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The ABCDs of Trust from Ken Blanchard OTHER ARTICLES Who Should Lead? Inspire Purposeful People The New Dominance of Virtual Teams and Leaders Make More Mistakes: The Key to Innovation Why Change Management Should Be a Top Priority Five Pivotal Decisions in the Development of a Leader The Five Elements of Effective Leadership The Power of Empathy in the Workplace Ken Blanchard
Talent Strategies That Work in Asia
COMMENTARY
SOUNDINGS
CREATIVE INSIGHTS
TOP SHELF
Finding Leaders at All Levels
Marketers Not Getting What They Need from Their Data
Unleash Your Organization’s Potential for Innovation Through Collective Genius
Leaders Are Made, Not Born
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The Journal of the American Management Association
Volume 13, Number 2
S U M M ER 2014
THE ABCDs OF TRUST FROM KEN BLANCHARD. In an interview with the noted thought leader Ken Blanchard, we learned about trust busters and trust builders—knowledge that will enable you to achieve your corporate goals. An interview by Florence Stone. PAGE 6
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Who Should Lead? The answer may surprise you.
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Inspire Purposeful People. One way leaders can
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The New Dominance of Virtual Teams and Leaders. Are virtual teams and their leaders really any
Organizations are experiencing a shortage of leaders which that is impacting corporate performance. Companies must close the skills gap. By Elissa Tucker and Sue Lam, PhD. connect effectively with their people is to understand the value of work. By John Baldoni.
different from traditional teams and their leaders? A study found the answer to be yes. By Donna Dennis, PhD, Miles Overholt, PhD, and Mark Vickers.
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Make More Mistakes: The Key to Innovation.
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Talent Strategies That Work in Asia. Succeeding
The leader who viscerally understands what other people are feeling and experiencing is someone others want to follow. Being empathetic isn’t always easy, but the return is significant. By Bob Rosen and Tony Rutigliano. in Asia is not a given. Failures haven’t dissuaded U.S. organizations, however. Learn how to proceed. By Tom Homer.
2 FROM THE EDITOR A Culture of Leadership 3 COMMENTARY Finding Leaders at All Levels. The success or misfortune of a company does not rest solely in the hands of executive leadership. Rather, frequently they rest with the people on the front lines. By Frank L. Hanagarne Jr.
5 SOUNDINGS Marketers Not Getting What They Need from Their Data. A survey by Domo found that while 87% of mar-
Why Change Management Should Be a Top Priority. Senior managers are talking about the worth
keters and senior executives rely on data to do their jobs well, only 45% believe they have sufficient access to the data they need to function effectively.
Five Pivotal Decisions in the Development of a Leader. Learn about five pivotal decisions that make outstanding leaders. By Julia Tang Peters.
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The Power of Empathy in the Workplace.
People only learn by making mistakes. This is why mistakes can become the key to successful innovations. The author explains the connection between organizational culture and innovation and four traps that can impede positive ideation. By Stephen Balzac.
of transformational change—in the way they work with their customers, the speed at which they access data and make decisions, and even the organization’s culture. The return will be substantial. By Joy Taylor and Monica Morgan.
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The Five Elements of Effective Leadership. Every person in your team at every level of your organization has the potential to exhibit leadership capability. Here are five ways you can make it happen. By Rick Miller. MWORLD SUMMER 2014
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26 CREATIVE INSIGHTS Unleash Your Organization’s Potential for Innovation Through Collective Genius. The founder and CEO of valueideas describes the worth of collective genius. By Jay Mathur.
44 TOP SHELF Leaders Are Made, Not Born. Managers should understand the process of becoming a leader their staff can be proud of. By Brian Tracy.
48 OUR VIEW Ask, Listen, and Learn. By Robert G. Smith.
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FROM
THE
EDITOR
A Culture of Leadership
MWorld The Journal of the American Management Association
Behind every manager, supervisor, or employee who takes a leadership role in a situation at his or her organization is a positive corporate culture that encourages him or her to do this. Without it, middle managers and employees might not exhibit their full potential. Indeed, as the author of our Commentary (“Finding Leaders at All Levels,” page 3) explains, the success of a company sometimes doesn’t rest solely in the hands of executive management. Frequently, it rests with the people on the front lines that apply their own leadership talent. So, corporate culture can build leaders at all levels, helping employees and their organization. This is proven in a survey by APQC, reported on page 9 in this issue, which found that leadership gaps significantly impact profitability and productivity performance. The shortage of corporate leaders was found remediable by giving employees the skills they need to lead and the opportunities to use the leadership talents they have. Individuals with leadership capability need not go to business school to have the potential or resilience or decision-making capability to perform as a leader. With the right background, they can become leaders on their own. In this issue, we provide ways to perfect leadership know-how. For instance, John Baldoni observes in his article, “Inspire Purposeful People” (page 14), that it helps employees to recognize the strategic importance of their tasks. More specifically, “The Five Elements of Effective Leadership” (page 36) identifies five qualities that will help every member of your team have the potential to exhibit leadership capability. Two articles in this issue look at how corporate culture can work in conjunction with leadership. Stephen Balzac describes the role that culture plays in generating successful innovations. Balzac explains the connection between organizational culture and innovation and describes four traps that can impede positive ideation. And the team of Donna Dennis, PhD, Miles Overholt, PhD, and Mark Vickers shares the results of a survey of virtual teams, citing the difference between virtual teams and traditional teams and why companies should be utilizing virtual teams more often. For those companies interested in going global—specifically, to Asia—we also have an article on how to compete in that part of the world. In forthcoming issues of MWorld, we would like to continue our exploration of corporate cultures and leadership strategies. Please write with your insights and concerns.
EDITOR
Florence M. Stone CREATIVE DIRECTOR
Seval Newton COPY EDITOR
Eileen Davis GRAPHIC ARTIST
Tony Serio PRODUCTION MANAGER
Laura Grafeld
PUBLISHER
Robert G. Smith PUBLIC RELATIONS MANAGER
Roger Kelleher
Edward T. Reilly PRESIDENT & CEO
MWorld© (ISSN 1540-2991) is published quarterly by American Management Association International, 1601 Broadway, New York, NY 10019-7420, Summer 2014, Volume 13, Number 2. POSTMASTER: Send address changes to American Management Association, 600 AMA Way, Saranac Lake, NY 12983-5534. American Management Association is a nonprofit educational association chartered by the Board of Regents of the State of New York. MWorld is an independent forum for authoritative views on business and management issues. Submissions. We encourage submissions from prospective authors. For guidelines, write to The Editor, MWorld, 1601 Broadway, New York, NY 10019-7420 or email fstone@amanet.org. Unsolicited manuscripts will be returned only if accompanied by a selfaddressed, stamped envelope. Letters are encouraged. Mail: Letters, MWorld, 1601 Broadway, New York, NY 10019-7420; email: fstone@amanet.org. MWorld reserves the right to excerpt and edit letters. Names and addresses must accompany all submissions. Subscriptions. Executive and Individual Members of American Management Association receive MWorld as part of their annual dues, a nonrefundable $50 of which is allocated for the subscription to MWorld. Single copies are available at $25 plus shipping and handling. Requests should be sent to sgoldman@amanet.org Rights and permissions. ©2014, American Management Association. No part of this publication may be reproduced or transmitted in any form or by any means without written permission. Requests should be sent to Joe D’Amico, at jdamico@amanet.org Editorial Offices 1601 Broadway, New York, NY 10019-7420 Tel: 212-903-8075; Fax: 212-903-7948 Email: MWorld@amanet.org Opinions expressed by the editors, contributors or advertisers are not necessarily those of AMA. In addition, the appearance of advertisements, products or service information in MWorld, other than those of AMA itself, does not constitute endorsement by AMA.
Florence M. Stone Editor, MWorld 2
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COMMENTARY
Finding Leaders at All Levels BY FRANK L. HANAGARNE JR.
There is a general tendency in business organizations to think that the success or misfortune of the company is in the hands of the executive leadership. I don’t think that is the case. I believe that, in most cases, the actions that make or break a company are occurring at different levels in the organization. The prospect for success actually rests with the people on the front lines who make things happen day by day. Consequently, identifying leadership talent is an activity that needs to happen at all levels of the organization. How can an executive charged with fostering leadership find the individuals with leadership skills and potential? One simple but important truth is that it isn’t going to happen in the executive suite. You have to be out in the field. You have to know people and have meaningful dialogues with them. If you can do that, you’ll be able to make all kinds of important observations. Clues about who the informal leaders are come from people’s body language, the comments they make, and the colleagues they defer to when it’s time to make a comment. When you are out meeting people and talking with them about their jobs, it’s also possible to discern who is passionate about what they do. Even though they may not have the title to offi-
cially manage others, informal leaders have tremendous influence over what happens in an organization. Once they are identified, it is important to have a deeper conversation with them Frank L. Hanagarne Jr. to find out what motivates them and to encourage them to share their vision and motivation with others in their unit. It’s also important to talk with these people’s supervisors to see if they recognize the talent and are providing development opportunities for that individual. I encountered a great example of this kind of passionate leadership when visiting one of our mines in Latin America recently. We were working on improving ground support in part of a mine, and a person with a background in civil engineering had been hired several months earlier to help with the project. He had decades of experience in building roadway tunnels of various kinds. This person took me on a tour of the mine to show me how they were dealing with the issue. Even though he was working in a very tough environment—one that was dark, hot, and humid, with rugged terrain—it was obvious to me that he absolutely loved what he did each day. But he didn’t just bring enthusiasm to his job. He also brought innovation. He introduced a technique to improve ground conditions in the mine that was well known in civil engineering but had not been used by our company for precious metals mining. This technique improves workplace conditions and brings tremendous value to the company. It’s a great example of how leadership can be demonstrated at any level of an organization. For executives, I believe there are several key ways to exhibit the kind of leadership that fosters leadOre at Coeur Mining’s Kensington gold mine in Alaska is processed in a flotation mill that ership effectiveness at every level of produces a concentrate that is sold to third-party smelters. The Kensington mine and mill the organization. are located about 45 miles northwest of Juneau, AK. MWORLD SUMMER 2014
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COMMENTARY
“Make sure people understand that they are in a safe environment and that you are looking for honest discussion, not just tacit agreement.” The first step, as noted, is to show up and be with people in the field. It is essential to understand who people are and what they do and to discuss the company’s goals with them.
Coeur Mining’s Rochester operation is a surface silver and gold mine, located in Pershing County, NV, northeast of the town of Lovelock. The mine utilizes a heap leaching process to extract both silver and gold from ore mined using conventional surface mining methods.
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Frank Hanagarne Jr. is senior vice president and chief operating officer of Coeur Mining, a producer of silver and gold. Previously, Hanagarne was chief operating officer of Valcambi, SA, a precious metal refiner in Switzerland, in which Newmont Mining Corporation has an equity interest. Prior to becoming operations head of Valcambi in 2011, Hanagarne was a director of corporate development for Newmont.
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PHOTOS COURTESY OF: COEUR MINING, INC.
Second, make a field visit much more effective by telling those at the site exactly when you plan to arrive. Also, avoid bringing a large group with you, and do not require individuals at the site to do a lot of preparatory work for your arrival. If people feel comfortable, they will say a lot. So it’s important to set the tone for a relaxed visit right from the start. Next, actively listen to what people say during your visit and encourage open discussions. When you return for another visit, be sure to relay that you remember what was said previously. Confirm that you understood the points of view expressed and came away with the right observations. In addition, take the opportunity to stimulate innovation by suggesting alternative ways to approach tasks. Encourage feedback on the feasibility of those different approaches. Make sure people understand that they are in a safe environment and that Coeur Mining’s Kensington underground gold mine in Alaska commenced you are looking for honest discussion, not commercial production in 2010. The mine is accessed by a horizontal tunnel and just tacit agreement. utilizes conventional and mechanized underground mining methods. Finally, close the circle by visiting site locations again and revisiting earlier discussions. If an objective has been missed, discuss how the team is approaching it differently now. All of these steps lead toward the goal of creating a culture of achievement, wherein leadership is identified and enabled at all levels of the organization to drive continual improvement. MW
SOUNDINGS
Marketers Not Getting What They Need from Their Data Data are the lifeblood of marketing, yet marketers are extremely frustrated with their business information. There is a growing disconnect between what marketers want and need from their data and what they are actually getting, according to a new report by Domo, a cloud-based venture that helps CEOs and other executives transform the way they manage business and get more value from existing investments in business data. Domo surveyed 301 marketers, including managers, directors, and senior executives, across a range of industries and found that 87% rely on data to do their job well. However, only 45% believe they have sufficient access to the data they need to function effectively. These results are in keeping with an earlier study conducted by Domo which found that 70% of CEOs and business leaders across all functions still lack real-time access to their most important information. In this most recent survey, 83% of respondents stress the importance of real-time marketing data, but only 37% say they can actually access the data they need in real time. This is an extremely worrying trend as marketing continues to increase its reliance on technology. Marketers understand that the ability to extract value from data is critical to achieving competitive advantage. But this process is becoming more difficult as the mountains of data they must constantly mine—from social media and mobile content to CRM and business reports—grow bigger every day. In the survey, 66% of marketers report that they feel overwhelmed by the volume of data they have to handle. What’s more, 59% of marketers are frustrated by how long it takes to receive reports, and 50% say the marketing reports they receive lack key information. Most marketers rely on some form of analytics to help them make sense of their data, but for the most part these analytics tools are falling short. Some 68% of marketers use web analytics, but 39% evaluate their web analytics once a month or less. Additionally, 83% of marketers have email marketing tools, but only 9% evaluate email marketing data daily. MWORLD SUMMER 2014
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“Business runs on reliable data, but if executives are only analyzing their data once a month, it’s impossible to make timely decisions and uncover the insights they need to compete in today’s hypercompetitive environment,” said Josh James, founder and CEO of Domo. “Every second counts in the digital world, and that’s true whether you’re the CEO, CFO, COO, CMO, or CIO.” Increasingly, marketers understand the need to bring all their data together in one central location. According to 89%, it is important to see marketing data from all their disparate sources in a single dashboard. But only 19% report they have that ability today. Marketers also realize that good data isn’t just critical to the business. It’s also vital to their personal success. Of respondents, 54% say they are compensated by marketing ROI, yet most of them cannot quantify the effectiveness of their various marketing campaigns. James added, “It’s inexcusable that the vast majority of business executives are being held back because they can’t get access to timely, relevant data.” MW Domo’s cloud-based executive management platform gives users direct, real-time access to all the business information they care about, all in one place. The entire study is available at www.domo.com/learn/2013-data-driven-marketing-survey-report. Courtesy of Domo. AMA’s course Data as a Strategic Asset: A Customer-Focused Approach will unlock customer data to reveal opportunities that can lead to increased brand loyalty, repeat sales, and stronger overall results. Take this course and be at the epicenter of analytics. Find out more at www.amanet.org/2016
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COVER STORY
The
s of Trust from AN INTERVIEW BY FLORENCE STONE
In his latest book, Ken Blanchard—the New York Times bestselling co-author of Ken Blanchard
The One Minute Manager® and co-founder of The Ken Blanchard Companies, an awardwinning global leadership training firm—affirms the importance of building trust. During an interview on Edgewise, AMA’s podcast program, Blanchard explained that he populated his latest business parable with two longstanding enemies—a cat and a dog—to demonstrate that trust can be established in even the most problematic situations. The book is Trust Works! Four Keys to Building Lasting Relationships. In the interview, Blanchard told how he and his co-authors, Cynthia Olmstead and Martha Lawrence, wrote the story to make the book’s principles accessible to a wide readership. “In this book there’s a piece of the problem about trust for everybody,” he said. “We hope readers will enjoy the story and use the self-assessment at the back of the book to improve their own trustworthiness and inspire others to do the same. “It’s interesting,” Blanchard continued. “People separate home and work relationships, but trust is not only in our relationships at home but in our relationships in our organizations.” Further, he emphasized how easily trust can be blown. All it takes is one incident to destroy trust between two people or a leader and his or her team. Blanchard and his team create a strong case in their book for the importance of trust. He said, “Trust is a primary factor in how people work together, listen to one another, and build effective relationships. Lack of trust costs money and time. It delays decision making. There’s doubt and anxiety, which in turn lead to negative speculation, low energy, and poor productivity. When people don’t trust their managers and leaders, they don’t come forward. They pull back and even withdraw. They may stay with the organization, but solely for their paycheck.” He explained how trustworthy leaders benefit from employees who devote themselves to their work and even go above and beyond. Further, where trust is a part of the environment, there is
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Ken Blanchard more cooperation and collaboration within the team as a whole. Productivity and creativity grow. “Clearly,” he said, “in a trustworthy environment, employees are willing to invest their time and talents.”
A MODEL OF TRUST But Blanchard and his co-authors do much more than point to the business value of trust. They go on to identify the four behavioral elements that must be present to create trust. Drawing on a 20-year study by co-author Cynthia Olmstead, they present a learning tool called the ABCD Trust Model™. The model is comprised of four parts: is for Able, or behaviors that demonstrate competence. This measures how well someone achieves quality results, resolves problems, or uses skills to assist others. is for Believable, or behaviors that demonstrate integrity. Trustworthy leaders, for
example, keep confidences, don’t talk behind others’ backs, are sincere and nonjudgmental, and show respect. Believability is also about acting in a consistent, valuesdriven manner which reassures employees that they can depend on their leaders. is for Connected, or behaviors that demonstrate care for others. This is supported by
good communication skills. As Blanchard said, leaders here show interest in others, share insights about themselves, and work well with and show empathy for others. Leaders are seen more as real people that their employees can identify with. “When a leader opens up to a staff member, there is a sense of connection,” he explained. is for Dependable, or behaviors that are responsive to the needs of others. “If a
leader promises to do something,” said Blanchard, “he or she must follow through. It also requires being organized and predictable so that people can see the leader has things in order and is able to follow through as promised.” Using the four-part model, leaders at all levels can create action plans to increase the level of trust in relationships or repair damaged relationships where trust has been broken.
TRUST BOOSTERS AND TRUST BUSTERS Using the ABCD Trust Model, Blanchard and his co-authors identify trust busters (behaviors that erode trust) and trust boosters (behaviors that build trust) to help users determine the level of trustworthiness in each of the four categories. Blanchard described how, for example, shoddy work is a trust buster, whereas strong team participation would boost trust among workers. Looking at B for believability, he continued, trust busters would violate confidences or truth, whereas trust boosters would keep confidences and be honest. Connected trust boosters are reflected in listening well and praising others’ efforts, while trust busters would include poor listening, ignoring others’ efforts, and even failing to share information about themselves. Dependability is measured by whether someone is on time or not, keeps a promise or doesn’t, or is organized or disorganized. MWORLD SUMMER 2014
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SIX WAYS TO IMPROVE TRUST DEMONSTRATE TRUST. Begin by setting a solid example of trust-boosting behaviors that show you are Able, Believable, Connected, and Dependable. SHARE INFORMATION. This can sometimes mean disclosing information that is considered privileged. Providing people with more complete information communicates trust and a sense of “we’re in this together.” FOSTER COMMUNICATION. Encourage leaders to hold regular progress meetings with their direct reports. This process will allow work groups to catch problems before they become major issues. WHEN THERE’S A BREACH OF TRUST, ACKNOWLEDGE IT. Trust cannot be rebuilt until you admit that a problem exists. Begin by assuring the party or parties involved that your intention is to restore trust. ADMIT MISTAKES. An apology is an effective way to correct a mistake and restore the trust needed for a good relationship.
Which trustworthy behaviors do employees look for in their leaders? According to Blanchard, first, leaders should be accessible. He told us how important it is for leaders, for instance, to be out in front of the organization sharing their plans for the future. They shouldn’t hide behind closed doors or direct reports. Employees look to their leaders for information about what’s going on. Among the questions employees want answered, he said, are: What specifically are we going to do? When do we begin the program? How will it affect the organization? Once leaders are open about the future, they also must have their ears open to the concerns of their employees. As Blanchard observed, “Particularly today, leaders have to create opportunities for dialogues. They have to listen for concerns and anxieties that people might have.” If they don’t have the answers to the issues raised, they should promise to provide those answers when they have them. And, he added, leaders need to keep their word to get back with the information they promised as soon as possible.
If trust has been damaged—whether between leaders and CONTINUE TO WALK THE TALK. Building their employees, employees and co-workers, or employees trust is a journey, not a destination. Leaders and customers—the good news is that it can be repaired. must continue to model the values and behaviors The ABCD Trust Model can help the leadership of an they wish to see in the organization. organization identify the signs that trust is eroding, determine where the breakdowns are occurring, and work to rebuild a strong foundation of trust, said Blanchard. The first step in rebuilding trust is to acknowledge that a problem exists and needs to be addressed, he noted. “It’s important that the parties involved assure one another that they intend to restore trust between themselves and are willing to take the time and effort to get the relationship back on track,” Blanchard said. Of course, he added, it is important to admit your part in the breach of trust and to apologize for your role. Next, those involved in the situation need to assess the ABCD Trust Model to determine which elements were violated. “The goal is not to point fingers,” he said, “but to identify problem behaviors so they can be prevented in the future.” The final step in rebuilding damaged trust is to create an action plan, Blanchard said. Discovering the trust-busting behaviors at the root of the problem enables leaders to identify the trust-boosting behaviors that can create harmony, synergy, and satisfaction. MW Learn how to adopt a situational leadership style and thereby heighten performance and improve productivity by attending the Situational Leadership® II Workshop. This course was developed for AMA by The Ken Blanchard Companies®. To find out more about the course, visit www.amanet.org/2901
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Who Should LEAD? BY ELISSA TUCKER AND SUE LAM, PhD
Leaders wanted. Candidates must be highly competitive, yet collaborative team players; analytical but also emotionally intelligent; and masters of strategic planning, flexibility, and adaptability. A results and cost focus required. Preference will be given to candidates who have a track record of being creative and innovative.
A SHORTAGE OF LEADERS With job requirements like these, it shouldn’t surprise anyone that organizations are experiencing a shortage of leaders. In fact, the struggles that organizations are having in securing the leadership capabilities required for business success have been well documented and widely publicized. Less clear, however, are the actions that organizations can take to effectively tackle this issue, which has become a top CEO concern. In 2013, our nonprofit organization, APQC, conducted research with the goal of identifying promising solutions to the leadership challenge. APQC surveyed 547 professionals who represented organizations of various sizes and industries. The results confirmed that, among organizations today, the leadership deficit is pervasive, skills gaps are numerous and large, and leadership shortages are expected to worsen. A significant deficit was found for each leadership skill included in the survey, with one exception— authoritativeness. Participants indicate that organizations have a surplus of this skill (see Figure 1 on page 10). To determine the size of the leadership skills gaps, APQC averaged participants’ ratings on the skills their organizations need to succeed and the skills their organizations’ employees currently possess. Figure 1 shows the average
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FIGURE 1 Leadership Skills Gaps
Source: Sue Lam, PhD and Elissa Tucker. The Leadership Deficit: Survey Research Report. APQC, January 2013.
values for each leadership skill. Average values were calculated based on participants’ rating for each leadership skill on a five-point scale (1 = not at all; 3 = moderately; 5 = extremely).
EXPECTATIONS OF LEADERS HAVE CHANGED Additional findings from the survey reveal that the requirements organizations have for leaders have changed. The leadership capabilities that organizations need are substantial and complex, raising the question: Can the leadership requirements of organizations today be found in any one individual? APQC survey participants agreed that the answer to this question is no. Eighty percent responded that current business challenges require a different style of leadership. Additional participant responses reveal that this different style of leading is dynamic and collaborative.
FIGURE 2 Business Trends Driving a Larger Leadership Skills Gap
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Unpredictable events
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Reduced employee tenure
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Aging workforce
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Emergence of generation Y/millennial workforce
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Growing importance of knowledge work
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Flattening of organizational structures
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Sophistication of data analytics capabilities
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It is founded on the principle that leadership is a shared endeavor based on the situation and expertise. Which business challenges require that organizations adopt this more dynamic approach to leadership? Experiencing unpredictable events is the top business challenge driving this
FIGURE 3 Organizational Practices That Minimize the Leadership Skills Gap ■
Leadership capabilities are developed in all employees
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A leadership competency model (a list of skills that leaders at your organization should possess) is used to select and develop leaders
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Employees selected as having leadership potential take part in a formal leadership development program
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Compensation is based on performance
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There is much transparency regarding job and project opportunities
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Succession plans outline individuals who are prepared to move into leadership roles
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Leadership is based on a recently proven ability to deliver results
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Peer feedback is part of the performance evaluation process
change. Other business trends ushering in the dynamic leadership style include reduced employee tenure, an aging workforce, the emergence of the millennial generation, knowledge work, flat organizational structures, and sophisticated data analytics (see Figure 2). Each of these trends was predictive of organizations experiencing a larger leadership skills gap.
LEADERSHIP PRACTICES NEED TO CHANGE TOO With further analysis of the survey results, APQC isolated the most promising solutions that organizations can take to minimize the impact of the leadership deficit (see Figure 3). Each of these leadership practices is predictive of an organization having a smaller leadership skills gap. Topping this list of solutions is the practice of developing leadership capabilities in all employees. This number one skills-shortage solution is about more than just increasing the number of candidates who are qualified to take on formal leadership roles. More important, it involves developing all employees to lead as the situation and their expertise dictate. And, it involves current leaders embracing a more fluid, inclusive, and collaborative style of leading.
ADOPTING THE “ALL EMPLOYEES ARE LEADERS” MODEL Only 8% of participants in APQC’s survey reported that their organization is developing leadership capabilities in all employees quite a bit. Fortunately, the survey identified actions that organizations can take to enable all employees to lead as the situation requires. 1. Update existing leadership development curricula. Formal leadership positions are still needed in the dynamic leadership approach. Updating high-potential programs and succession MWORLD SUMMER 2014
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“HR practices are an important lever that organizations can use to incentivize current leaders to change how they lead.” planning processes is therefore an important step in creating an organizational environment in which dynamic leadership can thrive. Organizations can start by updating existing leadership development programs to promote the skill requirements of dynamic leadership (see Figure 4). APQC’s survey showed that many leadership development programs today are ineffective. Updating the skills these programs teach is one way the programs can be improved. For example, an organization can review its leadership competency model to see if it reflects the complex mix of skills required of dynamic leaders. 2. Guide existing leaders through the change. How individuals in formal leadership
positions behave plays a large role in the extent to which an organization embraces dynamic leadership. APQC’s survey found that leaders’ resistance to changing the way they lead is a top driver of leadership skills shortages. Accordingly, organizations need to teach current leaders new ways to lead and incentivize them to use these new techniques. For example, an organization can ensure that leaders are compensated and rewarded for embracing the leadership behaviors and style that the organization needs most. 3. Scale leadership curricula to all levels of the organization. To prepare all employees to
lead, organizations can scale updated leadership development curricula to be relevant for employees working at different levels and in different roles. APQC’s survey indicates that organizations are underinvesting in leadership development. While investing in providing a formal leadership curriculum to all employees is important, there are also less cost-intensive ways that organizations can develop these capabilities throughout their workforces. For example, organizations can give managers and employees transparency into enterprise-wide job and project opportunities. They can train managers to help employees identify and secure opportunities to develop dynamic leadership skills. In addition, if the organization has not already done so, it can incorporate peer feedback into the performance management process and encourage employees to give feedback on how well peers display dynamic leadership skills. 4. Align HR practices with desired leadership behaviors. HR practices are an important lever that organizations can use to incentivize current leaders to change how they lead. Having selection, development, and reward practices that promote an outdated leadership style is a top barrier to minimizing leadership shortages. HR misalignment is actually predictive of an organization having a larger leadership skills gap. Selection, development, and reward practices can be modified to encourage employees to develop and display the kinds of leadership behaviors that the organization needs most.
For example, organizations can review promotion practices at all levels to ensure that promotion decisions are based on both an ability to deliver results and, for instance, an ability to listen and share knowledge. Similarly, compensation and reward practices for employees at all levels can be reviewed to ensure that they are encouraging the achievement of business results through listening and sharing knowledge, for example. 12
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FIGURE 4 Preparing to Lead—No Matter Where You Sit on the Organization Chart Action
Description
Develop leadership skills that organizations are deficient in
Invest in developing the leadership skills that organizations need most, but have the least. These include strategic planning, change management, knowledge sharing, listening, and emotional intelligence.
Develop dynamic leadership skills that you are deficient in
Invest in developing dynamic leadership skills, which include teamwork, collaboration, strategic planning, listening, emotional intelligence, adaptability, and self-awareness.
Find opportunities to learn about and practice dynamic leadership
Work with your manager to identify job, project, and training opportunities that will help you build these skills.
Seek coaches and mentors
Seek coaching and mentoring from leaders who exhibit these skills and promote a dynamic approach to leadership.
Ask for peer feedback
Seek peer feedback related to how you display these leadership skills in your work.
CONCLUSION The answer to the question “Who should lead?” is “everyone.” And given the results of this APQC research, this answer shouldn’t surprise anyone. In an unpredictable, knowledgeintensive, and data-infused business world, organizations need to more fully tap the intelligence and potential of all employees. They also need to empower employees to work together to read the market, anticipate and adjust to change, and make decisions on the best ways to achieve business objectives. For employees looking to prepare themselves to lead, APQC recommends developing the leadership skills that organizations are most deficient in, developing dynamic leadership skills that you are personally deficient in, finding opportunities to learn and practice these skills, and enlisting peers to give you feedback on your leadership skill development progress (see Figure 4). Elissa Tucker is human capital management research program manager at APQC. Sue Lam, PhD, is human capital management research specialist at APQC. The organization is a member-based nonprofit and one of the leading proponents of benchmarking and best practice business research. Working with more than 500 organizations worldwide in all industries, APQC focuses on providing organizations with the information they need to work smarter, faster, and with confidence. Visit www.apqc.org to learn how you can make best practices your practices. To fill the gaps in leadership your firm has, consider AMA’s course Succession Planning: Developing Leaders from Within. Find out more about this course at www.amanet.org/8110
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Inspire Purposeful People BY JOHN BALDONI
Nelson Mandela, former president of South Africa, said, “Thinking too well of people often allows them to be better than they otherwise would.” For 27 years, Nelson Mandela was cut off from his family and friends and was imprisoned on a barren island off the coast of South Africa. Labeled a terrorist and condemned to a life sentence, Mandela fought the temptation to hate his enemy and instead sought to understand more about him. He even learned Afrikaans, the language of his oppressor. It turned out to be good preparation, for after he was released from prison in 1990 and the apartheid era came to an end, Mandela was elected president in 1994 in the country’s first fair and free election. Mandela used the opportunity not to dish out punishment to those who had wronged him, but rather, like Abraham Lincoln, to “bind up the wounds” of his divided country and seek the establishment of a new culture for South Africa. Mandela was a leader who believed in the innate goodness of people. Early in his presidency, he used the staging of the 1995 Rugby World Cup in Johannesburg as an attempt to bring peace. Rugby was a game favored by whites, not blacks, but Mandela worked to bring the races together harmoniously by uniting them toward a single goal: winning the World Cup for South Africa. This story is told in the book Playing the Enemy by John Carlin. Mandela told Carlin that he wanted to use the sport as a means of nation building. In his first meeting with Francois Pienaar, captain of the South African rugby team, Mandela expressed his idea that sports, particularly this rugby tournament, could be a means by which people could put aside past prejudice to forge a new national identity. A bold notion certainly, but as Carlin explains, Pienaar left this meeting with Mandela certain that he had the president’s support and friendship.
TRANSFORMATIONAL LEADERSHIP Encouraging people to believe in themselves so that the organization can achieve is a noble quest. The leader must not only see beyond the horizon but also make what is over that horizon tangible and even attainable for others. Organizational theorists call this “transformational leadership.” Transformational leadership rests, as it did for Mandela, on instilling purpose in people by treating them as contributors rather than as adversaries. Mandela did it by putting aside any bitterness he had developed as a black man living under the oppression of apartheid and 14
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reaching out to whites and blacks to create a new society that would allow the races to live in harmony. Few leaders will face the obstacles to unity that Mandela did, but every leader will find him or herself facing challenges that can be solved only by finding ways to bring people together for a common purpose. This can be accomplished only by connecting with people in ways that affirm their dignity and confirm the need for their participation in the work the organization does. Marshall Goldsmith, long considered America’s preeminent executive coach, says, “The way leaders can demonstrate that they put people first is, rather than telling people what to do and how to do it, instead asking for their input, listening to their ideas, and learning from them. Then demonstrate this learning through ongoing follow-up and actions that show they are indeed putting people first.” “If leaders don’t believe there’s purpose, they can’t instill it,” says Nancy Schlichting, CEO of Henry Ford Health System. Leaders need to imbue their organizations with a sense of purpose, and they do this through words and actions. Part of communicating purpose is demonstrating the possibilities that come with the job. As Schlichting says, “We have to be able to convey it in a way that really helps others step back from the day-to-day grind and really understand that they have a unique opportunity.”
THE ROLE OF A LEADER-MANAGER One way leaders can connect effectively with their people is to understand the value of work, not by simply quantifying it in terms of dollars and cents but also by recognizing its strategic importance. It is tempting to quantify people’s work in terms of an organizational chart, but that exercise tells you only who is responsible, not who actually does the work. They may not be one and the same. Therefore, there are three questions a manager can ask: 1. What is the work? Work is anything an employee does to add value to the organization, whether it is creating a report full of statistics and projections or stapling that report together for distribution to senior management. Work is work. But all jobs are not equal, and, therefore, it falls to the manager to decide who does what. 2. Who does the work? A great deal of work is tactical. It is the day-to-day things we do to
keep a business humming or a nonprofit serving its constituents. Identifying who should do what is a manager’s responsibility. It’s important to assign people to tasks they can do well and that are best suited to their skills. Easy to say, but so often employees are in the wrong slots. Some highly trained folks are doing work that could be done by entry-level employees, or frontline employees are challenged to do more than they are equipped to do. Sometimes MWORLD SUMMER 2014
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“Shared knowledge and values enable collaboration, but they cannot ensure it. Genuine collaboration will come only when people want to do it and can trust one another.” frontline managers spend too much time working beneath them; that is, they are too involved in details when they should be thinking of ways to let their direct reports do the work. 3. How does the work get done? We all want the idealized workflow: just enough to keep us busy but not too much to overwhelm us. But all too often, especially in times of scarcity, most of us are working over our capacity. We are stretched to accomplish our to-do lists, so we end up clocking long hours. This approach works for the short haul, but over time it becomes burdensome, leading to burnout and adversely affecting productivity.
The answers to these three questions can provide a foundation for understanding the value of work in people terms. Once you know who does what and how, now comes the hard part: What is the role of the manager? To my way of thinking, managers have two prime responsibilities: providing resources and removing obstacles. Each of these responsibilities can provide insights into the what, who, and how of workflow. Purpose very often works best when it is tied to the strategic plan. The first time that Consumer Reports, under the tenure of CEO Jim Guest, rolled out a strategic plan, employees did not understand how their work fit into the plan. So when the organization developed a new plan, it communicated it throughout the company by holding meetings and workshops. Now, as Guest reports, when people debate ideas, they ask, “How does this fit with the five goals of our strategic plan?” Such clarity may seem simple, but it does link purpose to results and, more important, connect people’s jobs to the plan. When speaking of purpose, Guest likes to relate the story that Peter Drucker told about the stonemason. A visitor to town encounters a stonemason and asks him what he is doing. The man replies that he is cutting stone. Another mason replies that he is building a wall. But a third mason replies with pride, “I am building a cathedral.” Taking pride in what you do comes when you know the purpose, the big picture, how your work contributes to the whole—the cathedral you are building. Providing resources is a matter of assigning the right people to the right task at the right time. The manager’s challenge comes in looking beneath this mantra to determine if the people are truly right for the job—that is, do they have the right skills and training to do the work? Next, you need to figure out if they have the resources to do the job in the given time frame. In theory, sure they do; in practice, not so often. This is where good managers improvise. They find ways to get quality work done with fewer resources. It requires good planning and insight into the people doing the work. Allocating resources is one thing; finding the right people to manage those resources and use them efficiently may be more important.
DRIVING HIGH PERFORMANCE Purpose is an intention, but if it is to succeed it must be used to drive results. One way leaders can utilize purpose as an engine for helping the organization achieve its intentions is to link purpose to execution. That is, you link what the organization does (its mission) to how it does it (its values and behaviors). 16
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Know the mission. Mission is the anchor. It is the foundation upon which the organization rises. Put simply, mission defines what the company does, whether it builds houses, provides medical care, or produces entertainment. Mission is the “what” of the enterprise. It may be the most obvious fact of any organization, but all too often managers fail to communicate the mission to their employees. Understand the values. If mission is the
“what,” then values establish the “how.” Values are what hold the organization together. You can consider values as the set of principles that underscore purpose—that is, what we believe and why we believe it. Know the roles and responsibilities. When employees understand their role as it pertains to the mission, they can do their jobs with a greater sense of purpose. Create opportunities. Mission and values are
LEADING THE WAY LEADERSHIP QUESTIONS • What do I do to honor the spirit that my employees bring to work every day? • How well do I show my appreciation to my team? LEADERSHIP DIRECTIVES • Communicate the organization’s vision to all employees. Be clear, coherent, and consistent. • Ask teams to develop vision statements that complement the organizational vision. • Find ways to make the mission tangible to all employees—that is, link it to job function and job task. Make the connection between what an employee does and how that job complements purpose. • Set clear expectations for behaviors that model organizational values. Hold yourself accountable first. • Find ways to reward individual achievements. • Create a culture of recognition that is timely and meaningful. Pats on the back are great, but you also need to find ways to show employees that you and the organization truly care about them as contributors.
fundamental, but in themselves they lack momentum. Movement comes from translating purpose into action. But before that can happen, you need to think about what needs doing and why. The act of creation for an organization becomes that of translating purpose into roles and responsibilities—that is, into who does what. Encourage collaboration. Clarity in purpose as it relates to mission, values, and creativity
enables employees to share an understanding of what is expected of them. They have what is necessary to work together, but even better, they have the impetus to collaborate. Achieve execution. Getting the job done is the prerequisite for success. Purpose sets up what
needs to be done, but employees determine what actually gets done. They must be capable and competent and must have the tools and resources necessary to complete the job. Purpose can be a powerful catalyst to performance when it is channeled in ways that enable employees to see what is expected of the organization and what is expected of them to help the organization achieve its intended results. MW John Baldoni is an internationally recognized leadership educator, executive coach, and author of many books, including Lead by Example, Lead Your Boss, and Lead with Purpose. Excerpted, with permission of the publisher, from Lead with Purpose: Giving Your Organization a Reason to Believe in Itself by John Baldoni. Copyright 2011, John Baldoni. Published by AMACOM. For more information, visit www.amacombooks.org The most successful leaders have the best people skills. Develop the capability for professionalism, empathy, optimism, partnering, loyalty, and empowerment at AMA’s course Achieving Leadership Success Through People. To learn more about this course, visit www.amanet.org/2128 MWORLD SUMMER 2014
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The New Dominance of Virtual BY DONNA DENNIS, PhD, MILES OVERHOLT, PhD, AND MARK VICKERS
Are virtual teams and their leaders really any different from traditional teams and their leaders? Yes, and those differences can have a major effect on the success of virtual teams and the organizations that use them. It’s hard to overstate the critical role that virtual teams are playing today. They are the new normal, according to a major study conducted by the Business Research Consortium (BRC) in association with American Management Association. In fact, they may well be the primary way that work gets prioritized and coordinated in the world today. Nine of 10 of the more than 1,500 survey participants said they had virtual teams in their organizations. Even more impressive, more than half had attended seven or more virtual meetings over the previous month, while slightly fewer than half had attended as many traditional, co-located (that is, occurring in one physical space) meetings. In short, virtual teams have become the team framework of the digital age, giving a company the means to blend the best talents and perspectives from anywhere in the organization. The BRC study shows that, when managed effectively, virtual teams increase productivity, help meet organizational goals, and improve the quality of work. But, to get the most out of virtual teams, leaders should understand the biggest challenges facing the teams and the key practices for overcoming those challenges.
THE EVOLUTION OF VIRTUAL TEAMS There is much to learn about virtual teams, but organizations do seem to have gotten better at leveraging them over the past decade or so. Ten years ago, research from Professors M. Hoegl and L. Proserpio showed that distance hurt performance. Dispersed teams often failed to perform important tasks effectively and were unable to realize their potential. Part of the problem was, and still is, poor virtual leadership. Back then, there seemed to have been an assumption that good leaders would just know how to transfer their conventional team skills to a virtual environment. In fact, a Society for Human Resource Management study in 2006 reported that 80% of respondents said special training was “not at all” a priority for virtual leaders. And that was despite research—published in 2005 in The Leadership Quarterly— showing that leaders working at a distance needed to work harder at relating to associates’ needs and aspirations to have the same level of positive impact that they would need close up. 18
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Teams and Leaders
Have companies since made progress? We think so. Two-thirds of the respondents to the BRC survey indicated that virtual teams have a high ability to meet or exceed business goals. At the same time, though, the study indicated that there are serious challenges facing teams, some of which involve leadership.
THE STATUS OF VIRTUAL TEAMS TODAY Although managing virtual teams has improved over the years, such teams remain complex and, in some cases, unwieldy. One reason for the complexity is the large size of many teams. The largest cohort of respondents said that the virtual teams they work on typically include 7 to 10 members. More than a quarter said their typical team size is at least 11, and 14% said such teams include more than 14 members. Optimal team size—even among co-located teams—is estimated to be in the range of 4 to 9, suggested Evan Wittenberg in the online journal Knowledge@Wharton. Therefore, a significant proportion of virtual teams are likely unwieldy or inefficient in terms of scope. Added to the sheer size of such teams are the complexities related to time, culture, and physical distance. Among experts responding to the BRC study, more than 80% said they worked for global organizations, and nearly as many said they worked in corporations with more than 1,000 employees. Therefore, it wasn’t surprising to find that three-quarters of respondents said their teams spanned multiple time zones, and about half of the teams were global. Also adding to the complexity, 66% of virtual teams were cross-functional, meaning members brought with them a variety of mindsets, functional jargons, and competing priorities.
THE PRIMARY CHALLENGES FACING TEAMS Virtual leaders must be ready to meet the challenges associated with these complexities. Indeed, we found that a greater number of time zones and “higher diversity in terms of nationalities and cultures” were two of the most widely cited challenges when it came to leading such teams. Those are not, however, the only challenges. In fact, when we asked about the major challenges to virtual team meetings (as opposed to virtual leader success), we found that having “insufficient time to build relationships” was a major concern. MWORLD SUMMER 2014
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Another major difficulty is multitasking by virtual team members. The responsibility demands more tasks, and study after study has shown that people are not very good at multitasking, despite their best efforts and their claims that they are good at multitasking. In fact, according to some research, multitaskers have been found to make up to 50% more errors than those who concentrate on one activity at a time. Yet, even though our expert participants viewed multitasking as a key problem, they also admitted that they too do a lot of multitasking. In fact, about half of them said they often or always multitask during virtual meetings.
KEY LEADERSHIP PRACTICES FOR VIRTUAL TEAMS Both leaders and team members must cope with these and many other challenges (the study looked at 19 different factors). To do so, they can use tactics and characteristics associated with highly successful virtual teams. Below are seven suggestions for companies that want to improve the efficiency and effectiveness of their virtual teams. 1. Remember that good virtual leadership is different. It is tempting to believe that
traditional leadership qualities are so general that they easily translate to virtual team leadership. Unfortunately, that is just not true. 2. Emphasize communication even more. Yes, nearly every leader has been told to
“communicate, communicate, and then communicate some more.” What is true for leaders in general is doubly true for virtual leaders. In fact, it’s usually true for all virtual team members. Fully 72% of respondents to the BRC survey strongly agreed with the idea that virtual teams require more team communication than do co-located teams. 3. Adjust to the medium. The study shows that team member engagement is strongly
influenced by the degree of visual feedback members are getting. For example, participants in voice-only virtual meetings (the kind so common in the corporate world today) are much less likely to be engaged than participants in face-to-face meetings and in meetings with high-quality videoconferencing. Without a visual element, leaders must do things such as: Pick up on more subtle cues (such as tone of voice) Know nuances of cross-cultural communication ៑ Ask more questions to get to a common understanding of a problem or an issue 4. Do more to establish trust. Because virtual team members often lack the time and opportunities to talk to each other informally, trust can be hard to build. The best virtual leaders tend to build “swift” trust, knowing that distance makes it more difficult. They provide goals, roles, responsibilities, strategies, and a vision to create a common purpose and shared objectives. They establish agreements and make expectations clear so that all team members understand responsibilities and proper etiquette. ៑ ៑
5. Develop robust processes and, where needed, structures. Not only must virtual leaders
make expectations clear, they also must establish more checkpoints with explicit guidelines. 6. Reduce or avoid “storming” when possible. Back in the 1960s, Professor Bruce Tuckman developed the idea that teams need to go through four stages: forming, storming, norming, and performing. Virtual teams are different in that the “storming” stage (during which different members strive for a time to put forward their ideas) is often curtailed. This does not mean virtual teams need to avoid all disagreements and conflicts, only that leaders and members should be proactive and handle different perspectives right away, as opposed to letting them linger. 20
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ESTABLISHING TRUST ON TEAMS How does the concept of trust figure into virtual teams and leadership? The BRC study had two major findings in this area. First, nearly two-thirds of respondents reported that, in their organizations, establishing trust on virtual teams was a challenge, and almost a third said it was a major challenge. Second, about half of participants strongly agreed with the idea that virtual teams require a greater emphasis on trust than do co-located teams. It is, therefore, clear that virtual leaders need to do more than conventional leaders to establish and maintain trust. But that is easier said than done. Because social interactions are less frequent on virtual teams, trust is not usually built via informal socialization. Instead, trust tends to be “task related,” meaning that it is established when team members demonstrate to one another that they can deliver on promises. Credibility becomes the foundation for early trust. Virtual leaders who create a common set of expectations, norms, and goals make it easier for team members to establish such credibility. After all, if all members have a clear idea of which tasks they need to complete, it will be easier for them to succeed, winning trust among their fellows.
Virtual leaders can take other steps to encourage trust as well. They include: • Create at least one opportunity for team members to meet face-to-face • Use communication channels that include visual input rather than just audio • Model transparency by communicating openly and honestly • Plan extra time during meetings so there can be some virtual socialization and team building • Keep agreements and demonstrate accountability • Acknowledge successful teamwork
7. Devote resources to development. Most organizations do not develop leaders and other
employees in the art of virtual teaming. Yet, the BRC study indicates that a lack of experience among members of virtual teams is a serious challenge. Therefore, we think it pays to educate not only leaders but also potential team members about how to thrive in a virtual team environment. The study also indicates that first-level and middle managers tend to have fewer virtual leadership skills than senior managers and project managers.
THE FUTURE OF VIRTUAL TEAMS Good talent management practices, such as those listed above, are more important than technologies when it comes to operating successful virtual teams. Technologies do, however, play an important role. The technologies for team communications are constantly shifting, with vendors adding a stream of new features to address their customers’ concerns. MW The authors—Donna Dennis, PhD, Miles Overholt, PhD, and Mark Vickers—conducted this study in conjunction with American Management Association. Dennis is the principal at Leadership Solutions Consulting, LLC. Overholt is the principal of Riverton Management Consulting Group. Vickers is currently principal at Vigoré Publications. All three are founding members of the Business Research Consortium. For more information about this study and BRC, please go to www.leadership-solutions.info/BRC.html or inquire by email to brc@leadership-solutions.info The leader of a virtual or remote team must successfully apply special insights and techniques to guide performance and work relationships with employees who may be hundreds or thousands of miles away. Develop these capabilities by attending AMA’s course Leading Virtual and Remote Teams. Learn more at www.amanet.org/2280
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Make More Mistakes: The Key BY STEPHEN BALZAC
We are taught in school that we must avoid mistakes. Mistakes mean a lower grade and potential failure. In business, mistakes cost money, and wasting money is a cardinal sin. Mistakes are bad. An efficient system is frequently described as one in which there are no mistakes. People, however, only learn by making mistakes. This creates a problem. In a truly efficient system, there would be no opportunity for people to learn. When there is no learning, the system will eventually fail: It becomes rigid or it stagnates, failing to adapt to changing conditions in the environment. Innovation decreases as intolerance for mistakes increases. Cultures are the residue of success, of lessons learned over time. Learning those lessons is comforting, and knowing how not to get burned a second time is generally a good thing. Unfortunately, innovation only comes about when you’re willing to risk that burn. Innovation is a process that feels inefficient and requires a great willingness to make mistakes. When a company is first starting out, it’s innovate or die. As the company evolves, though, innovation becomes more difficult or focuses on improving products and processes with which the company is already comfortable. Mistakes are seen as punishable offenses, rather than opportunities to create the next big thing. The fear of mistakes starts to prevent experimentation and exploration. Tolerance for risk gradually decreases as the company becomes convinced that it is in control of its environment.
THE CONNECTION BETWEEN ORGANIZATIONAL CULTURE AND INNOVATION A company with a strong track record of success and a strong corporate culture may come to believe that it controls its environment. IBM, for example, once dominated the computer industry. This domination led to a belief that it controlled the environment—that its domination would continue indefinitely. Instead, the environment changed. It turned out that what IBM truly dominated was the mainframe market, and it was caught flatfooted by the success of the IBM PC. IBM was, literally, a victim of its own successes. It had learned how to sell big iron, and those lessons became part of the corporate culture. IBM reflexively applied those lessons to a new market and a new breed of engineers, and it ended up in deep trouble. In 1992, IBM imploded. What saved the company, beyond bringing in Lou Gerstner, was that the crisis also reactivated IBM’s innovative streak. Faced with destruction, it was willing to take risks again. Radical innovations, by definition, involve leaping boldly forth into unknown territory. Success 22
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to Innovation is impossible to predict, and precise costs are difficult to determine. Indeed, progress forward may require a great deal of faith, especially in the early stages. Faith, however, can be extremely difficult to sell to a company’s executives, who ultimately decide how to allocate resources. Organizational culture defines the way people are supposed to think. People who think and act too differently may well be excluded from the organization. However, productive argument and constant questioning are vital to successful innovation. Thus, innovative behavior and thought walk a fine line of thinking differently but not too differently. This mindset leads to minor innovations, improving the current products or methods of doing things. Too radical a level of dissent will frequently result in a crushing response instead of an effort to understand the reasons. We thus see that organizations can be caught up in the pressures of their own success, which leads them to fall into one or more culture traps that can impede or stifle innovation.
WHAT ARE THE TRAPS FOR ORGANIZATIONS? Despite all the stories about a guy in a garage, innovation is not the province of the lone genius. Or, to put this slightly differently, two guys in a garage can start a company, but they aren’t enough to sustain it. Innovation is a group effect. It’s up to you to create an environment that fosters creativity and innovation. The first step to doing that is avoiding the traps. THE PERFECTION TRAP
I once worked for a software startup that wanted to ship an absolutely perfect product. Of course, no one knew what a perfect product looked like. There was a great deal of very imaginative thinking, but little actual reality was allowed to intrude. Even the customers didn’t really know what a perfect product looked like. Without having something to play with, their image changed with the situation. The result was a moving target. While the product did ship eventually, no one liked it. Microsoft, on the other hand, was famous in the 1990s for shipping “beta” software. The managers correctly deduced that people would rather have usable software now than perfect software later. IBM did much the same thing in the 1960s and 1970s. In both cases, the companies shipped an “imperfect” product, and MWORLD SUMMER 2014
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thereby gave the customers something to play with. The feedback they obtained enabled IBM and Microsoft to further fine-tune their offerings. This tells us that good enough beats perfection, as long as the customer thinks it’s good enough. How do you find that out? You ask, in much the same way that Microsoft and IBM once knew how to ask. That way you don’t have to guess. Naturally, once something is successful, we want to improve on that success. On one level, this is great: The first crude PCs became the elegant laptops that we carry around with us. The first crude iPod became the iPod Touch, the iPhone, and the iPad. Each successive improvement is smaller, though. More and more effort is going into perfecting what is already there. Fundamentally, whatever leads to success will be remembered and become part of the culture. What is usually remembered is not the early, risk-taking behavior. Rather, it is the much more recent and longer process of perfecting the product. The risk itself starts to be forgotten or dismissed as unnecessary. The company becomes used to success and forgets how to explore. This is the perfection trap in action: the belief that there is no longer a need to take risks. The path to success is to stop taking risks and just perfect what we’ve got. THE PROTECTION TRAP
Let’s move now from the perfection trap to the closely related protection trap, also known as “don’t hurt our existing products!” Kodak and Polaroid were both slow to adopt digital photography, in large part because of their extensive investment in the film business. Nikon, on the other hand, made cameras. The company didn’t much care what the “film” was, so it had no problem impacting its existing product line. Digital photography was, metaphorically, just another type of film to Nikon. The products that are making us successful are enshrined in the organization’s culture. They are part of how the company works, part of its history. The more time, energy, and money that have been invested in a product, the more holy it becomes. Any given product line is, however, not a marriage of love but one of convenience. The science fiction writer E.E. “Doc” Smith once wrote that “what science can synthesize, science can duplicate.” In other words, sooner or later, someone will find a way to make hamburger of your cash cow. Just ask the record companies about iTunes. In the end, the protection trap is the belief that if you don’t compete with your own products, neither will anyone else. If you believe that, I’ve got a bridge to sell you… THE IDENTITY TRAP
The identity trap occurs when a company says, “We’re an X, not a Y.” When a company becomes focused on perfecting its products and starts putting more and more effort into protecting its product line from itself, it risks falling into the identity trap: It defines itself as its products. Thus, pre-Gerstner IBM was a “hardware/mainframe” company. GM is a car company. Walt Disney had to fight with his board to convince them to build theme parks. They saw the organization as a “movie company,” and moving into theme parks required a shift in self-image. The biggest danger of the identity trap is that brainstorming is stifled and ideas are stillborn because no one can see how they fit into the identity box. 24
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THE CREEPING BOX TRAP
It’s a great thing to think outside the box. Indeed, the further out you can get and still create a viable business, the better. Yahoo, for example, was one of the pioneers of internet search and advertising. Yahoo’s stock performance during the 1990s says something about how far outside the box the company was—it was one of the best-performing stocks from 1996 to 2000. But what happened to Yahoo? Fundamentally, the box got bigger. At one time outside the box, Yahoo was eventually engulfed by it. Whenever you successfully think outside the box, you demonstrate that there’s something out there. The box grows. If you don’t keep moving, sooner or later you’ll be back in the box. In the creeping box trap, the company becomes so focused on polishing its new box that employees forget how to get outside it. Even worse, they have become so used to being outside the original box that they do not recognize they are in a new box. SPOT PROBLEMS EARLY
THE ART OF NOT MAKING A LIGHT BULB Thomas Edison once said that he hadn’t failed, he’d learned a thousand ways how not to make a light bulb.
TAKE A BREAK
KEEP LEARNING
That’s easy to say. It’s hard to live by. It’s not enough to avoid the four innovation traps. There are also four things you need to do to foster a consistently innovative environment.
BE PATIENT
Keep learning. Increased learning leads to increased innovation. The more information people have, the more likely they are to come up with unexpected connections. Encourage people to take classes in a wide variety of subjects. You never know what synergies will come out of it. Spot problems early. Innovation is often likened to Athena springing forth fully formed from the
brow of Zeus. It is ironically appropriate that a mythological belief should have a mythological reference. Most innovations involve learning a thousand ways not to make the light bulb before you start to see success. The goal is not perfection, which is not possible, but being good enough. Take a break. Taking breaks reduces burnout and increases motivation. Be patient. For all that necessity is the mother of invention, birth still takes time. If you wait until your sales are drying up, it’s too late.
The key to successful innovation is being willing to be wrong a lot of the time. The secret is to be wrong in useful ways. So long as your innovative new product is useful, people will forgive a lot. MW Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Balzac is the author of The McGraw-Hill 36-Hour Course: Organizational Development and Organizational Psychology for Managers. For more information, or to sign up for Balzac’s monthly newsletter, visit www.7stepsahead.com. You can also contact him at steve@7stepsahead.com. This article is drawn from Balzac’s first book, The McGraw-Hill 36-Hour Course: Organizational Development. Learn proven creative thinking techniques to generate new ideas and, better yet, create a climate for innovative thinking at AMA’s course Creativity and Innovation: Unleash Your Potential for Greater Success. Find out about this course at www.amanet.org/2208 MWORLD SUMMER 2014
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CREATIVE
INSIGHTS
Unleash Your Organization’s Potential for Innovation Through Collective Genius BY JAY MATHUR To survive and thrive in this era of global competition, businesses must continually innovate to deliver superior products and services and create better customer experiences while being cost competitive. Increasingly, they are looking for ideas, expertise, and resources from external parties, such as consultancies, academia, research organizations, and professional societies, to help them meet this challenge. In my firm’s work across a variety of industries, we have seen companies that strive to make huge organizational transformations but fail in the effort to innovate because they didn’t realize that the major asset in their competitive arsenal was right in front of them. It’s the very people within and around the organization’s ecosystem—coworkers, customers, suppliers, alliances and partners, and even competitors—who are the most knowledgeable about the business. These are the individuals who can help create and execute innovative solutions to the complex issues a company is facing. We define innovation as the creativity of a diverse group of knowledgeable people—the collective genius—applied to create new solutions to specific issues or opportunities that deliver tangible and superior value. THE INNOVATION CHALLENGE
Collective genius is the application of the cognitive diversity of a group of people who ignite their innate creativity to define a problem, generate ideas, and create leading-edge, innovative solutions to issues or opportunities. Companies must tap into this collective genius. WHAT IS THE COLLECTIVE GENIUS?
“A diverse team of knowledgeable people creates far superior solutions to those devised by a few brilliant individuals.” 26
As the scope of our interactions enlarge, so does the enormity of the daily challenges we face. From geographically diverse customers with unique needs to global supply chains, the complexity of business issues has grown to the point that a few smart people in cubicles are not enough to create solutions that drive a sustainable competitive advantage. It takes a team of people with different types of expertise and skills to address and resolve problems collaboratively. Most businesses have acknowledged this reality and structured their work around teams or groups, but they must go further. In our experience, a diverse team of knowledgeable people creates far superior solutions to those devised by a few brilliant individuals. Diverse teams are better at prediction, problem solving, and innovation, and the solutions they create are more robust than those of individual performers. So why doesn’t every team and organization create innovative and breakthrough solutions to the issues they face? Having a number of people in a team does not mean it is diverse. In fact, some team compositions may be downright bad for an organization. We’ve all heard the phrase “too many cooks in the kitchen” used to describe chaos and dissension. However, if those “cooks” collaborate on a recipe by applying their unique experiences and background, a superior broth will result. DIVERSITY TRUMPS ABILITY
Cognitive diversity encompasses more than race, ethnicity, color, gender, and sexual orientation. Clearly, our identity and background play a significant role in how we perceive the world. They’re an important part of cognitive diversity, but they’re not the whole picture. Cognitive diversity means each of us is the product of factors such as our background, education, training, interests, and professional and social experiences. These factors shape the way we look at the world and, ultimately, the way we view, categorize, approach, break down, and create potential solutions to problems. The combination of these factors shapes how LEVERAGING YOUR COGNITIVE DIVERSITY
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we observe, draw inferences, and form points of view on issues and analyze and develop solutions. In most cases, effective teams not only have more tools (ability) but also a varied collection of tools (diversity) that allows them to better solve problems. A group of people with comparable backgrounds, education, and training will have similar tools. And this team will be markedly inferior to the group whose members have different backgrounds and a diverse set of tools to use in creating innovative ideas and solutions. By leveraging your organization’s cognitive diversity, you will be better able to create innovative solutions and build a culture of innovation and excellence. All of us are born with creative potential. We apply and grow that potential as we progress through life, discover new opportunities, and find different ways of doing things. Human beings are innately creative. It is our experience, however, that businesses and organizations often underutilize and stifle individual creativity. Corporate structures and processes such as performance measurement systems steer people toward a set of defined directions, focuses, behaviors, and norms, boxing them into a limited playing field and undermining their creativity and potential for innovation. Under the right conditions, the application of cognitive diversity sparks a chain reaction. Cognitive diversity helps ignite the innate creativity of individuals and groups, and this creativity spirals into a powerful force of collective genius. The collective genius, in turn, unleashes the greater potential for innovation needed to create solutions that drive competitive differentiation in the marketplace. So how do you start this powerful chain reaction? Consider these key points: FROM COGNITIVE DIVERSITY TO COLLECTIVE GENIUS
1. The organization must have a clear definition of the issues that need to be resolved. This critical
step creates focus, provides direction, and defines the stretched targets for which people should aim. An unclear, unfocused effort, on the other hand, may waste critical organizational resources, lead to frustrations among the participants, and ultimately result in the failure of the effort. 2. The organization must aspire to be the best, and its leaders must commit to excel and execute. MWORLD SUMMER 2014
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A case for being the best in your business and factbased data to show the potential are important foundations. The leadership’s commitment to excellence and the potential to achieve it motivate and challenge the organization to be the best in the business. 3. Size and diversity matter. The cognitive diversity of a team is critical, especially when addressing complex issues. Leaders must carefully select individuals for the team who represent the necessary diversity in background, education, training, experiences, and so forth. Additionally, traits such as personality, organizational role and status, and opinion and thought leadership are important considerations for group dynamics. The size of the team is usually dependent on the difficulty, complexity, and scope of the issues being addressed. Group sizes can range from 10 to 100. Too small a team may undermine the potential for innovation and the robustness of the proposed solution, whereas too big a team may be chaotic and unwieldy and thus hamper team performance. Balance these needs against the problems at hand to determine the ideal size of your working team. 4. An open and creative environment is essential. People must be free to express their ideas without
constraints and judgment. An environment of openness is essential if the group is to break through the shackles of current thinking. All ideas and points of view must be respected, no matter how outlandish 27
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“Unnecessary delays kill momentum and the enthusiasm for collaboration.” they may seem at first glance. A group that encourages learning from one another will create new and better ideas. 5. A fast, collaborative process is key. Communication and collaboration are fundamentally important in generating breakthrough ideas and concepts. In this, speed is key. 6. The solutions developed must be implemented. The collective-genius approach generates
tremendous enthusiasm and buy-in from participants who generally represent a large cross-section of the organization. This energy must be channeled to drive dramatic changes in the organization. Failing to implement solutions after such a creative effort is akin to not watering a seed that has been planted. Implementation is critical in transforming toward a culture of excellence and innovation that has the potential to deliver increasing returns on your invest-
ment over the long term. This is why upfront commitment from the leadership to execute solutions is critically important. Organizations significantly underutilize their innate creative potential. By applying their cognitive diversity contextually and with certain conditions, companies can ignite dormant creativity and unleash their collective genius to develop leading-edge solutions to complex challenges. MW Jay Mathur is founder and CEO of valueideas, a consulting firm that helps organizations unleash their creativity to develop and execute innovative solutions to complex challenges faster and with superior results. Mathur consults with senior executives in a wide range of companies from various industries. He believes that strategy development and execution should be everyone’s business, not just senior management’s. For more information, go to www.valueideas.com Your team is in a position to identify problems, find solutions, and suggest new ways of obtaining sustainable growth. Reap these rewards from attending AMA’s course Developing Team Creativity and Initiative. Find out more about the course at www.amanet.org/70210
Powerful tools for serious leaders. AMA Bestsellers
• PUBLISHING DIVISION OF AMERICAN MANAGEMENT ASSOCIATION Available at bookstores, online booksellers, or visit us at www.amacombooks.org 28
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Why CHANGE MANAGEMENT Should Be a TOP PRIORITY BY JOY E. TAYLOR AND MONICA MORGAN
Charles Darwin once said, “It is not the strongest that survives, nor the most intelligent; but rather the one that is most adaptable to change.” Clearly he was a visionary—the scientist who defined evolution and its importance in understanding how human beings work. On many occasions, we sit and wonder, does anyone else truly understand that change will happen and that change management is a priority? The only place where the profession of change management consistently operates at the highest level appears to be in the world of politics. By tracking the workings of the White House via your favorite news source or by watching a few episodes of The West Wing, House of Cards, or even Scandal, readers and viewers alike quickly understand the connection. Do people really think events materialize by happenstance? Or that people who start out resisting something new accidentally change their minds? On the contrary, as depicted in these series, countless hours of research are conducted, stakeholder maps are detailed, communication strategies are worked and reworked, messages and messengers are tested and rehearsed, and delivery channels are leveraged. All of this is orchestrated by teams of people who specialize in change management. So if companies want transformational change to take place with the precision of these political engagements, then we strongly suggest elevating change management and fully engaging these specialists when the desired change is a twinkle in the board’s or management committee’s eye. Today, senior managers representing all major industries are talking “big” about making transformational change—meaning changing the way they work with their customers, changing the speed at which they access data and make decisions, and even altering an organization’s culture in order to encourage and sustain innovative solutions. A 2010 survey by Innosight found that companies listed on the S&P 500 Index in 1960 stayed on that list for approximately 61 years. By 1980, companies survived on the index for approximately 25 years, and by 2010, companies endured on the S&P 500 for only 18 years. If this trend continues, 75% of companies currently listed on the S&P 500 Index will not be there in 2030. Clearly, it is MWORLD SUMMER 2014
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“Resistance is a guaranteed fact within a transformational change effort, so prepare your leaders to deal with resistance, even obstruction and sabotage.” becoming harder and harder for companies to survive at the top, but we argue that taking charge of how change happens can be a differentiator. Sadly, change management has become a label that is often used but rarely understood. Too many people see change management as “code” for an organization that is about to take costcutting measures or restructure.
KEEP THE VISION CLEAR Presently, when organizations kick off a transformation effort, they often neglect to share the story of the change with the people. Transformational change may take years—many years, in fact. People will buy into the short- and long-term plan as long as they share in the future vision and the benefits. Knowing this, you must prepare your senior managers to respond to questions and be regularly visible to the entire company. Resistance is a guaranteed fact within a transformational change effort, so prepare your leaders to deal with resistance, even obstruction and sabotage. If you understand the various stakeholder communities, it’s likely that you know where the resistance is most likely to surface. You can then build proactive tactics to deal with your change management strategy and create regular milestone dates for sharing progress (and perhaps setbacks) that keep stakeholders and employees “in the know.” This makes them feel like they are a part of the process from start to finish.
ALIGN STRUCTURES AND REWARDS A company structured by functions will be challenged to overcome silo mentality and behavior. Power conflicts will arise, and a political change management strategy may be required, depending upon the culture of the organization. When undertaking a transformational change effort, a company must develop messaging and communications, supported by appropriate incentives, that create a shared vision and an alignment of executive leadership. Without such a comprehensive framework, you can expect the organization to take much longer to achieve its goal or value realization. And as a result, more resources (time, money, and staff) will be required to make the change last. The second component in this change management requirement is the alignment of a reward system. So many organizations target value realization as a transformation goal but forget that there may be functional incentives in place that are in direct conflict. Having too many reward systems in place will drive only functional agendas. Instead, be clear and drive company metrics around the broader transformation. Reduce narrower scorecard metrics. Simply stated, if you do not change direction, you may end up where you were heading.
BUILD CAPABILITIES A 2012 survey by Crimson & Company in the UK found that 80% of employees operating in an organization in the midst of transformational change felt that the leadership style needed to 30
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change. The most commonly identified attribute was to move from a directive to a transformational management approach. This shift may require hiring or elevating talent that knows how to lead an organization through the transformational journey. Often, this leadership comes down to consistently communicating crisp and even aspirational messaging, clearly supported by proof points, to motivate the organization to be resilient and to endure the discomfort of the change. When it comes to putting a multiyear, multigenerational project approach into play, it is wise to bring in an experienced team to enable long-term success. Recognize that existing leadership may not have the skills for leading a transformational change and provide them with a coach or consultant who can help plot the journey and guide them through the change. In the future, they will become the “experienced” leaders, so don’t ask them to learn on their own while the transformation needs to be under way. If you do, you can expect errors that could prove too costly to absorb.
REALIZING THE FUTURE When transformation takes place, it’s a fact that some strong talent will leave the organization, often because they cannot withstand the uncertainty. You will need to prepare your high-potential workforce to step in when the moment presents itself. The company must devote time to training people at all levels, reinforcing its commitment to them and their future in the new organization. The training may be functionally specific, especially if the transformation sets new outcome expectations for the functions. Or it can focus on broader development topics like process management, change management, communication, and even diplomacy. Just make sure to focus on developing leaders within the company. To sustain transformational change, you must implement tools such as communities of practice and regular town halls, frequently communicating up, down, and across the company to reinforce the change that has occurred and the benefits that have been realized. If you take away only one message from this article, let it be this: To achieve transformational change, you must make change management a top priority. MW Joy Taylor is the cofounder and CEO of TayganPoint Consulting Group and can be contacted at jtaylor@tayganpoint.com. Monica Morgan is a senior consultant at TayganPoint Consulting Group and can be contacted at mmorgan@tayganpoint.com Enhance your ability to respond to complex and unpredictable business changes by mastering the competencies of agile leadership at AMA’s course Strategic Agility and Resilience: Embracing Change to Drive Growth. Find out more about this course at www.amanet.org/2546 Consider, also, AMA’s one-day workshop—Change Management Workshop—where you will build trust and commitment and achieve positive results through change initiatives. For program information, visit www.amanet.org/2871
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FIVE PIVOTAL DECISIONS in BY JULIA TANG PETERS
The best understanding of leadership comes from leaders who are both extraordinary in their achievements and viewed as role models in their communities. So in researching my new book, Pivot Points, I sought out industry-changing leaders—ones who were proven but lacked the swagger of self-importance—and had probing conversations with them about how they did what they did. What I learned from these leaders is that, first, leadership is about making certain decisions. It’s not about “do’s and don’ts” or leadership traits and habits. Second, the decisions that stood out in these leaders’ stories were those they made when they held themselves accountable and had to use more ingenuity than usual. Third, every one of them had faced exactly five decisions that turned their careers into leader-building journeys. Each of the five leaders I interviewed for my book grew and evolved one pivotal decision at a time. Their stories show how five pivotal decisions clearly stand out—among hundreds of other important work decisions they had also made—as the ones that determined their journey to leadership. For these leaders, the pivot points served as career builders, although the decisions involved often presented themselves first as career stoppers. That is the dynamic of pivot points: They can show up as positive or negative events. The decisions can turn out for the better or the worse. They can be catalysts of growth or leave careers to languish. This developmental perspective focuses on the decision to lead conscientiously, which is distinctly different from decisions that are motivated only by personal gain. Some people, when facing a decision that weighs heavily, focus on what’s better for them. Others look at what’s best for the business and team. Some people see only conventional or comfortable options, while others come up with unconventional ones, perhaps outside the comfort zone of an individual, team, or company. Leaders often cite luck for pivotal successes, but in many cases, it was adversity turned into opportunity that catapulted them to success. As heavyweight champion boxer Mike Tyson said when asked what he knew about his opponent’s fight plan, “Everyone has a plan until they
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the Development of a LEADER The Turning Point
get punched in the mouth.” Plans serve a purpose, but the champion is the one who instinctively connects with the spontaneous opportunity.
DECISIONS ON THE LEADERSHIP PATH
The Launching Point
What are these five pivotal decisions that brought the gifted leaders I studied to a series of new opportunities and challenges and to new stages of personal and business growth? They are: The launching point. The launching decision involves a
commitment to master specialized skills and do more than your job. The launching point moves leaders out of their comfort zone. It captures the imagination and transforms work into something more than an income-producing venture.
The Tipping Point
5 PIVOTAL DECISIONS
The Letting-go Decision
The Recommitment Decision
The turning point. The turning-point decision concerns an important opportunity or
problem that usually creates a bold new direction. At a turning point, the confluence of a willful decision to do more and the pressing need—or opportunity—to take action unleashes an extraordinary verve to take the business to the next level. It’s a decision to build a sustainable business that can flourish and not just survive. The tipping point. The tipping-point decision, which involves significant risk, breaks through
a fundamental barrier. The tipping point catapults leaders into the work of leading rather than the work of mastering a subject and running the business. At this point, success already achieved has allowed leaders to fully express their business vision, leadership values, and signature talents. Now, they are honing the art of leading. The recommitment decision. There comes a recommitment point when leaders look at where
they are and where they want to go, knowing they need to either renew their commitment or leave. Quite simply, things happen. For many, disruptive change occurs because the company is acquired or becomes an acquirer. For all, this stage is primarily a decision to recommit to oneself—to the individual’s North Star. For some, it may be a decision to recommit to the same enterprise; for others, recommitment to self means deciding to do something different. The letting-go decision. Everyone must face the letting-go point. It can occur when the leader decides another priority or opportunity beckons, when business conditions require a “hold ’em or fold ’em” decision, or when it’s simply time to plan for succession. The ultimate test of leadership is letting go at a time of strength so that others can carry on the work. The lettinggo point is pivotal in defining the terms of the leader’s legacy.
These five pivot points do not necessarily occur linearly; they can occur in a zigzag fashion.
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Over the long haul, however, one can pick out the most impactful decisions that marked a progressive march forward, despite setbacks, and resulted in career-defining achievements.
FEATURES OF PIVOTAL DECISIONS While these seminal moments of abundant energy and imaginative thinking come to leaders at different times and in different ways, all possess five common characteristics. In making pivotal decisions, leaders do the following: ៑
Hold themselves accountable. They do not do it alone, but they take full accountability
for making a decision and making that decision work. ៑
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Face a moment of truth when making a solitary decision. Leaders understand that the decision, boiled down to its essence, is one of being true to self. They may explore their options with people whose opinions matter, but in their decisive moment they know they are making a solitary decision that will test their wings. Call on an impassioned inner voice. The decisive moment transforms a leader’s way of thinking, from environmentally dependent to personally impassioned. Leaders transcend logic and linear thinking, making a pivotal decision that, even with rigorous analysis, comes down to a personal judgment call. Expand their belief in the power of one person and in the magic that many people working together can create. They know they need help. They have to make others
believe in the direction they set. They use their vision as its own currency, something of real value. See their work as the source of renewable energy. The decisive moment propels leaders to make something out of the ordinary happen. The more they do, the more they want to do.
To answer the question of whether this framework of five pivotal decisions is a widely shared experience, I worked with a research expert to conduct a nationwide survey of 500 collegeeducated adults in professional careers, representative of 16% of U.S. adults. To study the relationship between pivotal decisions and leadership, we zeroed in on the two most essential elements of leadership: accountability and ingenuity. Effective leaders hold themselves accountable for making something important happen. As part of taking full accountability, they also make others accountable for what is delegated to them. Ingenuity covers all the ideas, solutions, and vision that make up accountabilities. The study tested three hypotheses about leadership: 1. There are five pivotal opportunities to make decisions that determine the course of a career. 2. Both accountability and ingenuity drive leadership behavior. 3. When accountability and/or ingenuity fall short, other behavior sets produce outcomes less
successful than the leadership behaviors do.
ENGAGING WITH YOUR PIVOT POINTS Our study not only validated the pivotal-decisions framework but also showed how the five pivotal decisions can be career builders or career stoppers. Almost everyone in a professional career will encounter some of these pivot points, but not everyone will make an intentional pivotal decision. Some will not recognize the decision point, and others will simply not make a decision by waiting to see what happens. By the way, 34
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“We must define leadership as holding ourselves accountable and tapping our ingenuity to fulfill our best ideas and our best selves.” nonaction also is a decision. People who report that they haven’t had the occasion to make more pivotal decisions commensurate with their years of experience may, in fact, have faced pivot points with passivity—which was a decision but not a pivotal one. The evidence strongly suggests that leaders walk the path to greatness by fully engaging with all five pivot points, and that they make all five pivotal decisions with leadership accountability and vision. Between pivot points, they are human and can wade through times when they behave more like managers, wanderers, or clock punchers, the other decision-making behaviors our study revealed. At pivot points, however, they experience clarity and conviction about holding themselves accountable for fulfilling a worthy idea or vision. Our empirical study of the intersection of careers, pivot points, and leadership addresses the very real need for a new way to think about our careers. The careers of our parents and grandparents, who had one or two employers over a lifetime where tenure and long-term company relationships supported career development, will be rare. Instead, we must define leadership as holding ourselves accountable and tapping our ingenuity to fulfill our best ideas and our best selves. In this way, the individual is the self-aware decision maker who enrolls the support of supervisors, colleagues, and human resource executives in career development. Real leaders don’t have much use for job descriptions. The pivotal decisions they make shape their jobs and take them where they haven’t gone before and new lessons await. These decisions define what they want people to look to them for—and not look to them for—in their leadership. They choose the opportunities, threats, and headaches that they will take on as individuals and as leaders of people on a shared journey. Without making these clear decisions that set the leadership agenda, executives do the work of managing and not the work of leading. My personal definition of leadership is the belief in the power of one person and the magic of many people. The art of leading creates this magic. By leading with their minds and hearts, leaders inspire others to join their mission, to do more than they expected, and to achieve more than they thought possible. MW Julia Tang Peters is founder of Leadership Effectiveness Quotient, LLC, a leadership consulting firm (www.myleq.com). Previously, she was managing consultant at Hewitt Associates working with Fortune 100 companies. Earlier, she was chief marketing officer of Buzz Divine, helping to take the technology services company from startup to IPO in a year. She also served as managing director at Leo Burnett Company and account director at Frankel & Company. www.juliatangpeters.com Adapted, with permission of the publisher, from Pivot Points: Five Decisions Every Successful Leader Must Make by Julia Tang Peters. Copyright 2014, Julia Tang Peters. Published by John Wiley & Sons.
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The Five Elements of Effective BY RICK MILLER
You may not realize it, but every person on your team at every level of your organization has the potential to be a Chief.
Rick Miller
By that I mean that each has the potential to be a more effective leader, and you can make it happen. Let me explain. Based on 30-plus years of experience as a business leader, I have developed a roadmap that has enabled entire organizations to move from a position of losing market share to a place where record-level productivity and profits occurred right alongside personal development and relationship building—for everyone involved. You have likely been introduced to, and practiced, a variety of leadership styles, but I’m willing to bet that you haven’t considered the critical intersection that exists between the implementation of five key elements: discipline, support, creativity, insight, and values. These five elements make up what I refer to as the All-In Roadmap. With this roadmap, teams of employees have tripled the growth rate in million- and billion-dollar companies. Here are the five elements:
DISCIPLINE Discipline is an orderly pattern of behavior that increases the likelihood of a desired outcome. In business, it is the essence of management. Discipline begins with self-discipline. When you are able to adhere to a particular practice, set of parameters, or guidelines, you will effectively inspire others to do the same. There are five main choices when it comes to discipline. A Chief chooses to envision, strategize, plan tactics, implement and measure, and adjust. You can think of these five choices as the discipline toolbox. Implementing one or more of these choices on a regular basis will help you to be a better Chief. Here’s how: Envision: It is not only the duty of executives to provide the vision for an organization, it is an
opportunity for everyone. When you encourage each individual to choose and follow his own personally compelling vision, the energy behind people becomes boundless. Strategize: Your team will be more effective if you share your strategy—at least part of it—
with everyone. Plan tactics: A Chief understands the critical nature of detailed tactical planning and the role it plays in the probability of a strategy’s success. When all members of a team set their own 36
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Leadership
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SUPPORT
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work goals and are encouraged to give input during planning, execution is much more likely to run smoothly. Implement and measure: Success occurs when you plan the work and work the plan. Quality
implementation and careful measurement are the backbone of discipline. They provide shape and direction so that any project can move forward. Adjust: Change is the only constant. When a Chief recognizes this and creates an environment
that nurtures an optimistic perspective about change, then your team members feel comfortable seeking opportunity when change arises rather than recoiling in fear of the repercussions.
SUPPORT Support is the structure that holds an organization together. It is made up of tangible components such as offices, factories, and all things tech. It is made up of visible components such as the organizational structure, company benefits, and resources. But most of all, it is made up of the interactions—spoken and unspoken—that transpire between people. These interactions drive the pulse of an organization. Fueled with the proper support, your team can move mountains. Again, think of these five choices as the support toolbox from which you will utilize the tools you need to build a sound support structure. Model: The credibility required to build trust and earn respect comes from consistency. As an effective Chief, you will not only “talk the talk” and “walk the walk” but will be the talk and the walk. When you align how you talk with how you feel, think, write, and act—all in alignment with your values—your authenticity will be felt by your entire team. Inspire: A leader’s authenticity, as created by modeling, will also serve to inspire the members
of an organization. As an effective Chief, you will choose to inspire others as well as be open to be inspired by them. You will recruit and align people to a cause without relying on positional power, which will serve to better integrate your team as a cohesive whole. Enable: A great Chief is an enabler, in the best way. As a servant leader, you provide freedom MWORLD SUMMER 2014
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for individuals to exercise new capabilities and to choose to be Chiefs themselves. An organization thrives when people feel empowered and accountable. Encourage: When you choose to encourage others while also seeking encouragement
yourself, you will be able to change the underlying tone in any organization from one of resentment to one of respect. The ripple effect of encouragement has the potential to extend far beyond employees. Question: An effective leader has a natural curiosity and learns to foster this curiosity in others.
CREATIVITY Creativity is traditionally defined as it pertains to innovation, but I define creativity in an unconventional manner. I propose that creativity is actually the ability to create, or manifest, the future. There are five main choices when it comes to creativity. Chiefs create the future when they choose to feel, think, speak, write, and act in alignment with who they are. Your creativity toolbox will be used by continually checking to ensure that each of the following choices is made in a consistent manner with the others. Feel: When you are aware of and attuned to your emotions, you will have access to a strong
source of truth. Listening to gut instinct, which is very much a physical and mental feeling, is crucial for the fine-tuning required of a great Chief. Think: We all think, of course, but when you choose to actively think—that is, to manage your
thoughts—not only does your intellect become more organized but you also fuel the energy that will help to create the future. As the saying goes, “Watch your thoughts, they become words. Watch your words, they become actions.” Speak: As an effective Chief, you can choose your words carefully, acknowledging the energy behind verbal communication and the impact words have on the future being created. Write: The written word enjoys a greater level of permanence and impression. People have
long understood the power of the pen as a creative force to influence others. Writing is the action of bringing together feelings, thoughts, and words in a concentrated and powerful manner. I recommend utilizing this tool to be a more effective leader. Write down your thoughts and your dreams, and write away your fears. Act: Building on the previous creativity choices, our actions are the culmination of creativity.
We are held accountable for our actions more than for any other form of creativity. When you act in alignment with who you are, the ease with which your goals are met will increase along with the quality of your efforts.
INSIGHT Insight is the understanding that comes from self-awareness. Such powerful insight can be a challenge to discover in a world that appears to move faster and faster each day. The development of insight is key to increasing confidence and effectiveness. Be on the lookout for insight in the simplest experiences in life and from the least expected places. There are five ways you can learn more about yourself. You can develop the ability to know yourself in a way that you may not have previously considered. Be present: When you choose to be totally attentive and participate in the moment, the activity you are engaged in will be energized and you will be more effective as a leader. When present, 38
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you give 100% of your attention to the people with whom you are engaged. This simple practice can completely transform interactions and relationships. Be still: When you choose to be still for a certain period of time on a regular basis, you will
develop the ability to listen to the voice that matters most—your own. In this noisy and fastpaced world, the ability to be still will help any individual be a Chief. Be accepting: You have the choice to accept people and situations for
who and what they are. In doing so, you can avoid the frustration of trying to change people and change the past. The first step toward acceptance, however, is self-acceptance. Be generous: When you choose to be generous with your time, possessions, and money, you may find that instead of having less, you have more. Be grateful: A truly effective Chief will find gratitude not only in moments when everything is going well but also in moments of struggle. The grace required to face tough times and remain thankful is a blessing.
VALUES Values are the foundation of relationships and of effective leadership. Underlying each choice that an individual makes are his values. When you choose to make evident your own values, all while seeking out the values of other team members and the organization itself, you will become a more effective leader. I believe that values are a personal choice. Rather than list a set of values for you to follow, I urge you to take some time to choose your own values or reaffirm values you have already in place as a way to deepen your commitment to the driving force behind everything you do— business, personal, or otherwise. I offer these five elements as a guideline that you can follow, but know that you can implement these elements and their corresponding choices in a way that works best for your unique situation. You may find that you do not need to modify your current discipline habits, for example. I am sharing this roadmap so that you may find an alternate path toward your goal when your current route no longer serves you. By integrating the five elements of my All-In Roadmap, every individual in an organization can be a Chief, or be a better Chief. It’s not about title or level anymore. It’s about who we are that drives what we do and how we do it. Helping your team align these elements will unlock their potential and drive growth in and around your organization. MW Rick Miller is a confidant, an author, and a speaker who can help you with choices that will unlock your potential and the potential of every Chief in your organization. Miller has spent more than 30 years as a business leader and go-to Chief, serving as president and/or CEO in Fortune 10, Fortune 30, nonprofit, and startup companies. Today, he works with Chiefs at all levels and speaks regularly about a simple, unconventional, research-based roadmap that enables Chiefs to drive next-level growth. More information is available at www.BeingChief.com Attend an intensive three-day executive leadership course to achieve your full potential as a leader. Find out about this special course, AMA’s Advanced Executive Leadership Program, at www.amanet.org/2104
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The Power of EMPATHY in BY BOB ROSEN AND TONY RUTIGLIANO
A few years ago, the leaders of a pharmaceutical company approached us about, as they put it, rejuvenating their workforce. This company had seen massive changes in its marketplace and in the regulations governing its go-to-market practices. Although it was on the verge of introducing several new drugs, the company had suffered through a few rough years during which repeated layoffs resulted in a 40% drop in the employee population. This once-great organization was mired in self-doubt, despite the hope kindled by the new products that would soon be ready for market. In talking to scores of its employees, we discovered that the company had many of the right leaders in place. These executives were full of passion, savvy, and drive. However, many of the frontline employees were cynical long-termers waiting to take the company up on the next offer of a buyout. Worse still, middle managers showed themselves to be the least engaged and most frustrated slice of the population. They reported being squeezed by executives who, they felt, wanted them to do more with less and by line workers who wanted more answers and assurance than the managers could provide. The president of the organization, who’d had the unenviable job of managing this decline, at first scoffed at our findings. How could managers say they were ill-equipped to deal with change? How could so many employees feel adrift and uncertain when he and his team had been so clear about where the organization was headed? He pointed to all the communication and messaging that he believed should have helped managers and their teams cope with the disruption. This well-intentioned executive had made a common mistake: He equated “messaging” with “communication.” Many people fail to see the difference between talking to and talking with, and they provide facts while ignoring feelings. We’ve come across few executives smarter than this president. His quandary only served to remind us of the validity of a tried-and-true business adage: “People don’t care how much you know until they know how much you care.” In short, the employees of this pharma company wanted their leader to act, think, and feel. In particular, they wanted to know that he felt their pain. What is this thing called “empathy” that many consider the softest of the “soft skills”? Empathy is a deep understanding, on an emotional and cognitive level, of the fears, frustrations, aspirations, and concerns of people. The actions we take as a result of that understanding are evidence of our empathy. These actions communicate that we care. 40
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the Workplace In his Harvard Business Review article, “Leadership in a Combat Zone,” Lieutenant General William Pagonis, who served as director of logistics during the Gulf War, wrote: Owning the facts is a prerequisite to leadership. But there are millions of technocrats out there with lots of facts in their quivers and little leadership potential. In many cases, what they are missing is empathy. No one is a leader who can’t put himself or herself in the other person’s shoes. So much for empathy being a “soft skill.” Why should you care about empathy? How can you develop it? And how can it affect your style of leadership?
WHY YOU SHOULD CARE A new field of study called “neuroleadership” has emerged from the combined fields of neuroscience and leadership development. It may sound like an odd marriage, but as Pagonis’s comment suggests, there is much about the brain’s activities that contributes to a person’s success or failure as a leader. Evidence indicates that leaders who are adept at reading other people’s moods and connecting on an emotional level also can stimulate feelings of shared bonds in those around them. They create a true meeting of the minds. Hard science tells us that our brains are built to seek out connections with others. Consider, for example, the mirror neurons and spindle cells found in most regions of the brain. Discoveries about the functions of mirror neurons and spindle cells are helping to explain the neurological basis of certain emotions that are vital to leadership. Italian researchers first identified mirror neurons when they observed monkeys. They discovered that when one monkey watched another move its arm, the same area in both animals’ brains became active. The researchers initially thought that mirror neurons enable us to experience sensations involved with movement when we watch someone else move. Researchers now believe, however, that these neurons also enable us to share certain emotions. For instance, when you see someone in the dentist’s chair about to get a tooth drilled, you may wince in pain at the sight. This “shared pain” is triggered by your mirror neurons. Even more remarkable, scientists have noted a rich presence of mirror neurons in the brain’s insula, a key structure in generating empathy. The insula is very involved in emotions such as happiness (especially pleasure and reward) and disgust. MWORLD SUMMER 2014
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“Good communication is a conscious choice: Deep listening to others—without interrupting and without preparing a comeback—is a great gift you give to yourself and others.” Mirror neurons also may be involved in feelings of happiness. These neurons become especially active when you laugh or smile and make others react the same way. This may explain why lighthearted, upbeat feelings and laughter often are contagious. As a leader, surely you have noticed that when you are happy and joking around with others, they also lighten up and join in. Furthermore, when we act on feelings of empathy—engaging others because we “know” what they are feeling—we create a neurochemical loop between our emotions and behavior in which they reinforce each other. This reinforcement further enables us to stimulate positive feelings in those around us so that everyone is more eager to work together to create something good. Spindle cells also appear to be instrumental in making us socially adroit leaders. They fire more quickly than other types of neurons and are believed to send signals throughout the brain about our social emotions. A study involving how people react to a performance evaluation shows how this works. One group of people received a negative evaluation, but it was delivered with positive emotions such as smiles and nods. A second group got positive evaluations, but the feedback was conveyed with frowns and stern expressions. In interviews with participants receiving the interviews, those who received the positive signals with the negative evaluation felt better about themselves and presumably performed better afterward. The tenor of the emotions, rather than the substance of the evaluation, made the difference in people’s attitudes toward work. Imagine a real-life company full of positive mirror neurons and spindle cells in action. Why wouldn’t companies seek to unleash such a force? Here’s a case in point: “As a child my nickname was Smiley,” said an executive we’ll call Phil. “Although I’ve always been a socially anxious guy, I learned early on that I smiled out of social discomfort.” Phil grew up in Appalachia, a poor mountain area in the eastern United States. With “average intelligence” and “never having taken a business course,” Phil became one of the most successful CEOs in the pharmaceutical management business. Under his leadership, a company of several thousand employees competed against industry giants and became one of the most predictable performers on the Nasdaq stock exchange for more than 10 years. Over time, Phil became what his smile represented—optimistic, confident, and affable. And it was the power of his smile that made the difference. The smile not only helped him to manage his social anxiety but also was infectious to everyone around him. “My smile communicated optimism and a can-do spirit. I hired people who smiled, and together we created the most friendly, positive, empowered culture that differentiated us from our competition. No matter how negative or tense a situation became, our smiles—inside and out—gave us this special sense of hope and confidence, and everything seemed to work out at the end.” Whether we know it or not, we are all connected by our mirror neurons. As a result, a simple smile can go a long way. 42
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TELL ’EM YOU CARE You could be the most empathetic manager or leader around, but it will do little good unless others know it. You’ve got to show employees that you care. One research organization described an empathetic leader as one who is: ៑ ៑ ៑ ៑
Sensitive to signs of overwork in others Interested in others’ needs, hopes, and dreams Willing to help employees with personal problems Compassionate when someone discloses a personal loss
Additionally, one might well argue that the social skill at the heart of healthy leadership is conscious, clear, and courageous communication. You must express in your words and deeds an understanding of what others are trying to communicate as well. Good communication is a conscious choice: Deep listening to others—without interrupting and without preparing a comeback—is a great gift you give to yourself and others. Good communication is clear: You know exactly what you want to express, and based on the information you receive through careful listening, you must be ready to pursue a variety of tributaries to reach mutual understanding. Good communication is courageous: It is honest, straightforward, and true to how you perceive the world. It is also about being courageous enough to let others own their views of the truth. An individual’s truth might be fundamentally different from your own, and it may be fundamentally flawed. But others have the right to their truths, and it is your responsibility to listen. The goal is for everyone to be heard and respected.
THE POWER OF EMPATHY Here are some questions to ask yourself as you think about becoming a more empathetic leader: ៑
៑ ៑
Do you know what the people on your team are afraid of? Do you know what they are talking about when you’re not in the room? Do people pick up on your moods, and do you pick up on theirs? Do your meetings allow for people to discuss how they feel about things?
The leader who viscerally understands what other people are feeling and experiencing is someone others want to follow. These leaders attract talent, and people are loyal to them. Being empathetic is not always easy. You may need to work hard to understand someone who is fundamentally different from you, confront negative feelings you have about that person, or address your fear that your empathy will send false signals. The secret is to understand what is influencing your reactions. Work hard to put yourself in the other’s shoes and interact with her as a whole person. It’s amazing how good you will feel. MW Bob Rosen and Tony Rutigliano are the CEO and president, respectively, of Healthy Companies, which works with leaders and managers at Global 2000 corporations on building and sustaining productive relationships with their boards, each other, and employees. Learn more at www.healthycompanies.com Develop the skills to ensure you are a highly effective, emotionally intelligent leader at AMA’s course Leading with Emotional Intelligence. Find out more at www.amanet.org/2133 MWORLD SUMMER 2014
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Leaders Are Made, Not Born BY BRIAN TRACY
I’ve been studying leadership for many years. I started when I was a teenager, and the first leader that I studied at length was Hannibal of Carthage. I read book after book about the Punic Wars, the capabilities of Hannibal’s elephants crossing the Alps, and the battles against the Romans. He was able to take a very small force, mold it into a powerful fighting force, take it thousands of miles, and almost defeat the greatest empire of his time. After that, I studied Scipio, the general who defeated Hannibal. I studied the life of Napoleon and Wellington at length as well to understand the differences between the two men. I’ve also studied Washington and Lincoln and Generals George Patton, Dwight Eisenhower, and Omar Bradley, who were some of the great leaders of their time. What I have found is that leaders are made, not born. Nobody comes into the world a natural leader. Even Alexander the Great studied (from the age of eight) to become a leader. The study of great leaders of the past and present is one of the fastest and surest ways to develop leadership qualities. The more you study what constitutes effective leadership, the more likely you will be to internalize the same values and behaviors. These values and behaviors will then be externalized in your actions and in your results. Abraham Lincoln is quoted, “That some achieve great success, is proof that others can achieve it as well.” Bertrand Russell, the great philosopher, agreed, writing, “The very best proof that something can be done is the fact that others have already done it.” Think about the men and women you know of who are leaders that you admire, and then begin to think about how you could emulate their behaviors. Think about how you could be more like them. And lo and behold, over a reasonable period of time, you actually begin to absorb their qualities and become a leader yourself. STUDY THE GREAT LEADERS
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If you want to be a leader or a better leader, remember that it’s all up to you. It’s in your hands or, even more important, in your mind. You are what you think you are. Your self-image determines your performance. You can become a much more effective leader by changing your self-concept—the way you think about yourself as a leader. It all begins with the Law of Cause and Effect. It is the basic law of the universe; all other laws in the fields of mathematics or any of the sciences are subsets of this law, which says that for every effect there is a cause. Nothing just happens. The implication of this law is powerful. It means that the success of every person has a cause or causes. So, if you want to be as successful as someone else, then find out what they did and do the same! Do the same things successful people do, over and over again, and eventually you will get the same results. A related law is the Law of Belief. It states that if you believe in something with conviction, what you believe in will become your reality. Or to put it another way, you are what you believe you are. Philosopher William James said, “Belief creates the actual fact.” Remember, you can become a leader or a better leader by how you think of yourself as a leader. MW SEE YOURSELF AS A LEADER
Brian Tracy is a professional speaker, trainer, seminar leader, and consultant. He is chairman of Brian Tracy International, a training and consulting company based in Solana Beach, CA. Excerpted, with permission of the publisher, from Leadership by Brian Tracy (the Brian Tracy Success Library). Copyright 2014, Brian Tracy. Published by AMACOM. For more information, visit www.amacombooks.org Find out about Tracy’s new AMA course Unlimited Sales Success: Mastering the New Realities of Selling at www.amanet.org/5205 American Management Association
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TALENT STRATEGIES THAT WORK IN ASIA BY TOM HOMER
Succeeding in Asia is not a given; many U.S. companies have boldly stepped into the region and sometimes failed to gain the traction they were looking for. However, these failures haven’t dissuaded competitive organizations, and as Asia’s economies continue to grow, the region remains an important target for U.S. companies. Telstra Global, headquartered in Hong Kong, has more than 30 years of experience in the Asian market, with numerous customer success stories and a deep understanding of local rules, regulations, and culture. We consider Asia to be a key market for expansion, both for Telstra Global and our customers. In order to better understand how U.S. businesses can set themselves up for success in the region, Telstra Global recently surveyed more than 4,100 senior executives based in Asia with headquarters in 20 countries worldwide. Our research, called “Connecting Countries,” was conducted to quantify the business sentiment of multinationals operating in Asia and to ascertain the attributes and success factors of companies that are excelling in the region. Interestingly, we found that U.S. businesses are not only performing well within Asia but in fact outranking their international peers within high-growth regions. For instance, U.S. companies are overrepresented among the star performers in the research, coined “Asia Business Champions” or the top 5% of companies operating in the region based on past high performance and future promise of success. Additionally, through our research we’ve uncovered a number of consistent operational and leadership behaviors that are shared by Asia Business Champions and that all companies can learn from. MWORLD SUMMER 2014
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These nine lessons explain what these pathfinders doing business in Asia think, what they’re seeing, and what they’ve learned along the way.
SPOTLIGHT ON ASIA TODAY Research suggests that 40% of global economic activity is now occurring in Asia, and world growth is expected to continue to be led by Asia over the next decade. Half the world’s population lives in the many diverse nations that comprise Asia, and every day the number of people living in Asian cities grows by more than 120,000. With figures like these, very soon Asia may not just be the biggest global producer of goods and services; it may also be the biggest global consumer. Asia’s reemergence as the world’s most dynamic economic region has focused many minds on the opportunities and challenges of what we see as the Asian century. With the world’s economic growth expected to continue in Asia over the next decade, our report shows that U.S. companies are at the forefront of financial performance within the region. An impressive 68% of U.S.-headquartered businesses operating in Asia have met their financial and strategic objectives over the last three years. U.S. companies are overrepresented among the star performers in the research: 32% of Asia Business Champions are companies headquartered in the United States.
HOW TO SUCCEED IN ASIA: LESSONS FROM ASIA BUSINESS CHAMPIONS Expanding businesses into Asia does not come easily. Working across cultures presents some challenges that should be properly understood in order to be appropriately addressed. From looking at the success stories from the Asia Business Champions, we were able to identify nine lessons that every business should consider when it comes to operating in Asia. Instill an honest operating culture and style that identifies challenges. An honest
operation will allow the business to seamlessly solve challenges. Companies should be able to recognize and admit when they are facing cross-culture operational challenges. In particular, companies should go into building a business in Asia understanding that it will be challenging to find good local talent and set realistic expectations of financial returns. Understand that managing across countries requires special skills. Interpreting local
needs to the head office and the head office’s needs back to the local market must occur to be successful. As businesses expand into Asia and surrounding regions, collaboration between offices and finding the right person to manage the collaboration are crucial. In our in-depth interviews with executives, one seasoned Asian executive described her role as a metaphorical (and at times literal) “interpreter” with a responsibility to interpret the needs of the local office to headquarters and vice versa. To do the job well, you need to understand both contexts very well and you need to gain the trust of the people you work with, across both the local and central offices. Make sure leaders walk the talk. They should minimize the gap between the behaviors
they know are important to manage across Asia and the actions they take to live up to those behaviors. To assess the extent to which companies match intention to action, we created the Asia Business Accountability Score (ABAS), which looked at the extent to which an activity is believed to be important and the extent to which companies are doing a good job of following through. 46
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Concurrently move forward multiple growth strategies. The ability to execute growth strategies, rather than rely on just one strategy, can hedge risk and maximize opportunities. When companies were asked to consider the importance of both consolidation in existing markets or expansion into new countries in the next three years, the Asia Business Champions responded differently from other businesses in the region.
Interestingly, they were twice as likely as other companies to rate expansion as extremely important (45% cf. 22%) and almost twice as likely to suggest that consolidation is important (56% cf. 31%). Don’t be constrained by geography. Not only are Asia Business Champions hungry
for expansion within Asia, but they are also more likely to look for that expansion in places other companies are not looking. This implies a global vision and strategy, balancing Asia against strategic business growth in other regions. Asia Business Champions are more likely than other companies to be considering multiple markets for expansion, suggesting a multifaceted approach. Know that leadership matters. Asia Business Champions have strong and more
effective leadership teams in place, both in their global headquarters and in their local offices, when compared with other businesses. Getting the right balance of local and headquarter leadership strength and autonomy is a key trait of successful companies. Nine out of 10 Asia Business Champions rate their local and global teams as effective or very effective. Combine resilience, curiosity, and creativity. When we looked at the data, one of the
clear points that stood out is that these three traits show up among the most successful companies. In today’s fast-moving, changing business landscape, leaders need to be resilient enough to tackle any unexpected changes in the market or meet fluctuations in business demands, especially when operating in a new region. Curiosity pushes leaders to be constantly hungry and to learn more, while creativity ensures that you bring fresh thinking to the business and a willingness to embrace new ways of doing things through problem solving. Recognize that personality traits are more important than prior experience and knowledge. We asked senior leaders to rate the importance of a set of key traits that
might be required to manage across multiple countries in Asia. When you look at the responses given by the leaders from Asia Business Champions compared with those of leaders in other companies, you see that they ascribe more importance to personality traits like flexibility, adaptability, and integrity than to language skills or experience in other markets. Make positions in other countries rewarding. Creating a position that is fulfilling will
create a sense of increased loyalty from your employees and, in turn, decrease turnover rates. Making the experience in another country rewarding will cause employees to want to continue working in other countries and stay with their current employer. Our research also showed that the companies that are really succeeding in Asia manage to retain their staff longer. Of Asia Business Champion employees, 50% expect to stay with their current employer over the next five years, while only 35% of employees with less successful companies will still be there in five years’ time. MW Tom Homer is head of the Americas and EMEA at Telstra Global. Telstra Global, headquartered in Hong Kong, is part of Telstra Corporation Limited, a leading telecommunications and information services company in Australia.
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Ask, Listen, and Learn We know that no leader succeeds without the support and dedication of his or her employees. Any executive who neglects or undervalues the ways employees contribute to the daily transformation of the organization’s mission statement into real value places the entire enterprise at risk. That’s why we’ve devoted much of this issue of MWorld to exploring how to facilitate the dialogue between people at every level of an organization. Because as Frank L. Hanagarne Jr. reminds us in his MWorld commentary, “The prospect for success actually rests with the people on the front lines who make things happen day by day.” Here’s a question: Have you listened to an employee today? When it comes to engaging and motivating workers, it turns out listening is as essential as praising. In fact, listening to what your employees have to say may be the ultimate form of praise. Henry David Thoreau put it this way: “The greatest compliment that was ever paid me was when one asked what I thought and attended to my answer.” John Baldoni echoes Thoreau’s idea in his MWorld article, “Inspire Purposeful People.” He quotes preeminent executive coach Marshall Goldsmith: “The way leaders can demonstrate that they put people first is, rather than telling people what to do and how to do it, instead asking for their input, listening to their ideas, and learning from them.” Not surprisingly, good intentions aren’t enough. Many managers and leaders, while strong in strategic and financial acumen, lack the basic skills to create a workplace where workers are invested in achieving organizational goals. As Bob Rosen and Tony Rutigliano write in their MWorld article, “The Power of Empathy in the Workplace,” too often even well-intentioned executives confuse “messaging” with actual “communication.” That’s where AMA comes in. Our “How to Communicate with Diplomacy, Tact and Credibility” seminar has long occupied a place at the top of our “most popular” list. We’ve seen that as workers long for improved interaction with their leaders, managers at all levels are seeking the skills they need to enhance the rapport, collaboration, and two-way trust that are among the traits of a highperforming organization. Philosopher Johann Wolfgang von Goethe wrote, “Instruction does much, but encouragement everything.” For more than 90 years, AMA has tended to the instruction part of Goethe’s wise advice by delivering top training solutions to our customers. The encouragement part is up to you.
Robert G. Smith Senior Vice President Marketing & Membership American Management Association
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Talent Transformation is the real key to your organization’s future success. And AMA Enterprise excels at it.
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he secret to achieving breakthrough results is your talent— the most valuable asset you have. When teams of people perform at the top of their potential every day, amazing things can be accomplished. AMA Enterprise partners with organizations to unlock the hidden potential and unleash the full power of your talent. We’re a specialized division of AMA that designs corporate and government solutions to help transform your enterprise-wide talent to fuel innovation and high performance, and achieve optimal business results. Our team of expert consultants, program developers and facilitators—in collaboration with your team—creates targeted learning solutions geared to achieving your goals. Find out what AMA Enterprise can do to help your organization reach even greater levels of success. To speak with one of our experts or to get access to our latest thought leadership research, please call 877.880.0264 or email us at info@amaenterprise.org
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