Sunday, 27 May 2012

Sometimes the caddy is right.

Two friends were playing for the first time at the home of golf, St. Andrew’s in Scotland. They both took caddies because the course was noted for the subtleties of the greens and unseen hazards.
On the third hole, one player looked at his partner and said ‘…I think this putt rolls from right to left…’ Without leaving his position, his caddie stated ‘…nay laddie, that putt rolls from left to right…’

The player took a second look at the line and then confirmed his original read, right to left. At that point the caddie dropped the bag and glared at his charge while remarking ‘…laddie, why would you buy a dog and then do all the barking…’

How well do you listen to sound advice? Inspiring leaders do not spurn the input of others. Rather they have the humility to recognize that they don't know everything. Furthermore, leaders are careful to not assign blame if they accept counsel that turns out badly.

There was a time when leaders were considered infallible. Their insights, opinions, and decisions were to be accepted as statements of fact. The option for the listener was to accept and perform, or leave.

Regretably, too often the valuable input of those who had been hired to do the job was ignored or worse yet, never solicited. Today there is simply too much information available and too many sources to consider to reasonably expect that one person will have all the answers. Furthermore, with organizational structures flattened as they have been, an important aspect of job satisfaction is the knowledge that one can have input that is genuinely welcomed and considered in the decision making process. More to the point, it contributes to the 'willingness' of the followers who know they are respected and included in the processes that impact their roles.

Within this context, blame cannot be assigned if the advice results in failure. Leaders accept that ‘the buck stops here’ and they do so without retribution. That is not to suggest that future input from that source will not be held to greater scrutiny, but it cannot be done in a manner that discourages input from that source, or indeed, from any other source.

It is important to keep in mind our touchstone of improved productivity as you consider this and any of the qualities and characteristics of leadership.  The leadership model I have proposed is designed for that purpose.

Consensus of opinion may work in small groups considering dinner plans.  But at the end of the day, the inspirational leader takes responsibility for the team or group decision. When it is right, there is enough glory to spread around to all the contributors. If it fails, it falls to the one.

This topic has one prerequisite.  It assumes that as the leader you have hired, trained, and equipped people who are capable of providing the kind of input that adds value to the decision making process.  If that is not the case then you have failed in one of the fundamental responsibilities of your leadership role and you need to address that matter as a priority.

Humility is an overlooked quality of today's Inspirational Leader.  It ought to be viewed as the strength of character that it truly is!

I am not advocating consensus leadership that requires all constituents to be in agreement with the decision. But I am advocating a collaborative style that encourages input even if it has not been specifically requested. 

Employees need to feel valued.  

Leaders need to have the confidence and humility to accept the input of others in setting both goals and strategies.

Sunday, 20 May 2012

The 'HI Principle'

In my earlier musings I commented about the failure or void in leadership that the boomer generation has authored during its time at the reigns of power.  For the most part we have simply adopted the 'commander-in-chief' model and then altered it to suit us by supplanting thankfulness with entitlement.  In the process we have determined that in business we ought to run our companies with a three month window on activities to appease the stock markets and maximize bonus opportunities.  And politically we have elected leaders who promise to fulfil our wants and desires by mortgaging future generations with unsustainable debt.  What a wonderful legacy.  We were handed everything we could hope for:  peace, prosperity and a healthy planet.  Yet through our wanton disregard and lack of leadership on both the personal and corporate level, we foisted the consequences of our excesses and our failures on our children, our grandchildren and beyond.

I submit to you that the leadership model is broken...if indeed it ever truly worked.  In its place we need something that works for the good of all for today and for the future.  In that model we must exercise our responsibilities as the `willing followers` and accept the fact that the noble goals may not be ones which pander to our every want and desire.  Sometimes changes come with a certain amount of pain.  In this context I am not referring to the workplace, but to our societal expectations, yet the leadership model should be equally applicable.

The HI Principle is based on two like-weighted pillars.  The first is humility and the second is integrity.  Neither of these are skills.  Both are qualities or characteristics.  Our focus on skills in leadership has, in part, brought us the results that I previously referenced, and most studies on leadership have focused on the differences in skills needed to lead as opposed to manage.  But as several have said in different ways, reputation is what others think about you; character is what you really are.

We need our leaders to inspire us with their character, not with their skills.  Skills can be taught.  Character is who you are, what you have CHOSEN to be. It is- or ought to be- part of our DNA. Character inspires us to achieve our full potential because it nurtures and encourages us.  This is not to suggest that skills are unimportant, but if we are to weigh the importance of the two- character versus skill- the scales clearly favour the weight of character by a wide margin.

And yet, this is where our leaders have generally failed us.  And it is an indictment on the majority.  The good news is that because character is a choice, leaders can change.  The question is `will they?`.  There are eight specific qualities that I will focus on, and then I will offer an unexpected challenge to leaders over the coming weeks.  Today I present my first characteristic; that of accountability.

Leaders must accept a higher level of accountability. It may seem unfair, but nonetheless it is true. Typically those in leadership roles are compensated more significantly than their colleagues. As well, they are afforded other perks and benefits that escalate with the impact of their leadership position. Accordingly, it is reasonable to expect that the tolerance for performance becomes stricter and stricter the higher the level of authority reaches.
Sadly, too many executives take an entirely contrary approach to the matter. Instead of scrutiny, executives have invoked entitlement and have abused their roles as leaders. Some have been caught and now pay the consequences by serving extended incarceration. Senior executives at well-known firms such as Tyco – ADT, Enron, and Adelphia are just a few examples. World Com, Hollinger, Livent, and Nortel are others in a similar position.

Some have avoided prison, but face public humiliation for their actions. Former leaders of GM and Chrysler have all been disgraced for their opulent or excessive behaviour during the recent economic crisis. These auto executives felt that they were acting appropriately by taking a private jet to Washington D.C. to beg for bailout funds to support their companies despite the fact that their decisions had brought about the demise.

In January 2009, the former chief of Merrill Lynch authorized payment of over $3.6 billion in bonuses just before the company was acquired by Bank of America in a distress sale brought about by the actions and decisions of the bonus recipients . How these individuals could have become so self-deceived as to justify their actions speaks volumes to the depth of entitlement that they had developed. Somehow they came to believe that they were beyond scrutiny, beyond principles, beyond common sense.
We rightfully hold leaders to a higher level of accountability. We look to them for examples of right. They are not obliged to accept the role, but they are obliged to accept the expectations of leadership and all it  encompasses. As Harry S. Truman famously stated, ‘…if you can’t take the heat, stay out of the kitchen…’ It was true in the 1940s and remains true today. Inspirational leaders feel the heat, but they don’t melt! Inspirational leaders choose to accept all the expectations along with all the benefits. It is not an either/or proposition. It is a both/and commitment to do your very best, all the time. That is being accountable.

If this expectation seems unreasonable to you as a senior leader, consider some facts from Statistics Canada that provide context to the argument.
1. The top 10% of wage earners now earn more than 10 times the amount of the lowest 10%.
2. In Canada, under 6% of all earners make more than $100k per year. But over 60% make less than $40k.
3. The top 1% of earners took home almost 14% of all income.
4. The wealthiest in Canada saw their marginal tax rate fall from 43% to 29% over the past 30 years. Not only are they making more but their take home pay increased by 25%.

Is it any wonder that there should be a heightened level of expectation for performance, conduct and responsibility the higher up the leadership ladder one ascends?

One author has called the current executive level compensation approach nothing more than ‘crony capitalism’. A CEO works to ensure that the Compensation Committee accepts the need to keep the pay scale in the 75th quartile or above. This becomes a self-perpetuating means of automatic increases that exceed anything justified by merit or cost of living. But what is good for the goose is seldom good for the gander as the need to rein in operating costs drives organizations to restrict or even reduce any growth in income for their general population. How else can you explain the fact that the average CEO compensation for the top 100 companies is 189 times the wage of the average employee? It is an extraordinary company which can truly demonstrate that this level of accomplishment actually exists and is thereby justified. The reality is that regardless of the role that ANY person occupies in an organization, the company can and should be able to survive their departure. Even the largest and most successful companies have a succession plan in place that should have several candidates under consideration should the CEO suddenly need to be replaced. Whether that departure is planned or a result of a catastrophic event, the company will carry on. Its health and long term well -being should never be in jeopardy as a result of a change in leadership.

And so the answer must be ‘yes’ to the question of accountability. Entitlement must be replaced with the expectation that every person is required to provide their very best performance. And this level of performance is the reasonable expectation regardless of the amount of compensation.

Links to references are available upon request.

Monday, 14 May 2012

The Leadership Equation (Continued)

In my last blog I introduced the first component of The Leadership Equation. Today I will complete that equation.

Part two relates to those who follow the leader.  Specifically, those who follow must do so willingly.   It borders on the oxymoronic to suggest that those who must be pushed or pulled or coerced to a specific goal are doing so willingly. Rather, the willing response of the group is actually an acknowledgement and affirmation of the individual who has been called into leadership. This attitudinal position has a fundamentally positive impact on the process and significantly enhances the prospects of success.  Without a willing team, it is not possible to have an authentic leadership model.  And of equal importance, productivity will be at risk.

The third component relates to the goal or objective that the team is pursuing.  This goal must be noble or honourable.  It must meet each of these criteria.  Ethical, moral, legal and...achievable.  If the objective cannot satisfy all of these descriptors, it fails to meet the basic and necessary standard. 

Before you jump to conclusions, let me state that profit can be a noble objective.  Take the case of K. Matsushita, founder of Panasonic.  Matsushita argued that profit was simply the recognition of society that the product or service being sold represented a value which they supported through their purchases.  If that product or service failed to meet a value proposition, society would vote with its wallet.  Simply put, the value of a thing is what it will bring.  Profit is only ignoble when the means of achieving that profit fail to meet the moral, legal and ethical requirements.

Based on this leadership equation, I define leadership as:

A leader is one who, by virtue of their moral authority, is able to persuade others to willingly follow in the pursuit of a noble or honourable goal.

The value of presenting this definition in the form of an equation is seen particularly when things are not working out as anticipated.  You can now  analyze which component is not in compliance and then work to address the issues that are out of alignment.  As example, has the leader lost moral authority or is it being challenged in such a way as to cause confusion amongst the team members?  Perhaps the goal has become unachievable because of unforeseen circumstances.  If so, the team has probably responded with muted enthusiasm that is curbing productivity.  In either case, the equation allows you to be more focused on finding a resolution and getting things back on track.

Leadership is not a right, but a privilege.  Therefore inspirational leadership must be a habit, not an act.  Too often the reality is that authentic leadership has been found to be difficult...and left wanting.  This prompts the 'leader' to adopt non-inspirational approaches to motivation which only serves to  move the team further away from the goal rather than closer to it.  This is so tragic because we need true leaders now more than ever!  We need leadership that inspires us to fulfil our potential, not that which inhibits us.  Far too many aspire for leadership rather than being called into the position.  Their motives are entirely selfish at a time when altruism ought to be at the root of their service.

Some will argue that altruism is in conflict with the dynamic and critical decisions that must take place in order to guide an organization or even a team during these uncertain times.  To them I would say very simply, look at where that type of decision making has taken us now.  Christine Legarde of the IMF stated in November 2011 that we may very well be in the throws of a lost decade with respect to true GDP growth.  If you think that is an exaggeration, look to the example of Japan over the past two decades.

We need a new model of leadership.  I call it the `HI Principle'.

Please join me again next time as we begin to look at what this Inspirational Leadership approach looks like in the workplace.  You may be surprised at both how easy and how difficult it can be.

Tuesday, 8 May 2012

The Leadership Equation

In an earlier blog I offered a means to measure the effectiveness of the leadership being provided in any organization.  I used the analogy of a rowboat and suggested that based on different surveys, productivity is likely no better than about 60% in most organizations.  And depending upon the impact of the negative contribution of the other 40% of employees, actual productivity may be as low as 20%.  In this scenario, getting just one of the four negative contributors to turn their oar to a positive contribution will improve overall productivity by 100% (from 20% to 40% overall).  Obviously the goal is to get all the oars in the water and pulling towards the same objective.  Only then is productivity maximized.

While there are various means of motivating employees, only one involves authentic leadership.  You may coerce, threaten, bully, harass or dictate as a means of 'motivation'.  But that only makes you a dictator, bully, tyrant or intimidator.  None of these lead; they all push.

What is needed is inspirational leadership.  This model provides effective and sustainable results that are reflected in the workplace by a positive environment and culture and ultimately improved productivity. 

This inspirational leadership model is defined in my Leadership Equation.  The value of the equation is twofold.  First is that you have an example to draw upon.  The second is that you have a means for analysis when things are not working out as anticipated.  The two are equally important.

The Equation has three components.  And only one part has to do with the individual leader.

First, the leader must have moral authority.  This authority can come from a variety of means.  In our democratic process, those whom we elect to political positions have a moral authority granted to them by society to lead and govern.  Those in corporations who are leadership roles have moral authority granted by virtue of the shareholders who approve of the Board of Directors and their subsequent appointment of the CEO.  Through delegation of authority, subsequent appointments of other leaders also have moral authority.

Sometimes moral authority is granted within a group.  The example of a jury speaks to this type of appointment wherein the group itself selects a foreperson to represent them.  This person thus has moral authority.

Under no circumstance can leadership be self declared.  Sole ownership is the exception. Any attempt at self declaration is not leadership but a coup and falls into the definition of dictator, regardless of how well intentioned their motives may be.  Consider the example of Alexander Haig, Secretary of State under President Ronald Reagan.  Upon hearing of an assassination attempt on Reagan, Haig famously declared that he was in charge, his former military career training had kicked in.  The problem was that the U.S. constitution had already made provisions for succession in such a situation, and Haig`s role placed him 5th in that plan.  His self declaration was not only wrong but it became an unfortunate defining moment in his career, a moment that was viewed derisively, not in a complimentary way.

The moral authority of the leader may be challenged by others.  Sometimes consciously, sometimes unintentionally.  For example, a team member may have leadership desires and seek to influence the team.  Or the leader`s superior may attempt to exert influence on the team and bypass the leader.

Both of these situations must be addressed proactively.  If you are the leader and have the moral authority to hold that position, you must exercise your authority and confront these intrusions.  It is crucial that the team has one person and only one person that holds their focus. Without that focus you risk losing the impact of the moral authority that you already possess.

In my next blog I will discuss the other two components of The Leadership Equation.  Please join me.

Sunday, 6 May 2012

Where are we now?

In the last instalment we examined the nature of the workplace into which many of today's leaders received their introduction and indoctrination.  On balance, the leadership of that day lacked any real sophistication, for a variety of reasons.  But much has changed and it is important to understand these differences in order to develop an effective and necessary leadership model.  Today I want to review some of the major changes and what they mean to us.

1.  Whereas the former workplace was a white male dominated environment, today we have a true multi-national environment in which women now are more fully represented at all levels of leadership.  This environment requires a much higher level of sophistication in order to motivate a diverse team towards a common goal.

2.  Today's employee is much better educated than at any time in the past.  This means that she/he is far better prepared to contribute at a high level in a relatively short time.  This is an important fact for the leader to recognize because individual contributions impact job satisfaction significantly.

3.  We are in a very difficult economic environment.  Unemployment is high and companies are contracting as opposed to growing.  The IMF suggests that we may be in a decade long period of economic stagnation.  All these factors contribute to a very high level of stress amongst all levels in a company.  And this requires a higher level of leadership and management competency to continue to draw out the best in people.

4.  Organizations have continually restructured and flattened their hierarchy.  This leads to fewer opportunities for advancement for everyone.  As a consequence, job satisfaction must come in different ways that do not include promotion and compensation increases.  Staff members must be inspired to contribute and to be part of a successful team environment as a key aspect of job satisfaction.

5.  Information moves at the speed of light.  And the avalanche of data makes it impossible for one person to be the 'oracle' in which all wisdom resides.  Employees want and need to be an integral part of the decision making process.  Any leader who ignores this reality does so at their professional peril.

The problem is that far too many employers continue to deny these realities and attempt to perpetuate the old model that ostensibly served them well in the past.  The result is that productivity declines; the best employees leave for opportunities that allow them better self expression; and a downward spiral performance continues while leaders stand by dumbfounded at how to halt the inevitable.

In the next blog I will begin to outline the route to Leadership that Inspires that will address the needs of today's workplace.

Tuesday, 1 May 2012

Where are we coming from?

Before we can properly address this issue of inspirational leadership, we need to analyze where we are coming from.  I noted in an earlier blog that, as baby boomers, we entered a far different workplace.  Not only were our role models products of the depression and World War Two, but there were many other significant differences.  Some of these include:
1.  Almost exclusively, the leaders were male.  This led very much to a 'might is right' type of attitude in the workplace.  Leadership was rarely inspirational.  More typically leadership took on the form of bullying, threats, harassment or other types of coercion.  Let`s just admit that there was a lack of sophistication in the management and leadership styles.
2.  Post secondary education was still not common amongst middle managers and many senior leaders.  So `seat of the pants` best describes the style of process.  MBA programs had only just started in the `60`s`and the study of leadership only began in earnest in the seventies.  Again, the lack of sophistication was evident.
3.  Jobs were plentiful and the economy was booming.  I remember quitting my first job before I started because I received a better offer later in the week for the grand sum of $500 a year more.
4.  Companies were hierarchical and offered seemingly unlimited opportunities for advancement.  People were often promoted almost out of desperation because of the speed of growth.  This prompted the publication of a book called The Peter Principle in which the author contended that individuals were promoted until they reach their level of incompetence.  By extension he argued that this resulted in corporations across North America being run by incompetents...
5. Information moved at a `snail mail` pace.  And there was far less information available.  So often the tried and true model was easy to maintain.
6.  And finally, all knowledge was presumed to reside in the corner office.  The boss was deemed to be infallible.  His word was gospel and virtually unchallenged.

But along the way we had that Wizard of Oz epiphany.  You will remember that Toto jumped from Dorothy's arms to pull back the curtain on an old man pulling levers and shouting into a horn.  When exposed, Dorothy confronted him and exclaimed " are a bad, bad man..." to which he replied " little girl, I am not a bad man, I am just a bad wizard..."

Our leaders were not bad people, but they were bad leaders.  And as the conditions of business changed, their shortcomings were exposed.

Next time we will look at what has changed and where those changes are taking us.