Wednesday, August 22, 2012

The Characteristics of a Leader


In his article entitled “Leadership, Controllership, and Wimpership,” Paul E. Hadinger has identified three basic management styles of those holding positions of authority and power over others in a company setting.  In the article, the author is able to easily identify the characteristics of both controllers and wimps, but understandably struggles with identifying a similar list for the characteristics of a leader. 

Since reading the article, I have been considering this issue – why is it so difficult to spell out more precisely the characteristics of a leader?  Before coming to this, perhaps a review of the author’s comments regarding controllers and wimps is in order.

The one phrase from the article that struck me as the most accurate description of a controller is “…controllers seem to want to know about as many things as possible in case anything could become a threat or a challenge to their power and control (and their personal security).”

The author identifies many possible character deficiencies in controllers, some of which are certain to be found in such a manager.  I will not reproduce the list here, but it is worth a review.  In my experience the key is that controllers like to control.  Controllers desire to dictate, to make every decision, to be sure to be involved and knowledgeable about every activity of those over which he has authority.  The controller desires that all good results are seen by his superiors as having come from him

As to wimps, the fundamental characteristic is that these types of managers have difficulty with conflict.  They want to go along and get along, avoiding difficult decisions.

Coming to leaders, the author does not have an exhaustive list as he does for the other two types.  However, he captures some of the critical characteristics of a leader:

A true leader commands respect by not only how he or she functions as a leader, but by being a person of integrity and good character whose words and actions can be trusted, and one who can be counted upon to be fair on a consistent basis.

Anyone who is successful as a leader usually has very good communication skills, and is able to achieve shared understanding with those with whom he speaks. Good communication skills are also required to mentor and teach others to become better leaders and better employees. A leader talks WITH people, not AT them.

When one considers the characteristics of a good leader, one must look at it from the point of view of those being led – those to whom the leader reports are not seeing (and cannot see) the most important leadership skills in action.  What is it that employees are looking for from their day-to-day leader?  In my experience, some of the keys include consistency in objectives, focus, regular and honest communication, leeway about getting a job done and deciding priorities, and a true establishment of the principle that we are all in this together.  It goes without saying that above-average general business skills are a mandatory requirement for anyone rising to such a position.

What strikes me is that while the positive aspects of the controller’s skills are visible to (and valued by) those to whom the controller reports, the positive aspects of the leader’s skills are primarily visible to (and valued by) those who report to the leader.  Conversely, the controller is at best tolerated (at worst despised) by many of those reporting to him, while the leader is willingly followed and genuinely respected by his employees. 

The difference in employee attitude and behavior toward these two types is usually invisible to those to whom the leader or controller reports (board / shareholders).  Even if a board member has the opportunity to observe the interaction between a manager and his employees, it is only possible to discern the manager’s style if one is attuned to subtle cues in the interaction.  And likely these would only be visible to the board member if he also has the characteristics of a leader.

Consider the controller – on top of every detail, making every decision, disallowing conflicting discussion – what a horrendously discouraging environment in which to work!  However, such a manager is able to answer every question posed to him by bankers, shareholders, and board members.  He really looks on top of things – decisive, action oriented, aggressive, and knowledgeable.  Unfortunately for the company, this is possible only because there are no answers other than his answers; there is no activity other than activity directed by him.  All information and decisions flow through the controller.

A controller might be able to function effectively in a small and less complex setting – a department, a single manufacturing plant, an organization with only a few variables.  A controller can even function in a subset of a larger organization (as the manager of one division or group of a multi-division company, for example), as there are support systems and other functions inherently outside of his control – in other words, the controller’s scope is limited and held in check by other competing or controlling factions.

Alternatively, consider the leader – once he has established proper objectives, guidelines, and incentives, once he ensures that proper training (via his constant and effective communication) has resulted in proper business decision-making skills, he allows decisions and authority to be executed at the lowest points possible within the organization.  This is valuable in any organization, but it is imperative in more complex situations. 

The leader understands that once he has established processes and ground-rules, the organization will operate best if authority is driven to the lowest point possible – without every action needing blessing or approval from above.  He will gain the respect of the organization because he has shown respect in the capabilities of those reporting to him.  His actions result in a more effective organization – not because he has better individual employees (in any large organization the bell curve applies), but because he has created a team.

A leader cannot answer every question because there are too many actions being implemented every day for him to properly manage – and the leader is self-confident enough to not be concerned by this and to not be concerned that others see this.  He realizes that his organization will be far more effective – with satisfying career opportunities for his employees – than it ever could be had he implemented his role as a gatekeeper.  Most importantly, he knows that the results achieved will be far greater than if he tried to direct and remain on top of every project, action, and decision.

How is this to be made visible to board members and shareholders tasked with finding someone to lead their organization?  Most focus solely on results – and it is certainly possible that a controller can beat the numbers in one situation and for a leader to miss the numbers in another.  It isn’t a question solely of numbers – it takes no effort or wisdom to measure performance to budget.  However, it does take effort to understand the reasons behind performance – both good and bad.

Results are important.  Resume is important.  However, the differentiator – the added insurance – is to find a leader.  In all cases, the organization will perform better under a leader than it will under a controller.  It will do this not because of characteristics easily seen by the board or shareholders, but for characteristics easily seen and most important to the employees.

Certainly, focus on results and focus on resume.  But to identify a leader, you must find out the “how” and the “why”?  This takes some real effort.  Unfortunately, it often takes being a leader oneself or at least having seen and appreciated a leader in action – usually from the position of having been led.

Find out how the manager communicates with employees, including how he expects supervisors to interact with employees.  Does he look for answers from the bottom up?  Is he only talking to a few, trusted confidants, or is he open to dialogue with all?  Do the hourly workers know that they have power to get management to move?  If so, ask him to demonstrate how he specifically puts this in action – not words, but structure and accountability.

Understand his views on incentive systems.  Is his personal incentive based on the same system and formula that his team has?  Is it all for one and one for all – in other words, all get paid or none get paid?  Or does he set up a plan where some get paid (him) while others do not (them)?

What of objectives and focus?  Does the manager keep the list small and consistent?  What is the list?  Is it understandable and understood by the entire organization?  How does the manager translate this into meaning for all of the complexities found in any large enterprise? 

Find out how the leader trains his subordinates and employees.  Does he view this as one of his primary responsibilities?  Can he even describe this without referring to Human Resources or outside consultants?

Understand these and you will understand if you have a leader.  Focus only on results or resume, and odds are you will likely end up with a controller – there are far more of them, and they sound very impressive

Wednesday, June 6, 2012

Getting Superior Performance from Ordinary People

In response to a posting at LinkedIn:

The author of the subject article covers several of the key factors that are necessary in getting superior performance from ordinary people.  He begins, however, with what I believe to be a faulty premise:

As leaders, we all want a team of superstars.

Is this really true?  Don’t we want a few pluggers – the hard working types that make every organization function?  More so, do leaders spend any energy wanting something that cannot be?  Outside of the theoretical sciences, I am not sure where a team of superstars is desirable – let alone achievable.

Fortunately, he recognizes the low probability of this “want” quickly enough.  Getting superior performance from ordinary people is an inherent job of any leader in almost every organization of size.

But by definition, there are more ordinary performers in the world than there are extraordinary, and Murphy’s Law ensures that they always wind up on your team. The result: You’ve got a group of average, normal people that must take on formidable challenges.

This is quite true, but it isn’t because of Murphy’s Law – it is because, on average, any group of some size will be made up of the average: some higher, some lower. 

The author now gets to his recommendations:

Educate.

This is quite right.  However this takes significant time and commitment on the part of the leader.  It will also require the leader to stand up to pressure from those who feel that getting decisions made quicker are more important than educating the team.

I found the most effective method to educate the team was through meetings involving a broad group – a group much larger than those strictly impacted or knowledgeable about the immediate decision at hand.  For those not immediately impacted by the decision, they often found this a waste of time.  The meetings were not only about coming to a decision, but subtly about training management on methods they could use within their own decision-making process.   The meetings offered lessons about how to come to a right decision (I say “a right decision,” not “the right decision” because there is often not just one right decision).  What questions were asked?  How were other members brought into the discussion? How did others see that this decision might impact their customers, or how could they use this thinking to work differently within their department?  Over time, the value of this type of training was apparent even to some of the more hardened skeptics.

When I initially received complaints about the wasted time in these meetings, I would suggest that “you used to complain that the prior management wouldn’t listen to you, now you complain that I am soliciting your input – and that I want your input heard by the entire management team.  Which is it, because you can’t have it both ways?”

Set expectations.

For me, this is about being consistent with the objectives.  Keep the objectives simple and understandable.  This ensures the greatest number of people will be able to actively work toward achieving the objectives.

The best objectives I found were simple financial objectives.  Cash flow, debt reduction, sales or order growth.  Initially this would be met with an attitude of “you only care about the customer; you don’t care about quality, or customer relationships, or employee relationships.” 

I spent time educating management on how every action they take effects these concerns:  is profitability better or worse when quality is better?  Is cash flow improved when customer relationships are good?  Again, this takes time to meet with and discuss with enough employees such that this understanding permeates an organization.  But it will.

Empower. As you begin to see that the team is on the right path, empower the folks who have leadership potential to continually improve upon the plan and keep it on the right course.

In this case, I cannot say it better than the author has done.  His words suffice.

Stay the course.

Again, consistency.  Don’t be swayed by the latest fad, or “sky-is-falling” calamity.

I believe the author has left out what, to me, is the most important requirement – the one that is the glue that brings all the rest together: establishing an effective set of incentive plans that binds the entire team together.

Monday, April 30, 2012

The Executive Chairman


In response to a question at LinkedIn:

How can an Executive Chairman effectively navigate contact with company executives and his CEO?                    


I have sat in both roles - as an Executive Chairman, actively engaged with management, and as a non-executive Chairman with a more traditional relationship.

In the Executive Chairman role, the situation was a turnaround of an overseas-headquartered company, with the company acquired out of bankruptcy.  Most of the management team was new to the company, or coming in after serving in a contract relationship with the company.  The CEO we brought in had not had a previous executive position.  The sponsor looked to me to ensure the success of the company.

I will suggest that the only way I can see such a relationship work is if a) both the Executive Chairman and the CEO understand and accept the boundaries between the positions, and b) as the CEO demonstrates success, the boundaries are visibly shifted, with the possibility and likelihood that the roles will one day convert to traditional roles – frankly, as the CEO demonstrates success, the roles must convert to traditional roles.  I do not see such a relationship as being permanent.  If it is successful, it must evolve as I describe here.  If it is unsuccessful, one of the two must depart as one of the two is not properly growing into and evolving the role.

The possibility and method to achieve this transition should be openly discussed at the board and with executive management, such that there is accountability and buy-in from all directly affected by this non-standard relationship.  This, then, places accountability on both the CEO and Chairman – for the CEO, he now has a roadmap he must meet to achieve further autonomy; and for the Chairman, he now has made clear his obligation to eliminate the “Executive” portion of his role as the CEO grows into the full position.