The Plumb Line

In Jane Austen’s book ‘Pride and Prejudice’, her Mr. Darcy proclaims “…my good opinion, once lost, is lost forever…”

For the inspirational leader there is no such thing as ‘situational ethics’.  That is, right or wrong is not a reflection of the circumstances.  Right is right and wrong is wrong. Truth is not relative.

People on your team must know that there is always a moral compass guiding decisions.  They must know that the response to any situation is not dependent upon who is more senior, or more favoured or more fortunate.  They must know that the situation does not dictate the response but rather the ethical, moral or legal imperative is that which has priority.

Situational ethics are used only by those for whom ‘doing the right thing’ is an optional exercise rather than an obligation.  It is for those who see truth as an inconvenience and a potential obstacle to the achievement of the goal.

Quite apart from disrupting the inspirational leadership model, the fact of the matter is that situational ethics creates a dilemma throughout the organization.

There are no longer any standards that cannot be compromised.  Whether that is dealing with company assets, company finances or company information, where does one draw the line?   When a bribe paid to a foreign nation in order to secure an order and generate business because that is ‘business as usual’ in that country, what’s the issue?  A recent PBS documentary highlighted that much of our current economic malaise associated with the US housing market can be traced back to the practice of derivative trading conducted by major US banks.  The documentary showed that the practice would have violated US law had the banks not sold these financial instruments to European banks and non-bank companies in the US.  The bottom line was that the US banks found a way around the law and in doing so they created a market for mortgages where non would have otherwise existed.  Situational ethics in action!

The list is endless when everyone gets to interpret truth for themselves.  No definitions are valid any longer.  If I see performance one way and you see it differently, who is right.  Or for that matter, is there a ‘wrong’ any more.

Leaders set the standard.  And the standard must be unambiguous.

Expectations must be codified.  And they must be applicable across all levels of the organization.  As we saw with the issue of accountability, there can be no exceptions.  Too many people are impacted by the failure to abide by the standards that are established.

The impact of situational ethics extends beyond the borders of your team or your company.  It really extends to all your business partners, whether they are suppliers or clients. 

All the stakeholders that touch your firm need to know and understand the principles by which you operate.  They are looking for the same unambiguous standards that you promote for interaction within the company.

At the same time, your employees need to understand that the standards are applicable externally as well as internally.  There should never be a question in their minds about the need to compromise their personal integrity or the company’s standards.  No client, no supplier, no opportunity is ever so important as to require you to defer to a situational ethics decision.  As tempting as it may be in the short term, the consequences that follow will NEVER justify the decision.

The consequences may not be immediate. You may be able to rationalize the decision based on any number of factors.  But as well intentioned as you think your motivation, you move away from your standards at your peril.  RESIST the temptation.  Deal in truth, not in abstract.  Everyone wins when you set the standard and then abide by it.

It's easier to read a book once it's been opened!

Today’s inspirational leaders are both transparent and vulnerable.  Neither of these qualities is evidence of weakness or a lack of competence; rather they should be viewed as signs of strength. 

The complexities of business, indeed the complexities of life, are increasing daily.  The amount of information that we create is overwhelming and trying to sift through the data to determine what is meaningful and what is simply ‘information traffic’ is an imposing and time-consuming task.  Leaders need to have the strength of character to acknowledge these facts.  And then they must demonstrate the vulnerability to ask for help.

This may come in the form of delegation of responsibility that was outlined previously. But here I am addressing the tsunami that can come up unexpectedly and simply swamp an individual, regardless of how accomplished and experienced they may be.

A healthy and properly functioning team is always ready to breach the gap.  This response, rather than being critical of the leader, is, in fact, an affirmation of their leader.  The willingness to assist demonstrates alignment with their leader and the goals. 

Where vulnerability is hidden, so is trust.  Employees today know all too well the scope of challenges that face every leader.  They may not know specifics, but generally speaking, we are dealing with a workforce that is better educated, plugged into the information streams and acutely aware of the difficult competitive landscape that faces almost every business.  For a leader today to simply internalize or rationalize the issues for fear that they are seen as being unable to cope is an unrealistic and dangerous response.

The strength of character is demonstrated not by the ‘knowing’ but in the ‘asking’.

I have coupled vulnerability with transparency very deliberately.  Because many senior leaders continue to operate in an environment that does not properly acknowledge the impact and influence of social media.

Can you say ‘Facebook’ or ‘YouTube’?

There was a time, less than a decade ago, in which the disingenuous leader was able to operate in a cloaked manner.  But today we have an internet based communications launching pad that distributes information with an immediacy, a scope and a frankness that is unparalleled in history.

Please note that the word ‘information’ is used advisedly.  I did not use the word ‘facts’ because often facts get in the way of a good story.  And most users of these social networks are too lazy to confirm anything. 

Review chapter 2 and the discussion on a higher level of accountability again as you consider this aspect of transparency.

In the inspirational leadership equation I stated that the goal or purpose must be noble.  And by noble I said it must be legal, ethical, moral and achievable.

If there is any abuse of this equation, you can be confident that some social media tool will expose it.  Indeed some sites have that specific mandate.  Wikileaks.com has gained great exposure doing just that. 

A smart phone today acts as a video camera, editor, and transmitter all at once.  History unfolds as a live event and is streamed everywhere. The answer to the implied question then is simple.  A leader cannot lead inspirationally unless they are committed to the goals of transparency and vulnerability.  Those that are committed to this principle have nothing to be concerned about.  Those who cannot stand the light of transparency ought to step out of the glare.  There is no third choice.

You only get out what you are willing to put in.

Inspirational leaders model and nurture future leaders.  This task is critically important to the ongoing health of an organization and inspirational leaders instinctively demonstrate this capacity because they themselves have often been the beneficiary of this coaching.

Unfortunately you will find situations in every company in which this process is not practiced.  Typically the reason is that the individual in the role of ‘leader’ is ill equipped for the function and is therefore intimidated by those who, by virtue of experience, skill or character, are superior in leadership competence. 

Nurturing and modelling can take on several activities.  A primary method is by delegating responsibility and authority for some functions.  Note however, that accountability cannot be delegated in this model.  To delegate accountability is tantamount to abdication of responsibility and, by definition, is inconsistent with leadership.

Delegation in this model is aligned with the quality outlined in the previous chapter that encouraged risk taking even if it results in failure. That is another reason why accountability cannot be delegated.

Modelling can be demonstrated by the LBWA principle…Leadership by Walking Around.

Twenty years ago, Ken Blanchard wrote the book “The One Minute Manager” in which he talked about ‘managing by walking around’ or MBWA. (1)

The same principle can be applied for developing leadership qualities in your staff.  Leadership by walking around is your opportunity to engage your team members without focusing on specific results of the day. The opportunity to casually share your vision and to have those ‘blue sky’ conversations builds confidence and rapport and goes a long way to keeping the team members willing to follow. 

These are especially good times to catch someone doing something well and to add inspiration through your recognition of their efforts.  A team member who is truly appreciated is one who is more fully committed.  In today’s environment where opportunities for promotion or significant increases in compensation are restricted, an environment that recognizes and acknowledges individual contributions is one which is more likely to attract and retain quality personnel and to have them contribute at a high level.

Nurturing and modelling can never include coercion of any sort.  This includes threats, slander, physical or sexual harassment, or any kind of behaviour intended to force someone into a particular response.  It may seem self-evident, but in fact we have a different definition for this approach or style. Words like bully, dictator or tyrant more appropriately define this type of person.

This is not to suggest that some things are not accomplished using these styles.  But given that the 'willingness to follow' has now been replaced by either pushing or pulling, the inspirational leadership model is not active. 

If you are not certain that the model has changed, just look at the tracks left by the heels that were dug in to resist. They will have left enough of a record to convince even the most sceptical critic that something inappropriate has taken place.

Ideally, your modelling and nurturing is not forced.  Rather it should be the natural outflow of your daily behaviour and activities.  If you are not choosing to demonstrate the characteristics of leadership, you are modelling some other style.  And the probable outcome is that you are alienating your staff, not drawing them into the team objectives that you have established.  If the qualities are not part of your DNA, your insincere approach to the leadership model will ultimately become exposed.  We will discuss the consequences in the next blog.

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[1] http://www.kenblanchard.com/Store/Books

An Enlightend Perspective on 'Failure'

Inspiratonal Leadership requires patience. No organization can maintain the status quo.  Change is inevitable; and with change you introduce the risk of failure.  Yet failure can be an acceptable outcome so long as it is 'controlled'. 

It sounds contradictory that you can gain while losing.  But it is true that our best lessons are learned in adversity.  Therefore an inspirational leader will always be encouraging others to take risks that have the potential to end in failure;  even approving initiatives with which the leader is not in full agreement. 

The key to this principle is that failure can never be such that it is catastrophic or fatal to the life of the enterprise. And equally important, that which is learned must be of greater value that that which has been lost.

This is why an effective leader has a long term focus.  In the long term context, failures take on a proper perspective.  The loss of $1000 may seem important if the monthly target was $10000. But if the annual objective is $120,000, then $1000 is much less significant and the risk is seen in it's context.

Having the resolve to accept failure as a natural part of progression is a liberating attribute for everyone involved.

First it allows for a breadth of creative thought that would otherwise be unlikely. How often are we looking for ways to re-invent a solution or to develop a new and innovative approach to an issue?  As long as failure is viewed in a negative way, reverting to the ‘tried and true’ will always carry more weight than it should. This is not to suggest or imply that failure is, in some way, the objective or to condone it as a goal. You can never make a silk purse from a sow's ear.

But consider these thoughts...

Thomas Edison is rightly regarded as one of the greatest inventors of the 20^th century.  Yet failure was his constant companion to which he said: “…I am not discouraged, because every wrong attempt discarded is another step forward..."

Margaret Atwood is one of Canada’s most important novelists.  About failure she had this to say: “…A ratio of failures is built into the process of writing. The wastebasket has evolved for a reason…”


J.K. Rowling, author of the Harry Potter books was quoted at her 2008 Harvard University Commencement address: “…it is impossible to live without failing at something; unless you live so cautiously that you might as well not have lived at all. In which case you have failed, by default..." It


None of these was disuaded by their failures; frustrated and occasionally discouraged to be sure.  But all used failure as a platform for future success.

For the leader, there is a different liberation.  Rather than hand hold the team through to the conclusion, there is an expectation of maturity and improved risk taking that may result in even greater efficiencies in the attainment of the goal.  Fostering this ‘outside the box’ thinking often opens the door to better processes and best practices are actually improved.  How much more productive will your team members become knowing that they have your unqualified support and are daily being encouraged to reach their full potential?  Is this not the same level of trust and support you crave and expect from your superior? 

Leaders today do well to remember that for both themselves and their staff.

Creating a culture and a climate that fosters this attitude is one of the leader’s most important contributions to the organization.  Sometimes it requires the individual to be brave and courageous.  But then, isn’t that our reasonable expectation?

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.

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.

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.