Five Traits of Leaders Working at Scale

sweepersIt’s not a glorious job. And would likely be completely forgettable, if not for the frantic brushing down the ice. It’s distracting until you figure out that they are actually making the stone go faster by polishing the ice in front of the sliding stone. Sometimes I wonder if they accidentally bump into the other stones on the ice. I’ve never seen it happen. But it’s the role of the sweeper that can often make the biggest difference in the outcome in a game of curling.

Effective leaders who create excellence, at scale, in the companies and communities in which we work, have this skill of clearing the way ahead, along with several other key traits. These unique people operating at the highest levels of leadership can divest their ego from the end goal. They have accountability when things go awry but not granular responsibility over individual elements, because the journey toward a shared audacious goal must be emotionally owned by the entire organization to create scale.

Those leaders who can create innovation and excellence at scale possess these five traits:

Sweep away barriers: In order for excellence to grow rapidly and unimpeded, the clutter of antiquated bureaucracy and organizational roadblocks needs to be mitigated or removed entirely. This is the job of the best managers – not to create work that distracts, but instead identify obstacles and have the power and political clout to remove them. Jack Welch likes to use the analogy of the sweepers in a curling match, whose job is to clean the ice in front of the oncoming stone.

Mine the organization for expertise: Lou Platt, the former CEO of HP once said, “If only HP knew what HP knows, we’d be three times more productive.” By that he meant that there was redundancy and untapped capability within their own organization. The best leader creates environments and communication patterns to recognize untapped potential and surface latent expertise. Sir Howard Stringer of Sony, once hosted an international gathering of their engineers just so they could meet and talk, and discover the great capabilities Sony already possessed. Many later thanked Howard, saying they had no idea the depth of skill and knowledge within their own organization.

Build an ownership culture: One of the strongest and fastest ways to build a culture of ownership is to facilitate the building of shared language. When leaders create the circumstances and opportunities for the people around them to define the language use to build projects and collaborate, it creates a higher sense of ownership because suddenly each team member has a vested interest in the eventual outcome. When you have the team name the project, or the outcome, it becomes more about how “we” play the game. This is a stepping stone to building signature solutions. A signature solution is a process or result that has the character, the personality, of it’s contributors baked in to the finished result.

Give credit: A hallmark of a great leader is one who doesn’t want the credit. Or more specifically, doesn’t need the credit. These leaders who can scale excellence recognize that by giving credit, they allow those around them to step to the front – to become leaders themselves. In this way, remarkable leaders are more inclined toward starting something with a greater purpose, and then allowing those more capable people around them to execute on the details and drive scale.

Emphasize process over results: I once had an interview with the Dean of Melbourne Business School, Zeger Degraeve, who has a strong passion for understanding how people make decisions, and create excellence at scale. In our discussion, he strongly reinforced the power of process-driven cultures in eradicating blame tendencies among managers and peers. When individuals and teams are punished on the basis of poor outcomes, despite strong collaboration and decision making, it sends a signal to the rest of the organization that failure is dangerous, and therefore risk should be avoided. Yet inversely, rewards-centered cultures create disincentives for people to make mistakes at a time when making mistakes is the most reliable way of figuring out what works.

Most organizations today create bonus and reward structures that focus on and reward results. If we want an outcome to be repeatable, we instead need to focus on the process that created the result and reward for that. To truly connect with people in our organizations, we should spend more of our time and energy as leaders asking them to examine more closely how they perform their tasks and collaborate as teams, and how the organization, as a whole, operates.

Redefine your competition. Think bigger.

thinkbiggerJeri Finard has made some valuable decisions on her way to the highest echelons of business. She stopped trying really hard to get ahead, she listened closely to trusted mentors, and she stopped following the conventional wisdom of focusing on your competition.

I had the privilege to interview Ms. Finard last week in New York. Currently the President of Godiva, and formerly the Global Brand President of Avon, and Chief Marketing Officer at the immense organization Kraft Foods, Ms. Finard is no stranger to executive offices and boardrooms. But as she described to me, the key to getting ahead was finding what she loved. And one key to finding what she loved was ignoring the ladder-climbing game. Let me explain.

Years ago as a manager at Kraft Foods, she was invited to lead the confectionary business for the newly acquired Nabisco. It was a generous and plum position offer. She declined it for personal reasons to focus on her family and children. She explained to me that while she was dedicated to her husband and kids, and unwilling to relocate her family for new opportunities, she also felt a sense of frustration while others around her were getting promoted. At the time her mentor was Ann Fudge, who went on to be President of Kraft General Foods and recognized as one of the savviest and most successful women in business. Ann advised her to follow her own path and passions, and disregard what her colleagues were doing.

As somewhat of a consolation, Ms. Finard was offered a lateral move to run the desserts division within Kraft. The desserts division was comprised of brands such as JELL-O, Cool Whip, Baker’s Chocolate and other brands which were stagnating. JELL-O already owned 85% of the gelatin market, Cool Whip had saturated their own market, and home baking was on the decline. From the perspective of many within Kraft it was considered a dog division with no prospect of growth opportunity. The expectation was that she would go babysit a flat line of products.

Ms. Finard took a new perspective. She didn’t know it wasn’t possible to build growth in a flat market. Yes, JELL-O had 85% of the gelatin market, but she focused on the fact that gelatin wasn’t the competition. The real competition was snack foods like yogurt, fruit, chips and candy bars. And JELL-O was less than 2% of the snack foods industry, so from her perspective there was nothing but growth opportunity. She focused on fun, like JELL-O Pudding Pops, and healthy alternatives, like JELL-O with less sugar and more fruit, JELL-O smoothies, even created popular recipes to reinvigorate desserts.

As she described, “Ultimately you’re competing for share of stomach. So I think it’s important that you don’t limit yourself by defining who your competitors are. Because if you do that, you’ll never think big enough.”

She also once had a hilarious dinner with Bill Cosby when working with him on the JELL-O Pudding Pops project.

To Bring Change Build Emotional Connection

Justin Menkes told me this story about Andrea Jung in one of her early business development efforts at Avon.

Avon is originally the California Perfume Company established in 1886. Fast-forward to the 1990s where Avon was often considered an aging product and a tired brand. Andrea Jung had just entered the company and had diagnosed the problem – the product was considered cheap and associated with low quality and outdated styles. Andrea knew it was time to take the product up-market. But knowing the course of action, and getting everyone on the bus is another matter. Even with the strongest strategy and idea, if people aren’t emotionally connected, it’s not going get off the ground. Andrea knew she had to capture the hearts and minds of everyone in the company, so she called a big town hall meeting to introduce the new branding and product enhancements.

As her product team was introducing the new flashy colors, packaging, products and branding, Andrea looked out upon a sea of confused and angry Avon women. They didn’t understand the reason for all this seismic change. All they could think about was their reliable customers’ disappointment and the loss of their Christmas bonuses. In the minds of the Avon women, Andrea was proposing to take away their livelihood.

Andrea stopped the presentation and asked a simple question to the audience, “How many of you use Avon products? Raise your hand.” As the Avon ladies looked around the room and saw how few among them actually used their own products, they understood how much trouble the company was in. In one singular moment Andrea empathetically understood their point of view and was able to pose a question to allow them to realize the urgency of their situation and the need for change. The rest was easy because now Avon had thousands of ambassadors for the new brand and product.

The message is this: don’t think the strength of a strategy or change idea will carry the day. Ultimately you have to win the hearts and minds of the people.

The Purpose Driven Leader – Rick Warren on Peter Drucker

“Every social and global problem is a business opportunity in disguise.” – Peter Drucker

Last week we attended the Peter Drucker Centennial conference in Vienna, Austria and had the incredible opportunity to interview and film world thinkers and leaders who were there celebrating and discussing Peter Drucker’s legacy and the future of management and business in the world.  Peter Drucker called himself a ‘social ecologist’ – which is to say he focused on understanding and improving human interaction, our constructs in business, government and communities, and that impact on our lives and environment. Another favored definition is: ‘the study and practice of personal, social and environmental sustainability and change based on the critical application and integration of ecological, humanistic, community and spiritual values’

The key words there are ‘integration’ and ‘application.’ Rick Warren, author of A Purpose Driven Life, attended and gave the opening address at the conference and spoke of the three primary characteristics that defined Drucker’s life and work: Integrity, Humility, and Generosity.

These three traits are the antidotes to the three traps of today’s leaders.  The first trap is to segment and partition our lives into work life, home life, sporting life, community-service life, etc., and instead our greatest strength comes from integrating all the disparate interactions, ideas and energies into a unified and integrated whole.  The etymology of integrity is from the Latin integer, meaning wholeness, or the unit of one.  Rick pointed out that the second trap is to focus and try to remediate what we think are our faults.  Often humility is misunderstood to mean acceptance of weakness or inadequacy, when instead humility is freedom from arrogance and pride.  And that intellectual freedom gives way to the ability to recognize the marvelous and to embrace wonder and curiosity.  And then, importantly, to be inquisitive and open to learning.  Rick had a powerful story about how each time he went to visit Peter Drucker and learn from him, he wound up trying to answer and wrestle with Drucker’s own persistent questions.

And finally Rick echoed Drucker’s advice that management and leadership was a liberal art yet a practical calling, and we all need to focus on what we can give and contribute in generosity.  The third trap is to hoard.  It’s no accident that to be miserly with time, energy, resources, talent, etc., is to be miserable.  From Peter Drucker to Rick Warren to you, pause to keep Integrity, Humility, and Generosity ever present.

You can see Rick Warren’s address here.  Doris Drucker’s address starts at about minute 35 and Rick Warren’s presentation at about minute 52.  Enjoy!

Building an international business? Go Native

I first heard the phrase Go Native (with respect to business anyway) from Stuart Hart, author of Capitalism at the Crossroads. Stuart intended this phrase as advice to companies looking to construct and gestate new products and services in partnership with indigenous markets. Last week we had an interview with Bruce Churchill, President of DirecTV Latin America. He understands the implications and expansive power of working closely with local operators and distributors, and not trying to manage businesses in foreign cultures from a head office located deep overseas.

Going native in emerging market ventures means leveraging the benefits of:
Culture: who knows better than a local operator in Venezuela that La Vinotinto is the football (soccer people!) team to watch and not La Furia Roja. A programming operator in Miami or NYC can’t possibly replicate the value of the local knowledge of cultural interests.

Credibility: again when creating the promotional and assembling programming packages (in the case of DirecTV) who knows better than the local operator in Lima, Peru what the population will respond to. Famously, think of Chevy’s efforts to market a car in Latin America called NOVA – uh, that’s means “No Go” in Spanish. Ow.

Financial excellence: operating on the local Mexican Peso or Venezuelan Bolivar means that the operating business isn’t managing currency fluctuations, but the local operator is working on local currency. In the end, reconciling P/L is more actual.

Ultimately, DirecTV disbanded offices trying to manage the business ventures in Latin America remotely from Miami or New York, and gave the creative and operational power to the local operators. The result? 62% Q3 growth reported November 5, 2009. Seriously.

Medicine is for the people, only after will profits follow

“We try never to forget that medicine is for the people.  It is not for profits.  The profits follow, and if we have remembered that, they never fail to appear.” – George Merck II

In 1995 CEO Ray Gilmartin described the principle driver for Merck as growth.  Not profitability, not cutting edge scientific breakthroughs, nor medicinal innovation or R&D… no, but growth.  That intent continued into 2000 when the chairman’s letter to shareholders stated, “As a company, Merck is totally focused on growth.”  At the time Merck had good reason to believe it could, in fact, accomplish this goal.  They were on the cusp of releasing the FDA-approved and PTO-patented drug Vioxx.  By 2002 Vioxx sales worldwide approached 2.5 billion, which weighed against a 25 billion company represented significant growth indeed.  But in the same time period studies were finding an alarming relationship between Vioxx and an increase in ‘cardiovascular thrombotic events’ – heart attacks and strokes.

In 2008 the New York Times published an article revealing that research papers on Vioxx were often ghostwritten by Merck writers and then published under the byline of prestigious doctors and scientists.  All in efforts to substantiate the value and public perception of Merck and Vioxx.  By early 2005 the FDA had officially attributed up to 139,000 deaths to Vioxx and unofficial estimates ranged upwards of 250,000 globally, although statistics are difficult to gather in developing nations.

And while Gilmartin laudably ordered Marck to voluntarily remove Vioxx from the market in the fall of 2004, sending Merck’s stock from $45 to $33, one must wonder if Merck’s goal in the product Vioxx served the vision of George Merck II.  Jim Collins reminds in How the Mighty Fall that the pursuit of profit over value, of growth over service can destroy even the mightiest of companies.  Motorola, HP, IBM, even NASA have all suffered from hubris, conceit, denial of risk, and yet returned from the brink of disaster.  Merck’s lesson is: remember the core vision and values, money will follow.

Your Carbon Strategy is a Market Opportunity

We recently had the opportunity to film Andy Hoffman, at the University of Michigan Ross School of Management, regarding market opportunities in a carbon-constrained world.  He frames the discussion in a purely apolitical manner – regulation is emerging at the state, federal and international levels that will dictate corporate carbon emissions; the question for you is: do you want to merely react to this shift in the market environment, or do you want to proactively build the next-generation corporate and product innovations that will put you on the leading edge?  Put another way: do you want to be exploiting the opportunities in this pending market shift, or scrambling to catch up?

Historically many people have had a tree-hugger notion of save-the-planet fringe activists asking us to recycle, reduce, reuse and encouraging costly regulation.  Andy asks us to instead, “Think of climate change as a market shift, one that will create both winners and losers. Changes in regulation coupled with shifts in consumer, investor, and energy will change the competitive landscape. How will you innovate to respond to this shifting landscape? ”  He frames the discussion in strictly business terms.

Consider Tom Friedman’s argument that regulation can be an incredible competitive advantage.  If you are a U.S. based multi-national corporation employing the best and brightest engineers, programmers, architects and technical professionals, you want the bar raised. You want your product innovation to be setting the standard in your market, and you want the barriers to entry to be increasingly higher to provide your company with a competitive advantage.  In fact, that bar is already being raised around the world and US business needs the right incentives to keep up.  Make no mistake, we want market innovation wherever it comes from but if you are a market-leader, you want to be defining the baseline to entry in the market

Anne Mulcahy gets the cow out of the ditch

anne_mulcahy.jpgIn 2001, the board of Xerox picked Anne Mulcahy to lead the Stamford company out of a ditch. At the time the sales force was in disarray, the SEC was investigating their business and reporting practices, and they were $14 billion (or $17 billion depending on what source you read) in debt. Her staff and business cuts were ruthless, but that plus a series of strong public relations efforts and senior management changes, yielded a $4 billion dollar gain on their debt. They aren’t out of the woods yet – Cannon and Hewlett-Packard provide tough competition in the market. In this new CEO QuickTalk, Anne Mulcahy describes the parable of the cow in the ditch. It’s a message that has stayed with her as she works to grow and lead Xerox to success.

Mulcahy describes herself as more of a communicator, than anything else. During her first few months, she spent untold hours and days traveling the globe listening carefully to employees, customers, and senior executives in the company. Her back-to-basics approach has been a boon to the company and investors. Only three years into her tenure, Anne Mulcahy gave this presentation at Stanford Graduate School of Business. Enjoy!

Artfully Placed Question is a defining element of executive intelligence

justin_menkes.jpgSometimes a provocative question can be a more powerful change agent than a definitive answer. When Andrea Jung took the helm of Avon, their products were languishing in the market and more often regarded as out-dated cosmetics only your grandmother would wear. Andrea knew instinctively that a key component to a successful turnaround would involve taking the product up-market, and building new and exciting colors, products, packaging to target younger hip buyers. At a town hall meeting of Avon Ladies, while her executive marketing team delivered this grand vision before hundreds of their top salespeople, Andrea looked out and saw astonishment, despair and resentment cascading through the room, and she stopped the presentation.

She stood and asked simply, “How many of you use Avon products now?” While the audience looked slowly around the room to find very few raised hands, a realization grew in that moment that systemic change was necessary to transform Avon into a globally competitive cutting edge industry leader. A collective understanding permeated the company, and galvanized the field population to be leading change catalysts for a new dynamic product and future for Avon. This is an example of Executive Intelligence. If you have access, please join us for this and other insights when Justin Menkes presents live and interactive by webcast to organizations globally on Oct 16!

Scott Eblin takes us to The Next Level

Do you know what it takes to be successful in the executive suite? What separates successful executives from those that don’t make it? We we lucky enough to get an hour with author Scott Eblin to film a series of QuickTalks focusing on the evidence-driven ideas from his new book. The Next Level: What Insiders Know About Executive Success answers that question. Building on interviews with some 30 senior executives from leading organizations such as Avon, Capital One, Northrop Grumman and Verizon Scott Eblin outlines what to pick up and let go of to succeed at the next l

Are you “always-on”? Racing among multiple projects and feeling a little over-extended in your new leadership role? Take a look at Scott on the importance of regular renewal to be an effective executive leader. And be sure to check out Scott’s Blog.