Posts Tagged ‘Leadership’

One of the advantages of having worked at several companies is that you really get to understand how different cultures can be. In the newest strategy + business study — The Global Innovation 1000: Why Culture is Key, the researchers make the point that the most important ingredients in building an innovative environment is strategic alignment and a culture that supports innovation. They found after studying the world’s biggest spenders on R&D over seven years that “there is no statistically significant relationship between financial performance and innovation spending, in terms of either total R&D dollars or R&D as a percentage of revenues.” That’s a very revealing statistic. It is natural to assume that high R&D spenders would have the best bottom lines and most success. It just is not true.

Now that innovation spending is back on track after a poor economy, the authors conclude the following below. This is such a critical point for those wishing to understand innovation and what really is important in building a reputation for being a best place to work:

“Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture — it trumps strategy and leadership. This isn’t to say that strategy doesn’t matter, but rather that the particular strategy a company employs will succed only if it is supported by the appropriate cultural attributes.”

It always gets back to the people and the culture. The research is alot deeper than this but the quote above about culture trumping strategy and leadership just jumped out at me. I’d have to argue that the leadership provides the foundation for a culture that supports innovation and that leadership might matter even more than strategy but culture shapes success, and ultimately reputation.

  How much does charisma affect leadership reputation today? It seems to be an age old debate. Too much? Too little? Just about right? When we asked this question years ago in my research on how to build an enduring and long-lasting CEO reputation, we learned that it is was important –  better to have than not have.  Charismatic leadership is not what you say but how you say it.  It’s not just what leaders communicate that makes them charismatic; it’s what they elicit from others. I think I read this somewhere and it stuck in my mind.

Among the new breed of CEOs today, a quieter charisma is now more important. It is not about CEO celebrity but building CEO credibility. Maybe we should call it “slow charisma.” Credibility or authenticity coupled with charisma can be electric.  When you see it, you know it. However, it is not all there is to leadership. Leadership also includes sound judgment, ethical conduct, the ability to listen and serve others. Lets not kid ourselves.

The Economist just wrote an article about what we can learn from Lady Gaga and Mother Teresa about leadership. Apparently there is a lot to learn.  The article infers that brilliant and flawless communications helps enormously, particularly with these two charismatic (in their own way) women.  Here is an excerpt.

Mother Teresa was a “PR machine” who, whether talking to a dying leper or a rich donor, “always left her imprint by communicating in a language the other person understood”. Lady Gaga is “one of the first pop stars to have truly built her career through the internet and social media.  Lady Gaga has what Messrs Anderson, Kupp and Reckhenrich call “leadership projection” and a layman would call charisma. The authors think this is because she tells “three universal stories”. First, a personal story: who am I? (She stresses that she was the weird kid at school, but driven to be creative.) Second, a group narrative: who are we? (She calls her fans “my little monsters” and herself “Mama Monster”, and she communicates with them constantly via Facebook and Twitter.) And third, a collective mission: where are we going? (She promotes gay rights and celebrates self-expression; she tells her fans that together they can change the world.)

Lady Gaga has the “ability to build emotional commitment” in those she leads, says Mr Reckhenrich. This ability is increasingly valuable in today’s business world, he believes. In “The Fine Art of Success”, a book he and his co-authors released last year, they examine it at length. They are now working with Egon Zehnder, an executive-recruitment firm, to figure out how to identify whether candidates for top corporate jobs have the ability to “project leadership” the way Lady Gaga does.

Charisma can be critical when a leader has to deliver an important message, whether the individual has it or not. I think former President George W. Bush demonstrated charisma when he faced the nation after 9-11, both on television from the oval office and when visiting the site of the World Trade Towers site in New York City. All eyes were on him and he delivered, as required.  However, that charismatic leadership soon faded with the war in Iraq and debacle of Hurricane Katrina because the empathy, emotional connection and authenticity were AWOL.  Former President Clinton has it in spades. President Obama has it and especially when he puts it to good use.

In this day and age, it is not enough for CEOs to bark orders or to manage the bottom line only. Being able to deliver meaning and purpose along with a dose of slow charisma and empathetic communications is required. It is a tall order, I know.

  I must be on a “leadership” kick as this week ends. Yesterday I posted about leadership’s role in crisis preparedness. Today I am going to post on the effects of crisis on a leader. At a dinner the other night, my colleague mentioned the impact of the killing of Osama bin Laden on President Obama. We agreed that he had to be a changed man. In yesterday’s reading, Daniel Henninger wrote the following in the same vein:

A candidate is not a president. In the fall of 2008, after Mr. Obama won, our offices were visited by then-Homeland Security Secretary Michael Chertoff, a former anti-mob prosecutor. Asked about the Obama criticisms of the war on terror, Mr. Chertoff replied that it was impossible to overstate the sobering effect of learning the true magnitude of the threat and bearing responsibility for thwarting it. On another occasion, former Attorney General Michael Mukasey, who as a federal judge presided over terrorist trials in New York, was asked the difference between his understanding of terrorism then and as attorney general. “About the difference,” he replied “between what you thought you knew in the sixth grade and a post-doctoral education.”

Without a doubt, the decision to launch the Seals attack on bin Laden’s hideout and the risks that entailed changed the man. Whenever people go through their CEO transition to finally land their company’s highest office, they realize the enormity of the position. Nothing ever looks the same. The buck really does stop at that corner door. As you’ve undoubtedly heard before from Shakespeare,

“Heavy hangs the head that wears the crown.”

  Interesting leadership tactic surfaced when I was reading the New Yorker article on James Dyson of Dyson fame. Dyson forbids the writing of memos at his administrative headquarters so that people have to talk to each other. Since it is an open office, sounds alot easier than the usual dispersed office infrastructure. But I thought that he might just have a good idea. Years ago I recall reading how IBM’s former CEO Lou Gerstner forbade internal memos when he found out early on how much time people spent on them instead of dealing with customers. He wisely regarded this as an early warning sign.  It was just a small part of the things he changed early on in the giant’s turnaround. This practice resonated with me because earlier in my career I worked for a company where the internal memos and internal toasts made or broke careers. It was an art form unto itself and I learned to take it very seriously. When I went to another company, I was surprised how little it mattered as long as the message was clear and the writing grammatical. This also brings to mind a company where they took out all the elevators and made people walk the stairs so they would run into each other and interact. Not the best idea for skyscrapers but a good idea nevertheless. The fundamentals are always the bottom line in leadership.

  Author and columnist Thomas Friedman wrote today: “In this kind of world, leadership at every level of government and business matters more than ever. We have no margin of error anymore, no time for politics as usual or suboptimal legislation.”  Leadership matters is one of the cornerstones of great company reputations. There is no getting around it. The destiny of the CEO is inextricably linked to the company’s reputation. If you have ever worked with a CEO who was not the right fit for the company and who worried about themselves more than the company, you know the damage that the wrong CEO can do. It is almost better to work for a so-so or good, not great, CEO than the wrong one.

Also in today’s New York Times’ business section is some advice from the CEO of The Calvert Group, Barbara Krumsiek . She was asked for her best advice to executives starting out.  She said to ask each executive on your leadership team the following question,  “Tell me about your job, but now tell me about what you think you do here that is not in that job description that you think is really critical.”  Good starting out question but I actually like the second question better, “Tell me one thing that’s going on at Calvert that you think I don’t know that you think I should know.”

The best advice for CEO newcomers is that there is no such thing as a stupid question. One CEO told me that. You get about 3 or 4 months to ask those “stupid” questions.

Getting back to the importance of leadership, we don’t need Thomas Friedman or even me to relay this important news about what drives the global economy and business today — good leaders. Every day we get examples of the impact of good and bad leadership. Unfortunately there are so many examples of bad leadership decisions that we forget to notice the daily good deeds of many company CEOs.  Is too bad. The margin of error might actually be wider than we think.

I recently stumbled over a quote from David Axelrod, President Obama’s chief communications strategist. He said “We need to involve all the other members of the team.” He was referring to the uni-focus on Obama and the need to take some of the 24/7 news cycle spotlight off him by giving his team roles to play in the administration’s strategies. It was a smart statement because it applies to most CEOs as well. Reputation is often driven by the ability of the CEO to build a top bench strength. Not all but several of the top team in an organization need to play supporting roles and build the brand by what they do and say. The chief sustainability officer or chief financial officer, to name two,  can add needed gravitas and thought leadership to a company. Demonstrating that there are successors and that leadership ability is a prime ingredient of a company’s strength helps build reputations. It was interesting to hear Axelrod mention this factor and he makes a good point. It cannot be Obama all the time.

   Just downloaded parts of Korn/Ferry’s new quarterly magazine that was just launched for CEOs, board members and other top officers. The magazine is written by Korn/Ferry consultants along with renowned journalists from the Financial Times, The New York Times, The Economist, Harvard Business Review and The Wall Street Journal, as well as distinguished authors and academics. It is a handsomely produced publication with a broad collection of articles.  The articles on talent and leadership range from succession planning at McDonald’s, corporate governance, crisis leadership from the CEO of American Express, and an article on Hong Kong based trading company Li & Fung Group.  As I thumbed through the pages, I even found business cartoons which I am not embarrassed to say are always fun and uplifting. The articles are serious, informative and timely.  I read the article by Glenn Rifkin on Warren Bennis titled The CEO Whisperer.  Perfect title for Bennis who is a legend in management circles.  Bennis is quoted as saying that one of the things lacking in most companies today is time to reflect on what went wrong and why.  I fully agree that there are not enough debriefings nowadays. I remarked in my book on reputation recovery how the Army has After Action Reviews in order to make sure that mistakes are not made twice. Similarly, The National Transportation Safety Board (NTSB) investigates airline crashes and other transportation accidents with a focus on finding the cause – not who is at fault.  

I intend to read the rest as the week goes on. Might find something on reputation that will be useful for my work. If not, I will make a suggestion that they consider it when the next quarter rolls around.

  Found this fascinating article about the financial services sector and reputation.  Saw it referenced on Twitter. It’s titled Rebuilding Trust with Enterprise Social Networking and describes how some financial services companies are using ERM (enterprise relationship management) effectively to network internally for external relationship-building.  If you are into that sort of thing, read it.  What interested me were two sentences at the top of the article: “Reputation and brand won’t carry the weight they did before the crisis. In this new world, where reputation is no longer enough to create confidence, people turn to trusted individuals.”  Although I realize the author was referring to internal trusted individuals who provide colleagues with access to relationships to grow business, it got me thinking about individual vs. collective reputation.  I think that most people are disenchanted with trusting individuals as much as they did. They just need to remind themselves of CEOs, presidents, investment advisors, politicians, journalists and many more that have let us down. The trust levels of most people of influence could not be lower.  Let’s not forget that many smart people trusted Bernie Madoff with their life savings because of his carefully built exclusive reputation. The recession has revealed many phonies behind those once golden reputations.   In my way of thinking, I believe that company and brand reputation are still going strong (with less fanfare than before) despite being misled by certain individual leaders.  Many company and brand reputations in select sectors are dented but not smashed. My sense is that there will be a resurgence of intense reputation-building as companies get back on their feet and realize that they must build enduring reputations for the long-term that are based on credibility, accountability and sound leadership. I think we haven’t seen anything yet!  Individual reputation-building might take a back seat to company reputation for a long while to come. Individual reputation-building will have to be carried out on behalf of the collective company reputation to really ring true.

Blizzard of cities. After I last wrote in Barcelona, traveled to Munich, the Hauge/Amsterdam, Brussels and Geneva. Finally back in New York. Barely had time to blog so catching up with my travels now. Each meeting raised different items about online reputation management: How do you manage when you are getting 2, 500 Tweets per day? Should CEOs blog? What do you do when a bad bad bad blogger posting is among the top five hits on Google? How do you manage online reputation management when senior management does not see the ROI?  Why are senior executives less worried about their professional reputations than their corporate reputations? Should CEOs Twitter? How do you convince your senior management that online reputation management is important to follow? What’s ahead three years from now?  Financial institutions have legal restrictions that prevent them from disclosing too much information, what choices are there? Interestingly, no one questioned the value of reputation online or offline. I guess they would not have attended our discussions if they did. But no one mentioned that their CEOs were disbelievers. What became clear is that there are no set in stone rules of engagement when it comes to online reputation management. Just like crises overall, the best prevention is preparation. 

In each meeting, I asked people how many people had sent an email to someone by mistake. Nearly everyone raised their hand. Confirms our finding that 87% of senior executives have sent an email to the wrong person or received one not intended for themselves. I also asked how many had social media profiles in sites such as Facebook. The majority raised their hands. Twitter was the dividing line where there were some haves and have-nots. 

Few things worth mentioning now that I am back in New York. Fortune came out with its World’s Most Admired Companies survey. They have consolidated the two versions – America’s Most Admired and World’s Most Admired — into one World’s Most Admired.  Senior editor Geoff Colvin’s article quoted me saying that “The leader still makes or breaks a company’s reputation – we should never forget that.”

Caught up on some reading about managing in a recession by managment guru and writer Jim Collins. He mentions a few important factors that keep some companies great and some….not so great or ungreat (not a word I know). Here are a few interesting thoughts to keep in mind as companies pursue the most admired mantle in these mean times:

• The more challenged you are, the more you have to have your values.
• If’s there’s a storm on the mountain, more important than the plan are the people you have with you.
• Turbulence is your friend.

When I came through Immigration last night (early this morning European time), the guy checking my passport said to me, “hey lady, tell your boss you need a rest.” I’m taking a nap.