your business is likely lean andmean. Avoid letting it become flabbyagain. Make cost and cash disciplinethe new norm. Enter the upturn with akiller instinct and competitive advantage.

3. Tackle structural costs. For many,

Now What?Take a proactive path.

by David Brainer

PERFORMANCE FINANCIALof a challenge at some point. In such apredicament, he feels unsure of direc-tion and overwhelmed by complexity.That’s only normal. What’s should notbe normal is taking those feelings pub-lic. As a leader, your job is to steer andinspire. When a difficulty arises, youneed to huddle with trusted advisersand wrestle the challenge to the ground.Probe it. Debate it. Work it over. Andwhen you’ve gone as far as you canwith the available information, formu-late the best plan to move forward.

Only then should you speak out andcommunicate as a leader, with the mes-sage: “Here’s what we’re going to doand why. Here’s what’s in it for you, andhere’s what we’ll look like when we getto the other side.” Such an approach isnot hiding anything. Your people knowthe situation; they need you to do yourjob, by finding the solution, explainingit, and energizing everyone to execute it.• Second, business leaders undermine

success by talking about the risk of fail-ure. When Katie Couric asked Chesley“Sully” Sullenberger III, the pilot wholanded Flight 1549 in the Hudson River,if he was afraid at any point of “notmaking it,” Sullenberger replied: “No,I knew I could do it.” Obviously, heknew the enormous risk of a waterlanding. And yet he showed the bestleadership by putting himself in a can-do mindset. Leaders know that anystrategy holds the risk of failure. Butwhy talk about it? You’re only practic-ing CYA management by harping on thechances things won’t work out. Equivo-cating enervates everyone. Your teamwon’t give its all if it senses you’re pre-pared to say, “Well, I told you it mightnot work out.” They know they can’twin unless the leader believes they can.• Third, business leaders can’t indulge

bureaucratic data dumpers. Yes, part ofa leader’s job is to act as a soundingboard for direct reports. But to buildleadership in your ranks, don’t let yourmanagers bring you PowerPoint slidesdescribing their problems in bone-crushing detail. Demand that they sortthrough the data with their team anddeliver a decision with their rationalefor it in clear terms.

If your managers are paralyzed byinformation, options, and obstacles,you can be sure their people are con-fused and demoralized. And the onlyway to break that cycle is by not toler-ating leaders who obfuscate with datato avoid taking action. LE

Jack and Suzy Welch are coauthors of a Business Week columnfrom which this article was adapted. Visit www.welchway.com.

ACTION: Take necessary actions to succeed.

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 1 7

13. Teamwork: Easily adapts to beinga team player; encourages teamwork.

14. Work/life balance: Balances timespent at work with other dimensionsof family, community, and social life.

Many leaders have breached theircore values due to personal greed or alack of courage. That’s why we believecourage should be added, defined andreinforced as a core value:

Courage: This value entails standingup and speaking for what you believeis right, even when it is the minorityview; taking calculated risks; learningfrom mistakes; and speak-ing the truth, even to thoseabove in the hierarchy.According to Ira Chaleff,“Lack of courage by thoseserving senior leaders hascontributed to the downfallof many once-powerfulleaders. The price organiza-tions pay for lacking thecourage and skill toaddress dysfunctionalbehavior by leaders is high. You can’thave a participatory workplace if thetough issues get swept under the rugand are only discussed cynicallybehind the backs of the group’s lead-ers.” This underscores the essence ofcourage as a key core value; everyone,not just leaders, is responsible for theorganization’s behaviors and out-comes. As a leader, you need to sup-port those who speak up. This createsa culture where everyone is willing totake ownership and enhances loyalty.

Core values represent the essence ofwho you are and how you behave.Standing by core values in tough timesis the best way for leaders to demon-strate their character. In The GulagArchipelago, Alexander Solzhenitsynwrites: “In keeping silent about evil, inburying it so deep within us that nosign of it appears on the surface, weare implanting it, and it will rise up athousandfold in the future. When weneither punish nor reproach evildoers,we are ripping the foundations of jus-tice from beneath new generations.”Be willing to have difficult conversa-tions, make difficult decisions, and donot tolerate, under any circumstances,a lack of alignment with core values.Quickly ask people (especially leaders)who make such compromises to leave.

Rebuilding TrustRReebbuuiillddiinngg TTrruusstt

Mahatma Gandhi wrote, “In theattitude of silence, the soul finds thepath in a clearer light, and what is elu-sive and deceptive resolves itself intocrystal clearness. Our life is a long andarduous quest after truth.”

When core values are breached, trustis damaged. If not quickly rebuilt, dis-trust becomes a part of the culture. Thelonger you go without rebuilding trust,the greater the chances of embeddingdistrust deeply in the culture. In Hindi,we find the saying, Truth alone triumphs.If you are transparent and speak thetruth at all times, then trust is renew-able every day. If you have built atrusting relationship with people, theywill give you the benefit of the doubtwhen trouble comes. And of coursetrust, or the lack of it, is a basic under-

lying reality for all effortsto revisit your core purposeand values. Trust can andmust be continuously rebuilt.

Here’s how to build trust:• Practice inclusive leader-

ship: acknowledge contri-butions, cultivate strongrelationships, conduct skip-level meetings (conversewith those who do notreport directly to you) to

enhance approachability, and empha-size collaborative decision making.• Choose not to collude in the blame

game—end rumors before they start.• Help the displaced find new positions.• Learn to detect and call out deception.• Sanitize or eliminate the leaders who

caused the turbulence (if intentional)or have seriously broken the trust.• Reinforce or launch core values.• Hold everyone accountable to clean

up the mess and move forward.• Close communication gaps.• Provide safe ways for people to

express themselves. Overcommunicate.• Conduct a trust-indexing exercise (a

one-minute survey asking employeesabout the trust level of their leaders).• Reward honesty, even when it

results in negative business outcomes.• Explain difficult decisions.• Quickly finalize arrangements for

those who must be asked to leave, pro-viding special care and sensitivity, asthey can either help or harm your brand.

Trust is damaged when core valuesare violated. Without trust, your cul-ture will carry a norm of skepticismtoward all leaders. LEPriscilla Nelson is CEO and Ed Cohen is Executive VP atNelson Cohen Global Consulting and co-authors of Riding theTiger: Leading Through Learning in Turbulent Times. Visitwww.ridingthetiger.com.

ACTION: Rebuild trust in your team.

1 8 M a y 2 0 1 0 L e a d e r s h i p E x c e l l e n c e

ETHICS TRUST

R e n e w f r o m c o r e v a l u e s u p .

by Priscilla Nelson and Ed Cohen

WHEN YOU ENCOUNTER STRONG TUR-bulence, you should revisit your

core values and then adjust, commu-nicate, and reinforce them. For mostleaders, today’s turbulence stems fromthe global recession; but others maybe dealing with rapid growth, merg-ers and acquisitions, reorganization,internal corruption, or other changes.

We invite you to review your corevalues and decide what to keep, whatto change, and what to add, ensuringthat each value is clearly articulatedand the boundaries of behavior arewell defined. We’ve identified 14 corevalues that are vital for all leaders:

1. Conviction: Conveys sincerity andconfidence in beliefs and decisions; will-ing to make and stand by decisions.

2. Diversity: Values different per-spectives; builds multifaceted, diverseteams; seeks to understand what dri-ves and motivates individuals.

3. Entrepreneurship: Recognizesopportunities and organizes resourcesto maximize them.

4. Excellence: Strives for excellence,not perfection; recognizes that excel-lence may vary from country to coun-try, depending on the local context.

5. Fairness: Makes decisions thatare fair, consistent, and equitable.

6. Humility: Acts in the knowledgethat you are no better or more impor-tant than others.

7. Integrity: Demonstrates honestyand makes ethical decisions.

8. Passion: Leads by example;shows high energy and enthusiasm.

9. Perseverance: Shows resolve inmoving along the path, with a strongwill and the drive to accomplish.

10. A positive attitude: Maintains apositive attitude; represents decisionsand policies in a positive manner.

11. Respect: Treats everyone with di-gnity and shows high regard for oth-ers, regardless of their station in life.

12. Service oriented: Provides extra-ordinary, extra-mile assistance to all.

others—one-on-one, in groups, andwith an audience—your relationshipsare stronger, your sense of communityimproves, your ability to create team-work increases, your influence increas-es, and your productivity skyrockets.

Connecting is the ability to identifywith people and relate to them in a waythat increases your influence with them.And the ability to communicate andconnect with others is a major deter-mining factor in reaching your poten-tial. To be successful, you must workwith others. And to do that at yourabsolute best, you must learn to connect.

How much healthier would yourrelationships be if you excelled at con-necting? How would your marriageand family life improve? How muchbetter would you be at work when thenumber one criteria for advancement

and promotion is an ability to commu-nicate effectively. Connecting betterwould change your life!

CCoonnnneeccttiinngg IIss CCrruucciiaall ffoorr LLeeaaddeerrssTo be more productive and influen-

tial, become a better leader. Everythingrises and falls on leadership. The best lea-ders are always excellent connectors.

Consider the differences in connect-ing skill between Ronald Reagan andJimmy Carter when they ran againstone another. In their final debate onOctober 28, 1980, Carter came acrosscold and impersonal. To every questionhe was asked, Carter responded withfacts and figures. Walter Cronkite des-cribed Carter as humorless. Dan Rathercalled Carter stoic and disengaged. Andas Carter made a case to be reelected,he seemed to bounce back and forthbetween trying to impress people bystating cold facts and trying to makehis listeners feel sympathy for him andthe burden of his job. At one point, he

Leadership Success

WE ARE BOMBARDEDwith 35,000 mes-

sages a day. Everywherewe go, someone is trying to get ourattention. Every politician, advertiser,journalist, family member, andacquaintance has something to say tous. Every day we are faced with e-mails, text messages, billboards, tele-vision, movies, radio, Twitter,Facebook, and blogs. Add to thesenewspapers, magazines, and books.Our world is cluttered with words.How do we choose which messages totune in and which ones to tune out?

At the same time, we also havemessages we want to get across toothers. Most people speak about16,000 words a day. But how many ofyour words would matter? Howmany would make a difference?

Talk is easy. The question is, howcan you make your words count? Howcan you really communicate with oth-ers? How can you gain influence?

CCoonnnneeccttiinngg CCaann MMaakkee YYoouu oorr BBrreeaakk YYoouuYou can’t succeed without commu-

nicating effectively. It’s not enough tojust work hard and do a great job. Youneed to learn how to communicate withothers. As Ralph G. Nichols points out,“The number one criteria for advance-ment and promotion for professionalsis an ability to communicate effectively.”

Have you ever been frustrated whenmaking a presentation because peoplejust weren’t getting it? Have you everwanted your boss to understand howmuch value you add so you could geta well-earned raise or promotion?Have you wanted your children to lis-ten so you could help them makegood choices? Have you wanted toimprove your relationship with afriend or make a positive impact onyour community? If you can’t find away to communicate effectively, youcan’t reach your potential, and youwon’t succeed in the way you desire.

What’s the secret? Connecting! Tosucceed, and sustain success, you mustlearn how to connect with others.

Good communication is all aboutconnecting. If you can connect with

stated, “I alone have had to determinethe interest and the involvement of mycountry,” and he stated, “It’s a lonelyjob.” He never focused on his audience.

In contrast, Reagan was engaged withhis audience and even with Carter.Before the debate, Reagan walked overto Carter to shake his hand, whichseemed to startle the president. Duringthe debate, Reagan listened andsmiled. When it was Reagan’s turn tospeak, his appeals were often directedto his audience. He wasn’t trying tocome across as an expert, though hedid quote figures and dispute some ofCarter’s facts. He was trying to connect.Many remember his closing remarks,when he asked people, “Are you bet-ter off than you were four years ago?”Reagan told his audience, “You madethis country great.” His focus was onthe people. There couldn’t have been agreater contrast between the GreatCommunicator and his predecessor.

A similar contrast can be seen betweenBill Clinton and his successor, GeorgeW. Bush. Clinton took communicationto the next level. He equaled Reagan’sability to connect one-on-one as wellas while looking into a camera. Whenhe said, “I feel your pain,” most peo-ple around the country connected withhim. Clinton possessed Reagan’s con-nection skills and added a mastery ofthe interview and talk show formats.He seemed never to miss a chance toconnect. So far, no politician has sur-passed him in connecting with others.

Bush seemed to miss nearly everyopportunity to connect with people.His one clear moment of connectionoccurred immediately after September11, 2001, when he spoke at GroundZero. After that he usually fumbledand flopped when speaking with oth-ers. His inability to connect alienatedpeople and colored everything he did.

Your effectiveness as a leader is impact-ed by your ability or inability to connect.Connecting helps you achieve goals. Ifyou can’t connect, it will cost you.

To become a better connecter andincrease your influence, focus on oth-ers, expand your connecting vocabu-lary beyond just words, marshall yourenergy for connecting, and gain insightin how great connectors connect.

Find common ground with every-one you meet, make your communica-tion simple, capture people’s interest,inspire others, and be authentic.

As you connect with others, you cansee the positive impact right away. LE

John C. Maxwell is the author of Everyone Communicates,Few Connect. Visit www.johnmaxwell.com.

ACTION: Enhance your ability to connect.

by John C. Maxwell

L e a d e r s h i p E x c e l l e n c e M a y 2 0 1 0 1 9

COMPETENCY CONNECTION

I t a l l b e g i n s w i t h c o n n e c t i n g .

and telecommuting have on the produc-tivity and morale of teams. We learnedthat common problems like not follow-ing through on commitments, ques-tioning decisions, and backbiting occurfar more frequently within virtual teams.And, when people face challenges witha remote colleague, they either resort tosilence and other passive coping strategiesor become verbally violent. Silent behav-iors include avoidance strategies, suchas screening phone calls from remotecolleagues, not returning calls and e-mails, leaving teammates out of theloop on key decisions or avoidingthem altogether. Drastic measuresinclude dissuading others from work-ing with remote colleagues, criticizingthem, gossiping, complaining, andvengefully challenging their decisions.

HHiissttoorryy ooff AAvvooiiddaanncceeFor years, co-located managers and

employees have gone to amazing endsto avoid controversial, touchy or fright-ening conversations. And, even whenthey can address a colleague face toface, people avoid instigating dialoguein high-stakes moments because past

experiences tells them that speaking upwill end badly. For example, when con-sidering how to tell a co-worker that hehas an abrasive and obnoxious person-ality that affects the working relation-ship, most people say nothing. Theyfigure it’s easier to carp about himbehind his back than face an embar-rassing or volatile conversation.

Silence only intensifies when theissue involves a manager or execu-tive—and it doubles again when theissue is sensitive, awkward or uncom-fortable to share, such as performancefeedback or direct criticism.

Sadly, people sacrifice precious timeand resources to avoid uncomfortablemoments. Avoiding crucial conversa-tions is destructive. People who are notconfident in a face-to-face crucial con-versation are much more likely to livewith poor productivity, poor morale,and a poor work environment.

Voice mail, e-mail, teleconferencingand instant messaging only give us

Virtual Teams

WORKING ACROSS THEpond or the room

is easy, thanks to tech-nology. Communicating is not so sim-ple. You must learn to communicatefearlessly and effectively to ensure virtu-al teams maximize collaboration andminimize counterproductive behaviors.

Technology is both a blessing and acurse. On one hand, independentplayers are no longer isolated. Remoteteam members can easily connect withcolleagues across cities and continents.Decisions can be made in moments.The talent pool widens to includediverse experts and contributors.Innovation abounds as diverse teamswith access to diverse resources con-verge on new business models andproduct ideas. Technology makes onceunimaginable connections possible.

On the other hand, while communi-cation technology has expanded, actualcommunication—disseminating mes-sages from senders to receivers—hasreceived a big blow to its purpose andpotential. Societal implications includedevolving language and social skillswherein eloquent syntax and grammarhave been reduced to cryptic gruntsand growls delivered electronically.We are also seeing the negative effectsof virtual technologies in business.

The challenge virtual teams face isproductively brainstorming ideas,solving problems, and executing onprojects with people whose physicallocation—not to mention specialty,and in some cases, culture—makes itdifficult to freely and clearly speakone’s mind. This culture of silence inthe virtual business world—wherepeople swallow their concerns, opin-ions and insight—becomes a breedingground for bad decision making, poormorale, and lost productivity.

The ability to talk candidly and direct-ly in high-stakes moments is a predictorof bottom-line success. Sadly, our studyLong-Distance Loathing shows that whenit comes to holding crucial conversations,most of us clam up instead of speak up.

We surveyed some 600 professionalsto uncover the effects virtual teaming

more tools for avoiding interpersonalcommunication—even when the situa-tion calls for it. The inability to speakcandidly and directly to colleagues isdestructive to productivity. Employeesare 2.5 times more likely to have team-work problems with distant colleagues,and the problems are harder to solve.

WWhhaatt LLeeaaddeerrss CCaann DDooLeaders need to consider the unin-

tended costs and hidden dangers inher-ent in virtual communication.

The solution to virtual teaming pro-blems is not co-location—it’s communica-tion. Unless leaders invest in commun-ication skill-building to make their teamswork more effectively, they’ll continueto undercut their potential. The mostcrucial skill is the ability to raise emotion-ally and politically risky issues with virtualteammates in a candid but respectful way.Many problems flow directly from thefailure to hold crucial conversations.

The leader’s job is to set parameters,define expectations, and enable candid,respectful dialogue. Teams that learnhow to communicate across distanceswill be more effective, and profitable.

To help virtual teams hold crucialconversations, you can do three things:

1. Talk before problems start. Investtime upfront talking about how remoteteammates will work together and set-ting ground rules to air concerns. Setexpectations as a team, commit everyteam member to uphold these rules,ensure every team member understandsthe consequences of violating the rules,and hold one another accountable forviolations. If problems are already full-fledged, call a virtual time out. Hold ameeting to set ground rules. Don’t dis-cuss the content of individual concernsor past problems; reset expectationseveryone can agree to going forward.

2. Praise early. Take time early on toacknowledge small successes. Publiclypraise people who keep ground rulesand meet expectations. Broadcast theirsuccesses in a group conference call orwrite an e-mail and copy their boss.

3. Never raise individual concernspublicly. When holding people account-able for violating a rule, do so one onone. In long-distance crucial conversa-tions, employees are visually impaired—they can’t read body language—andthe other parties are hearing impaired—they may easily hear villainy in a com-plaint. So, when bringing up concerns,always do so one on one. LE

Joseph Grenny is co-founder of VitalSmarts and the author ofCrucial Conversations, Crucial Confrontations and Influencer.Visit www.VitalSmarts.com.

ACTION: Conduct crucial conversations.

by Joseph Grenny

2 0 M a y 2 0 1 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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