Prologue

Looking back, looking forward.  The theme of last year’s newsletters was Lessons Learned for Better Leaders and Outcomes.  We commented on ten lessons noted by Joe Bockerstette’s post on LinkedIn titled Ten Lessons Learned from Thirty-Five Years in Consulting.  Looking back, the past year presented us with a treasure trove of leadership lessons.  The obvious reaction to a very public forum is noted, but well within these displays of leadership miscues are serious lessons to be learned. 

We speak of bench-marking and when we typically benchmark we look for functions or practices to emulate or tailor to our situation.  Bench-marking works in reverse too; learning what not do.  So this coming year we intend to be less structured and deal with some of the underlying leadership failings.  We start with the topic of Entitlement.  Future articles will look at ethics, humility and other leadership issues facing our rapidly changing and very vocal society.

The Golden Age of Entitlement

During a recent trip to Florida we visited The Henry Plant Museum, originally the Tampa Bay Hotel, built in the late 1800s.  The Tampa Bay Hotel along with many of the Newport Mansions were built during the “Gilded Age” between the late 1800s and early 1900s.  It is said about this period: “It is easy to caricature the Gilded Age as an era of corruption, conspicuous consumption, and unfettered capitalism. But it is more useful to think of this as modern America's formative period, when an agrarian society of small producers were transformed into an urban society dominated by industrial corporations.” 

One of the greatest leadership stories is that of Earnest Shackleton, the Antarctic Explorer.  His last expedition to cross the Antarctic Continent in 1914 was called the last great expedition in the “Golden Age of Exploration.” That period was described as follows:  “… the golden age of exploration, a time when men and women of science roamed the world, uncovering its geographical secrets at a breathtaking pace and giving rise to bitter international competitions.”

Then came the Roaring Twenties, followed by the Great Depression of 1929 and the New Deal in 1933 followed by the “Golden Age of Capitalism” from after World War II through the mid-1970s, overlapping with the Great Society and then Neo Liberalism.

The point of this historical sketch is that over the years, the United States and the world have gone through cycles.  Some sound glamorous, others more political and some quite miserable.  We provide links and/or copies of some excerpts of these periods if you wish more detail.  

What we are suggesting in this article is we are in yet another period we refer to as the Golden Age of Entitlement.  While this is as broad a moniker as those above, we intend on focusing on our characterization from a leadership perspective.

In October 2010 our UPDATE article was titled “Why I am so Important – the case for Servant Leadership.” Seven plus years later the topic is more important than ever.  When we discuss leadership and leaders in our workshops, we explore where leaders get their power or influence. 

Those sources of power include:

Legitimate power              power because of title

Reward power                   a person who controls things you want

Coercive power                 ridicule, punishment

Referent power                 consistent set of values, goals and ways of getting there even if they don’t agree with you.  Will follow you with a consistent set of values

Charismatic power            who you are as a person

Expertise power                knowledge, skill

Situation power                clerk who holds a low position but can control people by their cooperation

Information power            share or hold back affects power

In the positive leadership context, which we attempt to convey to attendees in many of our seminars, the combination of Referent, Charismatic and Expertise power or influence are important to becoming an effective leader.  I am sure you can think of leaders and people who exhibit the above characteristics, both good and bad.  For the purposes of our discussion here, we are focusing on entitlement and how leaders use their power/influence to exercise entitlement and then contrasting it with the concept of Servant Leadership.

Servant Leadership

What is Servant Leadership?  In our 2010 UPDATE issue we define Servant Leadership as “It is not the opposite of narcissism, it is more of an awareness, self-discipline and self-assessment, and commitment to something bigger than one‘s self-imposed importance.”   Quite simply, it is recognizing the importance and contributions of all in an organization.  It is seeking out ideas from and actively supporting and serving everyone in the organization.  There is no “playing the rank card” in Servant Leadership.   There is no use of Legitimate, Coercive or Reward power by a Servant Leader.   

There appears to be an overwhelming trend where leaders believe they are a privileged class.  A class that deserves exorbitant salaries, privileges, benefits, etc.  That their behavior is exempt from the norms of society, ethics and even the law. That leadership is not for serving those who one leads, but rather a position of privilege and a general disconnection with employees or constituents.  Depending on the source of influence this disconnection manifests itself in many ways.  A client who was a CEO, when asked if he had been out in their organization, replied that “I have not been out with the proletariat for a while.”  That alone sent a strong message.  Talk about disconnection.  But nothing but the best when it came to travel arrangements and personal perks for this person.

Let’s look at Reward power.  This source of power/influence is well noted in the news.  Reward power has been abused to the utmost by people who may not have legitimate power as defined above, but use their ability to reward people if those people conform to their wishes.

In these simple examples it becomes obvious how an entitlement culture can develop.  No one wants to lose power or influence, and when they have it they exercise it.  And because they feel they are above the law, they continue.  From a leadership perspective the notion of serving and servitude has gone by the wayside. Humility is replaced with arrogance and self-righteousness.

We constantly see articles and hear news reports about company executives, politicians and other influential individuals, behaving in very arrogant ways.  How have we slipped into this cycle where so many in leadership positions feel that they are the privileged and so much better than anyone else?  Why do these individuals treat others as second class citizens?  We definitely do not want to characterize all leaders as falling into this mold.  There are many who are Servant Leaders and who have the best interest of the entire organization in their focus.  But, too many have fallen into the Rank Has It’s Privilege (RHIP) mindset.

Is it a shock that we have seen this evolution on Entitled leaders?  Not really when you think about the exorbitant salaries and outrageous perks that CEOs and other senior leaders are now paid.  Boards of Directors are also demanding that numbers be met.  The driving function is satisfying the stock holders (at least the most influential ones) at the expense of any other factors.  Impact on the environment, on the communities that house the facilities and on society are ignored or at best discounted until a regulatory agency forces compliance.  In general, the direction of the Board of Directors is too narrowly focused.

The argument justifying the above is one of attracting top talent.  Companies feel they need to offer tremendous salaries and employment contracts to ensure they are getting the best available talent.  At least they think they are getting the best talent available.  We know that this argument has a less than stellar track record.  Perhaps these salaries and contracts actually work in reverse.  A topic for further research and perhaps a future article.

Individuals in these senior positions see the direction from the Boards and are focusing too frequently on how can I make myself look good (short term goals and returns)? They use Legitimate, Reward and Coercive powers to their advantage.  They have become the central focus making certain the world knows how good they are.  Consequentially, they feel entitled and act entitled.  Entitled leaders see themselves above the “proletariat” yet the proletariat make the products or serve the customers?  It is the “proletariat” without whom the company has no success.  Hence too frequently the movers and shakers and doers in the organization are treated as second class citizens within the overall operation of the company.

In contrast, Servant leaders know that short-term results are visible to many outside the organization but short-term results don’t necessarily mean long-term growth.  If you achieve strong short-term results at the expense of the people in the organization, the chances are the good people will leave or check out and the organization will not sustain the strong performance.   And the people who make the organization run will get tired of all the recognition being taken by the person at the top with no acknowledgement of the contributions from within.

Our goal is not to get into political discussions, but we have long seen politicians at all levels of government get elected and them immediately focus on themselves and completely ignore the wishes of those who elected them.  Suddenly they know what is best for the people without even taking the time or making an effort to hear what the people want or need.

The problem here is the Golden Age of Entitlement looks much like the Gilded Age where a few have most of everything and believe that is just fine. Technology companies are replacing industrial companies much the same way industrial companies replaced an agrarian society during the Gilded Age. We understand that we are focusing on a rather narrow aspect of this issue, but in the context of our discussion, many of the Gilded Age descriptions fit our Golden Age of Entitlement. 

The Million Dollar question becomes: how do we move away from a culture of entitlement?  The answer is not simple or easy.  Leadership development must include strong components of servant leadership to cultivate more enlightened leaders.  This is a balancing act, but also requires a leap of faith.  Leaders need to realize that doing the right thing leads to stronger bottom lines and stock prices, maybe not in the short term but in the bigger picture the metrics will prevail with a stronger and healthier organization.  With the people in the organization being recognized and celebrated and not just used as a way for the people at the top to garner the glory.

The irony is that there are examples of such success.  A most recent example was noted recently on CBS’s morning news program (https://www.cbsnews.com/videos/oklahoma-city-mayor-talks-public-health-infrastructure-and-immigration/).   The mayor of Oklahoma City, Mick Cornett, discusses the successes realized in Oklahoma City and cultural change.  He also did a Ted Talk which we urge our readers to view. https://www.ted.com/talks/mick_cornett_how_an_obese_town_lost_a_million_pounds

The impetus for the story camouflages the essence of what really happened in OKC.  So things can change and leaders can be positive examples and make things happen. 

In Closing

Finally, repeating a quote from Max DePree in his book Leadership Jazz:  “Leadership is a job, not a position.  The people who work for you are not your people; you are theirs.  Leadership is good work because leaders feel a strong need to express their potential and because they wish to serve the needs of others.  This is the essence of becoming a servant leader.” 

The Golden Age of Entitlement hopefully will be short lived. Those of us who have the distinct opportunity to shape leadership development program and offer counsel to organizational leaders must focus on servitude, and humility.  Stress the application of Referent, Charismatic and Expertise sources of influence and power rather than arrogance and narcissism.   And to those of you who are in an entitled situation, do some self-assessment and determine if you are a Servant Leader or how you can adjust your leadership style to achieve servant leadership.

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  A business case for training

For the majority of our professional careers, we worked in the areas of human factors, training and organizational development.  While we sincerely believe the changes and improvements designed and implemented made serious contributions to safety and operational performance, proving an accident or injury that did not happen because of our contribution is a very difficult thing to do.  For example, several years following the accident at Three Mile Island we assessed, developed and implemented design changes for commercial nuclear power plant control rooms.  But, if the human factors assessments and subsequent improvements had not been required by the Nuclear Regulatory Commission, would the industry have participated?  The issue; when we would claim that a human factors redesign would improve performance, resulting in saving just one reactor trip (SCRAM), our fee would be covered.  Their response – prove you will save us a reactor trip.  Tough argument.  Training rationale is similar.  Everyone knows these initiatives are beneficial and in the longer term yield positive results (with management commitment and support), but being able to put numbers, that accountants like to see to those results, is difficult.  For close to 20 years we have conducted leadership development workshops, and written countless articles on the effect, along with the cost.  The interesting aspect of these workshops is the cost of employees taken from their workplace to attend a two to three day workshop.  That cost is significantly higher than our consulting fee.  As the leadership training moves up the organizational ladder, getting people together is more difficult and costly.  Confronted with this challenge, we created a flexible and cost effective alternative to the conventional approach.  

While this may not seem all that revolutionary, considering the industries we work it, the content becomes the important context.  We created an online segment of leadership learning, a combination of video lecture, video clips of content experts, and self-paced learning.  This material can be completed at the convenience of the participant providing they meet the overall completion date.  We also realize that the human interaction and sharing of experiences and learnings are key to successful leadership development, so we schedule a day or even two when we gather the group for an interactive session.  The prerequisite learning has been completed via the online segment, such that an open forum and exchange of ideas and thoughts can progress efficiently.
Then business case is significant. Not only do the participants complete the content portion at their convenience, they have the ability to review content as they wish.  This approach has a huge financial benefit as well as a learning and retention benefits.  Time spent together is high value time with strong interaction with their peers. 

So why is this different than any other online leadership program, it is a tailored program currently designed for the construction and utility industry.  We know that audience, we know many of the challenges they confront and we focus the self-paced learning on areas important to their worlds.  Generic and off-the-shelf sessions lack focus and impact.

So finally, we have a business case, followed by the advantage of more powerful interactive sessions and hopefully an ongoing dialogue between participants that will ultimately strengthen the organization’s leadership profile.

Lessons Learned for Better Leaders and Outcomes #4

Prologue

This is our fourth and final issue of the Ten Lessons Learned from Thirty-Five Years in Consulting written by Joe Bockerstette.  Thus far, we discussed the below eight lessons learned:

       1.  Success depends far more on the client than the consultant.
 2.  Figuring out what’s wrong isn’t that hard.
 3.  Leaders don’t know how work actually gets done.
 4.  Leaders and managers also don’t understand process.
 5.  Companies measure what’s easy, not what’s important.
 6.  Change is simple, just not easy.
 7.  Leaders would rather hire superstars to solve problems than solve problems.
 8.  Industry experience is overrated.

This issue focuses on:

   9. Corporate politics stops improvement

 10. Great clients have a will that delivers successful outcomes.

Summary and closing thoughts

As done in our last issue, we continue to provide case studies from The Inner Circle.  While we will always respect the confidentiality of our relationships, we feel the sharing of the essence of some of our engagements to be illustrative of the issues confronting corporate leaders.

Discussion

#9. Corporate politics stops improvements.

Joe focuses on the inevitable silos that develop within organizations.  Silos created by departmental self-interest that is stronger than corporate objectives. His perspective is based on workflow vs organizational structure, and the fact they rarely coincide once an organization becomes larger and more complex. He also recognizes that the “…organizational silo” is a dominant cultural characteristic in most companies.”  Many books have been written about organizational silos.  Our experience includes a bit more than alignment between workflow and organizational structure.  In the leadership context, we see culture as a major barrier to improvement. Culture includes organizational type/industry, distribution of age of employees within the organization, geography and existing institutional culture. This is not a new phenomenon and have seen it for years.  One of the statements that curls the hair on the back of our necks is “That’s not the way we do it here.” Or another incredible demotivator is when we all the great efforts to design, build and administer a leadership development program; take high performing middle managers, second them once a quarter for three days, give them knowledge and tools only to have them come back and report that when they attempted to implement their newly acquired leadership skills they were overruled by a more senior (in age and position) person.  And when we would attempt to engage the more senior person and provide them with leadership development sessions, they refused.   Seems like retirement, self-protection, ego, and risk weighed more heavily than exploring new ways of moving forward.   It becomes clear, being sent to prestigious training programs is merely a punch on the ticket for future promotion and is not expected to lead to any significant changes and improvements.  “We’ve always done it this way” is the corporate culture and becomes ingrained when most promotions are done from within and outside talent and ideas are not welcomed, since they might bring different ideas and want to do things differently.

We have also seen, particularly from out experience in the utility and related industries, major change only comes after a major problem impacts performance and when regulatory authorities step in and demand change.  Unfortunately in those cases the changes are rushed and are done to meet deadlines rather than to clearly identify and correct inherent problems.

Then there is the corporate power struggle.  A particular department has senior management’s ear, and needs to protect and/or justify their existence, has power over those who perform but in a different silo.  We were involved with a client where one department (we’ll call it Department B) was moving at a healthy pace to provide a service the company needed. Their initiative and performance were enviable.  They were meeting a serious corporate need in an effective and timely manner. The only problem was, the next initiative they were to embark upon was perceived to be under the purview of another department (Department Z). Department Z apparently felt threatened or perhaps imposed upon by Department B.  Department Z had the ear of the CEO and President, while Department B was down the corporate chain.  Needless to say Dept. Z came out on top and was able to stop Dept. B from moving forward.  The interesting piece to this is that Dept. Z then made only token efforts at providing the service they positioned themselves for, plus they did not fully comprehend the scope and breath of the overall needs. The outcome was an anemic effort by Dept. Z where the company as a whole was shorted.  Recent indications are that nothing serious has happened with nothing on the horizon.  So who wins?

There are no real winners and the organizations and the corporation loose.  In many of the industries we have worked with, senior managers were promoted from within.  While this is not bad, but at some point the continual promotion from within creates a stagnant culture where who knows who becomes much more important than what can be done to improve and bring about strategic changes.

#10. Great clients have a will that delivers successful outcomes.

This is where leadership shines.  It is a synergistic effect, not a fill-in the numbers approach. Joe refers to things like decision-making, leadership style and company culture. There is more – the leader sets the stage and tone.  Successful outcomes can be measured in several ways.  The skill is to synergistically bring those key leadership, teambuilding and cultural components together such that the corporate environment is healthy as well as the financial condition of the firm. This queues up our next series, where we will examine leadership entitlement or servitude. 

To conclude this series though, it is important to note here successful outcomes and great clients reflect hard work on the part of corporate leadership.  Hard work that is more than reviewing spreadsheets.  To highlight this comment, several years ago we were working with a telecommunications company.  As part of that project, we developed a rather comprehensive catalogue of Management Competencies. These included the following:

·         Leadership

·         Communication

·         Business Process

·         Problem Solving

·         Interpersonal/Interactive

·         Administrative

·         Business Knowledge

·         Professional Self Development

For each we defined the Skills and Knowledge, Attributes and Experience considered necessary for this group within the company.  While several of these are standard fare, it’s their integration and definition that made the difference.  An example illustrated below is the taxonomy for Professional Self Development.

Professional Self Development	Skills and Knowledge	Description
	Business Knowledge	Demonstrated understanding of telecommunications, systems development and financial controls.
	Time Management	The ability to schedule one’s time in an efficient and effective manner.
	Self-assessment	The ability to analyze and evaluate one’s own ability and performance
	Stress management	Ability to keep control of one’s own feelings and behavior in stressful situations.
	Balancing life priorities	Demonstrated ability to prioritize personal and professional objectives.
	Identify training needs	Incorporated with development plan.
	Development Plan	Ability to identify and accomplish training needed to progress along desired career track.
	Goal Setting	Demonstrated ability to set goals and define expectations and to review performance against goals.

Professional Self Development	Attributes	Description
	Self-awareness	Maintains a system of self-checks including a network where feedback can be received.  The self-checks and feedback become the roadmap for continuous improvement.
	Initiative	Initiative is taking responsibility and action when not required or expected, being a self-starter, a leader, one who overcomes obstacles and continually works toward improving oneself.  It is a desire and a motivator that eliminates complacency.
	Motivation to change	Displays a high energy level, explores new ways of doing things, and is not threatened by the prospects of change in the organization.  Change is perceived as an opportunity for growth and development.
	Open minded	Not limited to one’s own perspective or position on any issue.  This does not mean concurrence, but it does mean an appreciation that other people can have differing opinions and positions on issues.  Also the ability to consider the merits or drawbacks of other people’s options and positions.
	Willing to accept feedback	Understands feedback to be constructive and a mechanism for improvement rather than criticism.  Uses the feedback as part of an overall developmental or professional improvement strategy.
	Risk taker	The true role of management is to make risk-taking possible.  Managers must provide the environment for creativity to flourish. (excerpted from Edwin Diamond)  Risk taking must be prudent.  As a manager the guidelines for prudence as well as the consequence and/or rewards for taking risks must be established.
	Self-confident	Knowing ones strengths and weaknesses, and using the strengths as appropriate while continuously striving to improve the weaknesses.

 

Professional Self Development	Experience	Description
	Exposure to methodologies /behavioral sciences	Select seminars, audiotapes, workshops and/or books on topics such as organizational psychology, behavioral sciences.  Read other texts that stimulate different thinking such as Daniel Goleman’s Emotional Intelligence or Senge’s The Fifth Discipline.
	Achieve advancement (responsibility, span of work, growth/development)	Actively pursue a broader scope of responsibility.  Demonstrate ability to successfully perform more demanding level of work.  Seek opportunities to enhance your superior’s success because of your contributions.
	Professional certifications	Maintain an ongoing initiative to gain professional certifications, or additional responsibilities within professional organizations that enhance your visibility and credibility within your area of professional expertise or into other areas consistent with your professional goals.

The overall scheme became the overarching framework this group could both strive toward, as well as measure their progress.  But, the important note here is the level of commitment on the part of that company’s leadership to make this happen.  We continually remind our leadership session attendees “There is a difference between Interest and Commitment.  When you’re Interested in doing something, you do it only when it’s convenient.  When you’re Committed to something, you accept no excuses, only results.” Based on all this we might suggest when Joe says a ‘will that delivers successful outcomes;’ behind that is a framework of synergistic competencies coupled with a commitment leading toward a healthy and financially strong organization.

Summary

Most of our articles this year have tried to expand upon Joe Bockerstette’s list of “Ten Lessons Learned from 35 Years of Consulting.”  We felt this was a timely topic worthy of expansion; and our experiences certainly aligned with Joe’s.  Our purpose is to present ideas to get leaders thinking about themselves and their organizations and how they can help the organization move forward and improve.  Not every topic applies to every leader, but identify those that do (or should) apply to you and think about how a particular topic impacts you and your organization and what you can do to turn that topic into a strength.

We thank Joe Bockerstette for his work and allowing us to expand on it.  We will be back after the holidays with our next article where we will be looking at Leadership Entitlement – what is it and how does it impact organizations.

Inner Circle Case Study

The Inner Circle column in our June issue of UPDATE discussed an engagement where a CEO, whom we know, approached one of our principals, requesting time to spend with him.  As we reported, this engagement consisted of the CEO visiting our principal and spending time with him one-on-one in an unstructured and relaxing context.  Our Inner Circle strategy was to listen and be there.  It worked.  There is a follow-on to this engagement.  The same CEO invited our principal to visit him.  In an attempt to prepare we did some research.  The CEO leads a significant 501-C3 organization.

At the Inner Circle, we believe in the practice of benchmarking.  It is incumbent upon us to know about comparable organizations, their size, revenue, ratings etc.   For 501-C3 organizations that survive on donations and community support; knowing how the organization rates as compared with other non-profits is essential.  People do not donate to organizations that don’t exhibit responsible management, enlightened leadership and are viewed by their constituents as worthy to receive large donations. Our research indicated that this particular non-profit had a marginal rating.  Something the CEO was unaware of.  Other non-profits in the geographical area were rated higher. 

During this second engagement we presented this information and the potential consequences.  The initial reaction was one of surprise followed by the realization that in order to build a solid giving foundation the rating had to be increased.  In order to build this foundation a significant improvement and development initiative is needed.  The key point here is the value an Inner Circle engagement provides.   

In general, 501 C3s as non-profits are perceived as not having to worry about business issues. They have admissions to museums, contributions from wealthy donors, grants etc.  Nothing could be further from the truth.  Non-profits have very serious business issues, particularly when competing for dollars with other non-profits.  Giving strategies are complex and difficult to plan and manage.  So, when faced with the choice of giving to one or another organization, being viewed and rated as responsible and of significant value to the community is essential. 

In summary, as our story continues, the Inner Circle brought a significant value proposition to the CEO, arming him with information that hopefully will impact his short and long term strategies to build an organization worthy of a solid giving strategy and in the future a strong endowment.

Lessons Learned for Better Leaders and Outcomes #3

Prologue

This is our third issue where we continue to develop the concepts of the Ten Lessons Learned from Thirty-Five Years in Consulting written by Joe Bockerstette.  Thus far, we discussed the below five lessons learned:

1.       Success depends far more on the client than the consultant.

2.       Figuring out what’s wrong isn’t that hard.

3.       Leaders don’t know how work actually gets done.

4.       Leaders and managers also don’t understand process.

5.       Companies measure what’s easy, not what’s important.

This issue focuses on:

6.       Change is simple, just not easy.

7.       Leaders would rather hire superstars to solve problems than solve problems.

8.       Industry experience is overrated.

As done in our last issue, we continue to provide case studies from The Inner Circle.  While we will always respect the confidentiality of our relationships, we feel the sharing of the essence of some of our engagements to be illustrative of the issues confronting corporate leaders.

Discussion

#6 Change is simple, just not easy

If you have lived through a major change initiative, you understand this statement probably too well.  If you have never experienced a major change initiative, you may be scratching you head asking how it can be simple but not easy.  We human beings generally do not handle change well.  We like our routines and doing things the way we have always done them.  However, as we have written many times in our Update articles, an organization does not improve or come close to real success by doing the same thing year after year and not taking a close look at how things are being done and the tools used.

We define an organization as being made of three parts – People, Processes and Technology.  In the past, and probably a very small number of organizations today, technology was not necessarily a key aspect.  Today it not only is important but, in many cases, it is the driver of the organization.   We have been involved with many cases where a major change initiative was needed because of the implementation of new software.  That software change may make the existing organization and processes out-of-synch with the requirements of the software.  Change is needed.  Simple right?  Just change the functions and the processes as needed.  Wrong!  The organization dictated the technology change to align themselves with their vision of a successful and profitable future.  However, the people who needed to make it work did not want to see changes in what they did, whom they did it with and how it was done.  In other words, there is generally resistance (at least initially) to changing people and processes.  Sometimes this resistance is very direct and very vocal (overt).  Then there are times when the resistance is an undercurrent that gathers strength and attempts to short circuit or subvert the changes (covert).

Regardless of the trigger of the change – new software or a new corporate initiative – the change will only be successful if it is presented, implemented and measured properly with full and active support from the whole senior management team. 

There have been many books written, many courses offered and many consulting firms ready to guide you through a change initiative.  There is, of course, no one size fits all solution and no “best” approach.  Each organization is different and each needs to develop a change initiative that best fits the culture and the nature of the business.  Regardless of the specific approach taken, there are some basics of change management.

·         Understand why the change is needed.  This must be defined so that all layers of the organization can understand.  People hate change, but if they must change, make certain they can see the long-term benefit, can understand where they fit in the overall scheme and can understand the need to change.  An important factor to evaluate is the impact of this change on the culture of the organization.

·         Establish a sense of urgency.  Without this, many will just keep on doing the same thing and decide to “wait this thing out.”  But, don’t just establish a timeline without taking into account not just the technology or process side but also the people side.  It has to be a realistic timeline.

·         Start at the top of the organization and involve every layer.  We can’t emphasize enough the necessity of getting full and active commitment and support from the top of the organization.  We have seen cases where the CEO said he was committed and then put out the most unenthusiastic video to all employees.  The employees could readily see the lack of enthusiasm and developed the same blasé approach.  If all layers of senior management again do not actively and positively support the initiative, it will die a slow death.

·         The next most critical step is to communicate – clearly, accurately, honestly and frequently.  You cannot communicate enough.  It shows the urgency, sells the business case and most importantly reaches to all levels of the organization.  This is another instance of it’s simple but not easy.  In fact, it is complex and difficult.  However, building and implementing an honest communication plan is a key step that is often underestimated.

·         Look to build change champions at all levels.  Identify key people who have influence in the various levels of the organization.  Spend time with those key people and bring them into the planning.  Build their trust in the initiative.  Be patient.  Not all key people will jump right on board.  They need to be educated on the need for change.  They need to be stroked.  They need to be empowered.  If you can build champions among the key player at each level there is a good chance change will be successful.

·         Build measures that will accurately show progress toward implementing the change.  Don’t just have overall measures.  Develop measures at each level, including, if appropriate, interim measures so progress can be seen on the road to full implementation.  Identify small victories and celebrate those victories.  Interim steps are critical to reaching the end goal.  Make a big deal out of achieving interim steps.

·         Plan for some missteps along the way.  Not everything will go smoothly.  There will be mistakes.  There will be some holdouts, who either will overtly or covertly try to block success.  Expect those and try to use those instances as learning tools, but also don’t sacrifice the initiative for a few who refuse to support it.

See change is simple!  However, it certainly isn’t easy.

#7 Leaders would rather hire superstars to solve problems than solve problems.

Perhaps one of the largest hurdles we confront in our business is our smallness. While we are getting smarter, in the past, we opted to bid on larger projects we were completely comfortable in being able to complete successfully, because we had a strong network of professionals who could supplement our smallness. While successful in some, we were often considered too small to support the project.  The reality was we were viewed as too small to be able to blame or sue if something went wrong.  The other consideration here is that whomever was looking for the support owned the project, so they were in line too, but the contractor provided a buffer.

When looking inside an organization, similar situations exist.  We have always been proponents of looking within for solutions to problems.  In our work, we find the answers reside with those closest to the problem.  To a leader that can be a threat, although it certainly should not be.  Embracing this concept, places other demands on leaders – they have to lead.  Monitoring a computer screen with financials and metrics is fine, but to address serious issues and problems, a leader has to be close to their people.  A classic dilemma of meeting the dreaded quarterly reporting requirements or leading and learning from those closest to the work.  Worse yet, finding the best person who is closest to the issue and empowering them to fix it.  That too takes leadership skills, and as the leader, you still own it.

The expeditious alternative is to hire someone to take the issue.  A few dynamics come into play.  By hiring someone, the monkey off the leader’s back, but if the leader makes a not-so-good hire, the leader still owns it, which increases the leader’s risk profile.  So far, none of these options really releases the leader of anything.  Up to now, the leader is in the direct line of culpability and resulting consequences.  With all this said, the easiest and most expeditious thing to do is to hire a superstar. By hiring a superstar, the leader demonstrates his or hers leadership acumen to either the BOD or anyone above in the chain of command. Such a stellar choice reduces the leader’s exposure if something doesn’t work out as expected or desired.  The blame and resulting consequences are shifted away.  The worst outcome for the leader who made the selection is some disruption to the organization and some cost consequences; otherwise, he or she is insulated.

In summary, solving problems can be a daunting challenge to leaders.  Looking at spreadsheets is easy, and numbers can be manipulated (believe me we have seen how manipulating numbers relieves pressure in the short term).  Managing the business processes, knowing the business and the people who make the organization tick requires getting out into the organization and working the problems.  As a leader, lead those who can make a difference, empower people, and hold them accountable.  These all take energy, but yield great returns.  Attempting to shift risk to someone else is a weak leadership tactic.  Soliciting insights from experts that guide your thoughts and actions is a very sound tactic, but as a leader you must own the issue and it’s solution.

#8 Industry experience is overrated.

Within the context of leadership, industry experience is a very interesting consideration.  One of the classic leadership stories of the ‘Turnaround’ era was that of Al Dunlap, CEO of Crown Zellerbach, Scott Paper and then Sunbeam.  This story goes both ways.  In the paper world for the 1980s and 1990s, Al Dunlap, more commonly known as ‘Chainsaw Al’ because he would turnaround these paper companies by slashing people, assets and anything else he could.  “For a while, things were good in the career of Al Dunlap. He turned Scott Paper and Crown Zellerbach into profitable companies by ruining thousands of lives, selling off the corporate scraps, and making millions for himself in the process.”¹ Sunbeam hired Al because of his “reputation” as a turnaround guru, but he failed miserably.  In the paper-manufacturing world, he may have been a stockholder’s dream, but in consumer products world the culture was quite different as was the industry.  Adding to his problems, he seriously ‘cooked the books.’  “Dunlap was fired, sued, and sued some more. Old success stories were debunked. Sunbeam went bankrupt.  And Al Dunlap never worked as a CEO again.”²

What does this have to do with industry experience?  Joe Bockerstette’s position is that business processes are surprisingly consistent and stable across a wide range of industries, business models and company sizes. Indicating that, because of this level of commonality, it doesn’t matter much if leaders have industry experience and in contrast an influx of new ideas is valuable.  We concur with Joe, but we take a bit further from a leadership perspective, we feel context is keenly important.  Industry experience perpetuates industry culture in most cases. Therefore, if change is truly desired, maybe industry experience is not the answer.  Therefore, taking into account Joe’s comment about the commonality, having a leader who understands people, leadership and management, as well as the context of an organization and its culture is a far better predictor of success.  This relates to the above discussion in that finding the right leader who has the attributes, experience and knowledge can be a challenge.  We believe the effort is well worth it.  The alternative can be, and in most cases deteriorates into a less than desirable outcome for the company and their employees.

Inner Circle Case Study

Our most recent Inner Circle case study has to do with a leader, essentially an insulated and isolated leader. As indicated previously, we sanitize these case studies to protect the confidentiality of our clients. This happens to be a not-for-profit entity.  These types of organizations are unique for several reasons.  Many do not have the traditional organizational hierarchy.  For instance, there probably is a Human Resource function, a financial person/treasurer, and maybe an operational person.  Most have a board of trustees who oversee the organization.  The CEO or leader is fairly insulated, and in some not-for-profits, has to deal with some confidential issues which are not typically discussed with the board. This is a perfect stage for the Inner Circle.

For this case study, the CEO was mentoring a person who possessed the capabilities to assist the CEO in many of the routine functions and tasks on a day-to-day basis, as well as support the CEO in major activities and functions.  We might refer to this person as a ‘right-hand-man’ who had many of the qualifications of the CEO but not the experience or depth of knowledge; a perfect mentoring relationship.  Unfortunately the mentee felt there was a disconnect between the two of them, apparently, a rather deep philosophical divide; and one day decided to pack-up and leave.  No discussion, nothing.  When we say being a CEO is a lonely job, this situation is perhaps one of the worst.  The haunting thoughts of what went wrong, why and how did the CEO fail this person, and why should the departure be so harsh in the sense of no communication? 

This CEO knew of the Inner Circle and called; first to share the shock and disappointment of the event.  A person who they thought was close and had common perspectives and values had just departed without notice of any kind. Our first order was to listen, as we did.  The next order was to provide a framework and define the goal such that the CEO could structure their thinking.  Without this framework and goal, coupled with the anguish of the situation makes sorting out any form of a solution difficult. In essence, we helped guide the CEO’s problem solving thinking.  The CEO needs to develop the solution, we can only guide, advise and challenge their thinking until a solution becomes evident.  This engagement is ongoing, and, at this point, we feel the CEO has a grasp on the situation with initial ‘next steps’ to embark upon.  Once those steps happen, we reassess the situation and develop future actions.  

A quick word about ‘the goal.’  Deciding whether effort should be expended, and what the potential end-point is seriously important.  Many times we assume a goal without challenging our thinking, pursue the goal only to find out it’s the wrong goal.  The Inner Circle is uniquely suited to validate such goals.  We know when a goal is either unrealistic or improperly focused.  We are sufficiently removed from the emotion of the situation to drill down into the unemotional issues and formulate a realistic strategy toward a well-defined goal.