What Every CEO Wants: Creativity, Integrity and Perspective

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It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date.
– Roger von Oech

IBM conducted a study this year in which they asked 1500 CEOs, in face to face interviews, what skills were of paramount importance for the leaders in their organizations, to their business and global competitiveness. You can read the entire study here, but in a nutshell, this is what CEOs care about.

The premise of the study is that change is accelerating and complexity is deepening in all markets around the world. As the world has become increasingly volatile and the future ambiguous, there remain a powerful minority of companies globally that have been able to capitalize on these seismic changes and turn this turbulence into innovation and advantage. These are the keys:

1. Creativity. Yes – your creativity, initiative, inventiveness and passion. More than ever, people have wholly transparant real-time access to relative value and price to the market goods, services that companies are providing, and our ability and willingness to bring our creativity to work can become the discerning factor. Remember 3M famously created post-it notes by allowing people in the organization to express their own creativity. From 3M to Google to Atlassian, some of the most powerful innovations have come from the bottom up within business cultures where, autonomy is offered, creativity encouraged, and ideas flourish.

2. Integrity. I recently had an interaction, and conducted a workshop with a group of women executives at an insurance and financial services group. A running theme throughout the attendees was the challenge of ‘being everything to everyone.’ That is, being the great mom, partner, executive, community service contributor, etc… Here’s a piece of advice I believe from Rick Warren, author of The Purpose-Driven Life. When we think of our life, it’s common to think of ourselves as having different lives – the workout life, the professional life, the partner and spouse life, the parent life, etc. – when in fact we have but one life to live. My encouragement is to give permission to ourselves, and everyone around us to bring our whole selves to every endeavor. The etymology of Integrity is from the Latin integer, meaning whole, oneness. Recognize that each of us is but one person with a rich history and present, and future, and to bring our whole selves to everything we do represents our greatest contribution, and our greatest opportunity to draw from our own rich experience and apply to everything we do.

3. Globalization #3 in importance, in terms of creative leadership was the ability to think globally. One key aspect of thinking globally is to borrow brilliance from all sectors. One finding of the study was that CEOs wanted creative leaders to borrow disruption models from other industries and market sectors. If you are in the IT business, don’t benchmark what other IT business are doing. Go out and borrow ideas from the toy industry or maybe the microlending community – just something outside your usual purview.

Finally “act despite uncertainly.” Yes there is much ambiguity, and yes it can often feel better to wait until things shake out before committing a particular direction. But increasingly CEOs want creative leaders to be taking risks. Acting while others hesitate can pay off. The key to a successful jump is to follow your true convictions and beliefs.

Believe You Can Change the World

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Michael Stallard first told me this true story.  U2 is an anomaly in the world of rock music, right?  The world is littered with rock bands who make it and break up, or don’t make it and break up – all caught in the throes of egos battles or conflicting opinions and ideas, or maybe just awash in money and lose the storyline of the band and it’s identity.  From the beginning U2 said once “music can change the world because it can change people.”  The strength of the band’s identity and commitment to each other has driven the success.  The success has not driven the success.

In 1974 Bono’s mother died unexpectedly of a brain hemorrhage, which left his father to hold together the family, and as Bono describes it, he felt alone during the experience.  Just a couple years later in 1978, his friend and drummer Larry Mullen lost his mother in a car accident, which left Larry devastated.  Lost in that pain, Bono was present to help his friend heal emotionally.  Again in 1990 his dear friend and band mate The Edge went through an emotionally difficult divorce with his wife, and again the band rallied around the core group to support and find solidarity and kinship.  During that same time the bassist, Adam Clayton was working through debilitating drug and alcohol addictions which left him unable to play a signature live concert from Sydney, Australia to be televised around the world. Yet again the band slowed down, and took a break to support one of their own.

In 1987 the band was playing a concert in Tempe, AZ to celebrate the Reverend Martin Luther King.  Their song, “Pride” is a tribute to MLK and the band had been receiving consistent death threats from someone who claimed they would be present in the audience, and if they played that song, there would be an attempt to assassinate Bono.  The FBI declared the threat credible and advised the band not to play, and certainly not to play that signature song.

As Bono recalls, as he entered the third verse, “Early morning, April 4.  A shot rings out in the Memphis sky…” he closed his eyes not knowing what would happen.  When he opened his eyes, Adam Clayton was standing directly in front of him.

In your life, in your work, you might not be in a rock band galvanized by hardship and triumph.  Yet consider the power of finding that storyline that binds – beyond finding that next quarter profit or hitting the upcoming deadline.  The message by analogy must be: focus on building each other first.  Grow everyone in your path.

Be Careful What You Expect

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James K. Harter, Ph.D., the chief scientist of workplace management at Gallup has been investigating the manager-employee relationship and the role stress plays for some years now. His team has found that the quality of our relationships with our managers, and our perception of our workplace as a positive or negative environment can predict, and contribute to, up to 30% of the heart disease that we actually develop. That’s how powerful these relationships are, such that they affect our own health.

A related Yale School of Management study revealed that simply by changing very small things about how managers interact with their teams, and the expectations they have, they can create immense performance differences. For example, in one phase of the study managers were asked to deliver a script read in a negative, neutral, or stressful tone. A second group of managers was asked to deliver the same message in a cheerful or positive tone of voice. As you might expect, the first group not only participated in a more negative and less productive discussion following, but they also understood and comprehended less. The other teams not only were more productive, but they reported enjoying their work more. Imagine that. And remember, both groups were told the exact same information.

Shawn Achor and his team at Harvard conducted another related study in which they identified individual managers in a large group as having either a “theory x” disposition or a ‘theory y” disposition. Theory X managers believed that employees essentially found work to be toiling, only performed for the money, and had to be constantly watched or they wouldn’t perform. Theory Y managers believed that people were intrinsically motivated, creative, and could best decide how to get their work done with little supervision. What they found was that Theory X managers had Theory X employees, and Theory Y managers had Theory Y employees. Interestingly, as they followed these managers over time as they moved into leading different teams, the researchers found that the managers had the ability to change the orientation of the people on their team. That is, a Theory X manager could inherit a Theory Y team and turn them into Theory X employees.

This is the Pygmalion effect in which you get what you expect. Some of the more classic experiments by Robert Rosenthal involved telling teachers that particular students (selected randomly) were exceptional and very intelligent. The teachers then changed their attitudes toward those children, expected them to perform better, and they did. It turns out, the teacher’s biased expectations had real-life actual effects.

Expect the best.

The Walk is Part of the Gift

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This true story was told to me by Jo Radner.  Years ago Mary was a young woman working in the Peace Corps in Africa.  She befriended Abena from a local village who had endured a string of hardships including the loss of her husband to tribal feuds and lost a child from malaria.  Mary spent a much of her energy between her work duties to nurture Abena to health and support her family with food, company, and hope.  Abena was a skilled weaver and later, with new-found energy, spent her off hours gathering trace pieces of cloth and thread and fabric to weave a beautiful small tapestry as a gift of thanks for Mary’s birthday.

When Mary’s birthday arrived, Abena filled her skin with water and set off on the five mile journey to deliver her gift. The sun was strong and hot winds blew in her face and parched her lips.  She finished her water only halfway on her walk and arrived exhausted.  Mary greeted her with cool towels for her feet and water to drink.  They spent the afternoon sharing stories of their families, their hopes and dreams.

As the evening light approached Abena rose to leave.  Mary filled her skin with fresh water from the well and called for a mule-cart to bring Abena back to her village.  Abena stopped her gently, “Please understand your generosity is not necessary.  Understand that my walk is part of the gift.”

Let all of our efforts of gratitude be in the walk.  Enjoy.

Five Expectations of Great Managers

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“The culture defines the outcome.” – Eric Schmidt, CEO Google

I recently had an interview with Nick Kugenthiran, CEO of Fuji Xerox Australia who poses five expectations of his managers. But before the big five, everyone needs to be on the same page. Nick first creates a sense of shared vision with a short collaborative exercise: with your team write the headlines, the press release you want to see in five years.  Each should start independently and then compare notes. In his experience, once you reconvene, the team will immediately see intersections of vision once each person shares their personal perspective of the future. Next build on these points of intersection until the intended outcome becomes crystallized, shared and sincere. In such an exercise, with gentle non-intrusive guidance from senior leadership, the vision quickly becomes once of shared construction. Everyone had a part in the vision creation.

It’s at this point that a senior leader can build upon a shared vision to deliver the five great actionable expectations of managers:

  1. Lead Change: Take the lead.  Leading the change toward the shared vision will entail taking chances, and that needs to be expected. Make it clear that you expect both risk and tolerable failure – above the waterline failure. Above the waterline means the scope of the risk, and potential downside, remains above the waterline and unable to sink the ship.
  2. Act on Principle: The second expectation is that the initiatives and correlating risk and behavior is founded in the values and integrity of the team and organization. It should be abundantly clear that risk and initiative is expected and always safe if executed in full faith of the team’s articulated values. In Nick’s case at Fuji Xerox, their mandate is that business initiatives should be servant to What is Good for People (to be an employer of choice), Good for Planet, and Good for Profit (their target is 80% recurrent business)
  3. Build Capability: On the path to innovation and value development, the best managers continue to build company capability. Be it new solution options for customers, new tweaks to the delivery code… In Nick’s case, as the General Manager of a global Fortune 500 company, his vision includes gestating new leading capability which can be tested on a regional basis and then elevated to a global community of solutions.
  4. Be Clear About What Is Not Changing: People need to understand there are solid underpinnings upon which we base our change initiatives – the rock-solid things we can count on. It’s fine to emphasize bold decision-making on the frontiers of growth but people need to understand they are indeed supported by sound business integrity, and team values.
  5. Reward Execution: Make it clear we reward execution and results. Period. After the values talk, the engagement and collaboration emphasis, it must be clear that since we are the owners of our destiny, execution becomes the highest expectation and reward of valued managers, business owners, and contributors.

Nick reminds us that these expectations require continual renewal – it’s not a one-shot exercise and conversation.  Nick is one of the best EchoLeaders around – one who has found his own voice, recognizes his strengths, and builds powerful echoes within his team.  Echoes only sustain when reinforced.

Bring on Type-Ts

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Type-T is a phrase coined by Frank Farley, University of Wisconsin, in the early 1990s to describe people who seek out and participate in higher risk activities, and succeed because of these efforts. These are the kinds of people who – if they avoid self-destructive Icarus behaviors (think Keith Moon, Janis Joplin, Howard Hughes, although each in their own right redefined music and entrepreneurialism before flaming out) – go on to invent cars, build businesses, construct new surgical techniques, and much more. Big-T people like Erik Weihenmeyer or Richard Branson redefine our understanding of the limits of possibility, while creating businesses, inspiring people, and building jobs and value. Type-Ts aren’t always about more, faster, higher, but also about reinventing and redefining the how – which leads to invention. Type-Ts are our primary Creators.

Did you know 52% of the IT start-ups in Silicon Valley and 25% of all new business in the U.S. are created by foreign-born nationals like Indians, Pakistanis, Chinese, Vietnamese, and other people from around the world who have been coming to the U.S. for decades for the promise of education and entrepreneurialism, and so have earned science, engineering, and math degrees, and created a tremendous amount of U.S. jobs, invention and competitive wealth. Currently, the U.S. has sharply limited the number of H1b visas from 200,000 to 65,000 granted to foreign-born applicants. And currently there is a waiting line of over 1 million applicants. But even if you waited in line for your visa, you might still be turned down for a job from leading U.S. based multinationals due to some newly instituted policies favoring domestic U.S. citizens in hiring review.

The world is changing and if we persist in this xenophobic manner, we will alienate some of the very best and brightest Type-T talent from around the world eager to bring their energy and intellect to bear in the U.S. to create wealth, jobs, opportunity and innovation. Since labor and innovation can be sourced anywhere (see Innocentive), we should be encouraging that innovation and entrepreneurialism to burgeon in the U.S. We need to be attracting the brightest minds, not create motivators for them to take their best ideas back home to Chindia, Brazil, eastern Europe and beyond. When the best young minds leave they don’t just take their bank accounts, but also their energy, creativity and value-creating capacities that create jobs and prosperity.

We need to remain open, embrace intellectual diversity, and participate in the collaborate effort.

EchoLeaders: How Our Intention is Echoed Back to Us

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I had a conversation the other day with David Penglase, a fantastic speaker, writer and entrepreneur based in Sydney. He introduced the phrase Intentionomics to describe how our intent drives all results in life interactions. Our customers, colleagues, (certainly our children) and pretty much everyone we interact with have keen detectors of our intent. If, as a salesperson, your primary intent in prospect interaction is to maximize a contract value instead of honestly solving a client puzzle, they’ll recognize it. Even if that recognition isn’t immediate, your later actions by either conscientiously adding superlative value, or not, will come back in spades. This is the karma effect, the what-goes-around effect.

The travel policy at NetApp is Do the Right Thing. Officially it’s “We are a frugal company. But don’t show up dog-tired to save a few bucks. Use your common sense.” And by providing the latitude for employees to exercise their own discretion, they also self-select for continued employment there. Because, of course, they are working within a social contract, not a policy one. I had an interview with John Grant, CEO of Data#3 who believes strongly in offering people the autonomy and freedom to take strategic risks for the sake of furthering innovative design and results, all within their signature process they call PDO2. Or consider Disney, at which cast members have the authority and discretion to solve any customer dilemma on the spot as they choose – they can comp a penthouse suite if they choose. Later their peers and colleagues provide the social feedback mechanisms to allow cast members to understand the extent of reasonable customer remedies, but there are no punitive measures.

These are the characteristics of the EchoLeader, who value initiative over compliance, while expecting people behave with an aligned moral compass. EchoLeaders emphasize what they can give to the world and bring forth a point of view, a perspective and intent of construction – a will to build stronger communities of collaboration around a resolved vision. An EchoLeader has the ability to galvanize teams and create results because their purpose is beyond personal success. The purpose becomes pursuit of significance for the vision we serve.

Have another read of The Giving Tree – you’ll be reminded of gratitude and the power of giving.

The Red Velvet Rope Policy – Choose your Customers, Find your Vision

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When your by-product becomes your product we have lost our vision. Money is a by-product. Your product is what you can give to the world.  
– John Hope Bryant

Ever heard of the Red Velvet Rope Policy?  Ask Michael Port about being particular about who you decide to work with.  That is – the practice of aligning your business core competence with the customers you can best serve while simultaneously growing your own capabilities.  It’s about not allowing the customer to wag the company.  So choose carefully who you choose to do business with for both competitive competence building and depth of relationship.

I encountered this in spades yesterday.  We had an interview with Michael Byrne, CEO of Linfox, the largest logistics company in Australia.  Check this out: in about 2003 they made a concerted decision to selectively decommission 2/3 of their customers.  That’s right, they consciously chose to let go about two-thirds of their customers over time, because they didn’t fit the vision of what Linfox intended as its own design, future and core competence.  In some instances customers may have asked Linfox to sacrifice service integrity to ensure delivery of goods, or maybe some customers were trying to redirect Linfox into business areas they didn’t feel they wanted to build market share or product expertise.  They probably suffered dearly for this noble decision right?  Wrong.  They tripled their revenue while gaining significant business capability.

I’m not done.  Linfox is a logistics and freight business – a trucking business.  their primary overhead and environmental impact is around fuel and energy use so it stands to reason that the pursuit of profit and market share might motivate them to marginalize their emissions concerns.  Not so.  They now teach eco-driving for their truck drivers, capture facilities rainwater runoff for re-purposing, build libraries in India, pursue zero emissions, and are leading safety initiatives in Australia instead of waiting for government mandate.  That’s right – these initiatives aren’t to be legally complaint, they are all to do good, while doing good for their business.  The community wins, and the environment wins, all while building the conscionable company – which becomes then the killer talent attractor.  Think about it.  What kind of company do you want to work for?

A rising optimism lifts all ideas

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Ideas are abundant, but evidently sharing those ideas is pretty scarce in professional environments. Towers Perrin global engagement study reveals sadly only 21% of us would self-describe ourselves as “engaged” in our work. All in and loving it – excited working with our colleagues, dedicated and passionate about the projects we engage in, propelled by a belief that we are actively making a difference, and recognized and rewarded intellectually and emotionally by our efforts.

Gallop extended the engagement inquiry to ask in their survey how readily people actively share ideas collaboratively internally and with external customers. According to them, people who describe themselves as “engaged” in their work are five times more likely to proactively share their best ideas with colleagues and customers. We all have ideas – everything from how to improve a product or process, to where to have lunch. Ideas are power – they have the ability to captivate, energize, and propel innovation, yet if only about 15% of us are willing to share them what’s going on?

Jeffrey Pfeffer at Stanford University suggests one of the primary reasons we don’t share our best ideas is fear of our colleagues’ reaction to them. Pessimism stands out as the easiest mechanism to defend the status quo, and reject any novel idea. And so to avoid the expected objection of any new idea, most people just keep quiet. And wind up keeping their best ideas to themselves out of fear of being dismissed or ridiculed.

In a number of recent conversations I’ve found many people often describe themselves as constrained by process, policy and regimen, and find that their team’s best collaborative efforts is around crises. The suggestion is that the urgency of a crisis makes innovative and novel approaches permissible. In a related conversation one executive said unfortunately their company kneels at the altar of process, and attempts to accomplish any new initiatives frequently involve months of plodding meeting monotony.

Here’s an idea to encourage idea sharing and eliminate pessimism: Build positive anxiety instead of the negative fear-based kind. Imagine you work for Steve Jobs and every day have the nervous energy associated with wanting to perform at a high level, keep your mojo hot and be a major player. So you don’t work for the kind of person who inspires? Focus on encouraging the best in those around you. A rising tide lifts all boats.

To Find Innovation, Start with your own skill, love and purpose

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In late 1953 the Swanson brothers had a glut of turkey.  They were turkey wholesalers and had overestimated the market.  So now they had 235 metric tons of turkey riding around the U.S. in refrigerated rail cars and the executive team was wondering what to do.  Can’t you just imagine the CFO showing charts of what it cost to have all those turkeys rolling around on refrigerated rail cars per day?

Gerry Thomas, a sales executive at Swanson, had just seen what Pan American airlines was doing with compartmentalized in-flight food offerings.  He and the executive team at Swanson coupled this notion with Clarence Birdseye’s new flash freezing technique, and then added the catchy product label “TV Dinner” that fit beautifully with the cultural explosion of television.  Their great market opportunity was the eight million moms who were joining the workforce after WWII, who were also enjoying an abundance of electrical home appliances like ovens, refrigerators, freezers, and of course televisions.

Swanson prepared to sell five thousand units the first year.  They sold ten million at .98 cents each.  Big hit, and now you understand how the intersection of technology, inspiration, marketing and resources made it happen.  But does that formula work again today in 2010?  Here’s the difference now:

Resources are scare, not abundant: From water to textiles to lumber, the availability and premium placed on the natural resources we use to create the consumer products and comestibles are in high demand and, in the case of fossil fuels and water particularly, are increasingly precious.

Talent is global, not local: Historically if you had a local workforce that was obedient, diligent, and brought expertise and skill to bear executing on top-driven strategies, you had competitive advantage.  The future is most certainly now in terms of the ability to connect need with a globally-dispersed labor force –  highly talented, motivated, and comparatively cheap by U.S. standards.  And all connected by the cost of the internet, $0.  The skilled talent, regardless of source, is indeed not free, but increasingly anything function that can be routinized, and reduced to if=then equations which bracket to a correct answer, can also be automated.  Consider telemedicine, the in adsentia health care solution to everything from fast, cheap review of MRIs, mammograms, and all manners of diagnostics.  You get an X-Ray in the afternoon in Illinois and the scan is reviewed by a U.S board-certified physician in India, and returned overnight – or even immediately – over the web.

Innovation is democratized, not top-driven: No longer can firms rely on the the wisdom of a handful of insightful strategists at the top of a pyramid, when meanwhile companies like Rabobank or Best Buy are doing a better job of catering to customer need by creating mechanisms to actively listen to, and incorporate the interests of customers, and know-how of line personnel.

People are creative and expressive, not compliant: Pick your muse on this but currently I’ll take Sir Ken Robinson right now, who is on a crusade to persuade people that by pursuing their passions, they will make greater contributions, build community value, and importantly find fulfillment in their endeavors.  In his book, he profiles Matt Groening (created the pitch for The Simpsons on the spot in a meeting), Mick Fleetwood (bailed on high school at 16 to be a jazz drummer in London), Gillian Lynne (deamed an underachiever until enrolled in a dance school), and many others, who eschewed the proper ‘safe’ advice of elders, or were recognized by mentors for who they were, to pursue their passions to great ends.

Technology is still changing: Rapidly too.  Too rapid to adequately understand the implications.  Try this for analogy: “If you’re not shocked by quantum theory, you don’t properly understand it.” – Neils Bohr  Or to wrestle with the power collaborative technologies, try this fun video.

The point is this: You don’t need to be up for the challenge of constantly creating magnificent products and services that the world suddenly realizes it has been missing for fulfillment (think iPad right now).  The iPhone didn’t exist 5 years ago and now you need one.  Think rather, what am I good at, Love to do, and provides purpose and meaning in my life and the lives of others.  Focus on that and you will give meaning and value to the world and to yourself.