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Do Institutionalized Management Practices Create Formidable Obstacles to Change?

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Every organization must adapt to change whether they like it or not. Customers, competition and technology compel organizations to adjust. The success and speed of change is dependent upon several key factors that are closely associated with leadership.

However, institutionalized management practices and structures can create formidable obstacles to internal change and can prevent organizations from taking advantage of short windows of opportunity. These obstacles present a challenge to all managers.

In most organizations individuals are taught to manage not by leading but by controlling and directing. Within these organizational cultures, this style of management is often equated with leadership. This key fallacy often prevents organizations from effecting change and taking advantage of afforded opportunities.

Management is a precise set of processes that keeps a complicated system of people, resources and technology running smoothly and, hopefully, without problems. These processes include functions such as planning, budgeting, organizing and controlling. Yet management as leadership goes well beyond these activities to include the set of processes that initially creates an organization and allows it to adapt to a variety of changing circumstances.

It is important for managers to understand the difference between the two processes. Leadership is what defines the future for the organization, aligns people with a vision and motivates them to carry on despite the obstacles. Transforming an organization in the face of change requires a majority of leadership skills and a minority of controlling and directing skills. While management in the traditional sense was required to build and staff the large corporate organizations of the past, leadership is what is required to transform them in the face of change for the future.

The key factors of change within any organization are all leadership-based. In the past, management was essential to internally build and maintain large organizations and bureaucracies. While such management is still important, organizations faced with rapidly changing technologies, markets and competition must focus their efforts externally to effectively handle change and take advantage of the subsequent opportunities. This external focus is part of leadership.

The reasons behind this strategy are self-evident. Internally-focused managers and employees tend to be myopic in their thinking, which makes it difficult for them to identify the external forces presenting both threats and opportunities to the organization. Insular thinking is designed to protect internal bureaucracies and political power bases; thus, it denies the existence of the forces of change that are buffeting the organization.

Since they disregard the forces of change, these managers are highly resistant to alterations and build walls within the organization. These barriers are difficult for managers as leaders to overcome. Before they can emerge to challenge these internal barriers, they must understand how the key factors of leadership compare with the traditional management structure, and how the two vary in style and approach to change. While controlling and directing management can support leadership in the accomplishment of goals and objectives, most organizational cultures have traditional managers dictating what managers as leaders should and can do; this is the opposite of what should be happening. The following comparisons are where many of the directing/leading conflicts occur with traditional management imposing its principles and constraints upon leadership.

Planning and Budgeting vs. Establishing Direction

The role of management in the traditional sense is to establish detailed steps and schedules that direct the organization toward the accomplishment of its goals and objectives. Individuals and organizational resources are allotted according to need and assigned to specific tasks.

The role of management as leadership is to develop and define an organizational vision for the future. Managers initiate strategies to produce the necessary changes required to achieve their vision.

The conflict in traditional manager-run organizations is that they wish to have managers who lead work within the constraints of the established plans and budgets, which limits their ability to act and effect overall change. Rather, planning and budgeting should be used to support the manager’s goals and vision to implement necessary organizational change. This presents a challenge for managers as leaders: they must effect internal change before they can achieve external change.

Organizing and Staffing vs. Aligning People

The conflict between organizing and staffing on the one hand, and aligning people on the other, is an argument of form over function. Many entrenched managers have institutionalized a number of management functions, which creates highly structured programs that help the organization to achieve its institutionalized goals and objectives. Employees and resources of the organization are controlled and directed through these goals related to policies, procedures, methods and systems.

While managers as leaders understand the validity of a management structure and a need for it to support a leader’s vision, goals and objectives, they are primarily guided by the principles of aligning people to their vision. Managers who lead accomplish their goals by communicating direction, via words and deeds, to everyone whose cooperation is needed for the creation of teams and coalitions that understand the vision and accept its validity.

Once teams and coalitions are internally established, managers understand the need for the functions of organizing and staffing that support these efforts, but are not constrained by them.

Controlling and Problem Solving vs. Motivating and Inspiring

The use of control methods and techniques is management’s way to monitor results and identify deviations from the plan. Problem solving techniques are instituted to use the organizational resources that resolve the problem.

The manager who leads will use these methods and techniques only after motivating and inspiring people to overcome the major internal and external barriers to change. A key difference is that controllers and directors use methods to implement solutions while leaders motivate people to change.

Predictability and Order vs. Change and Opportunity

The fundamental difference between controlling and leading management is in the final results.

Controlling management focuses on the short-term results that are expected by various stakeholders in the organization, such as meeting budgets and quotas and producing an adequate return on investment. Their focus is on predictability and order, which inhibits organizational adaptation and transformation to meet the forces of change.

Management as leadership aims to drive the organization through change vis-à-vis their vision. While this focus may alter the organization’s short-term goals, it has the potential to produce extremely useful change by taking advantage of emerging opportunities and transforming the organization in a positive manner. The results of this endeavor can produce new products, services, approaches and methods that positively impact the organization in the long-term.

Excerpt: Facilitating Change: Pinpoint Leadership Skill Development Training Series (Majorium Business Press, Stevens Point, WI 2011) $ 17.95 USD

Related:

How Well Do You Set the Tone?

What Does Luck Have to Do With It?

Anticipating and Handling Employee Fears of Change

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2014 Timothy F. Bednarz, All Rights Reserved

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Eleven Factors That Affect the Team Environment

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Systematic observation and thorough analysis of the team process as it relates to individual members is essential for understanding how teams must shape their dynamics in order to improve overall performance. The team observation and analysis process focuses managers on the various ways individual members interact with one another within the team environment.

Teams respond to issues differently. Responses can result in disruptive conduct such as personal dominance, obstinacy, controlling, outright fighting and a host of other negative behaviors.

Task and maintenance roles allow individual teams to deal with issues and influences in a more structured and productive manner. However, managers must observe how their individual teams interact before and after structures are put into place in order to determine the increase in their performance output and productivity.

The team observation and analyzing process includes the following factors and components:

Membership

Leaders need to understand that individuals who comprise the makeup of an individual team have differences in personalities and backgrounds and that these—along with gender and age differences—all affect the group dynamics within the team structure. Differences in functional backgrounds and commitment to collective goals also contribute to a level of cohesion or overall conflict within the team environment.

Organizational Context

Successful teams need organizational direction, information and resources. Problems can occur when organizational missions are unclear, tasks poorly defined, and teams not given sufficient autonomy. Problems also result when rewards are given to individual members and not collectively to recognize overall team results.

Influencers, Communication and Participation

It is important for leaders to identify the influencers and established subgroups and coalitions within individual team environments. There is a natural tendency for individuals within the team to form alliances to the exclusion of other members, and most team environments will experience their influence and control. Influencers and alliances impact team communication patterns as certain individual input is sought and heard over and above other sources of dialogue, ideas, comments and suggestions.

As within any healthy team environment there is a balance of all opinions and feedback, leaders must be aware of who has the most impact on the team’s actions and decisions and take action to ensure those who have been ignored are heard.

Climate and Personal Behaviors

Leaders must observe individual team members for signs of anger, irritation, frustration, boredom, defensiveness and withdrawal. As within a healthy team environment, individual team members should be free to probe others with regard to their thoughts and feelings – such emotions are indicative of problems that must be addressed.

When reviewing the climate, it is essential for leaders to also determine whether conflict is suppressed or encouraged: solutions cannot be reached unless there is healthy debate and open conflict that allows individual teams to reach their optimal performance levels.

Minority Opinions

In most team environments there will be individual members who hold opinions and viewpoints that run counter to those of the majority. In a healthy team environment, these opinions are valued and sought out rather than suppressed and discouraged.

Leadership

Leaders should monitor the power structure within their teams to determine whether leadership responsibilities are assumed by one person or shared by the entire membership. They should be watchful for power struggles and conflicts resulting from a lack of leadership within the team environment.

Task and Maintenance Functions

Healthy teams have task flow and maintenance roles that are fulfilled by all members. Leaders should determine whether specific roles and responsibilities are being fulfilled competently and accurately, and whether the individuals assigned to these roles and tasks take their responsibilities seriously.

Decision Making

Leaders should be well acquainted with the decision making processes used within their individual teams. Key decisions are generally made during the first meeting, which often then tend to shape and determine progress. These key initial decisions are often hard to reverse. Leaders should also guard against groupthink, where pressure is put on all team members to agree and conform to the actions of the entire team and little or no dissention is allowed.

Conflict

Leaders should encourage useful, healthy and appropriate conflict over substantive issues, while taking time to improve personal relations among individual team members when negative emotional eruptions become apparent. Conflict is healthy only when personalities and personal issues are removed from the issue.

Emotional Issues

All individual team members come to the team setting with personal needs and issues that get played out within the environment, including:

  • Personal identity within the team
  • Goals and needs
  • Power and control
  • Intimacy

Atmosphere

Leaders should monitor the atmosphere created by their individual teams. Within some teams, members may prefer a business-only approach, while in others a more social atmosphere might be prevalent. The atmosphere is also shaped by whether a single individual controls the team or leadership is shared collectively.

Excerpt: Building Team Roles & Direction: Pinpoint Leadership Skill Development Training Series (Majorium Business Press, Stevens Point, WI, 2011) $ 17.95 USD

Related:

How Personal Agendas Can Destroy a Team

The Use of Teams Requires Self-Discipline

When Performance Lags, Look to the Team Culture

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2014 Timothy F. Bednarz, All Rights Reserved

Handling Workplace Complaints, Concerns and Issues

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blogNegativeEmployees

Leaders in the workplace hear several complaints every day. Some are minor and easily resolved; others are more complex, requiring complicated solutions. Leaders should have a specific procedure or decision tree set up to guide them through the resolution process fairly and consistently.

Decision trees come in different varieties, some more suited to particular issues than others. One type can be quite logical, providing the leader with a rather intuitive model to follow for simple problems. Difficult problems, on the other hand, require more complex models that give leaders the more intricate guidance they require.

Unresolved complaints are symptomatic of underlying issues in the workplace. When left unsettled, these issues fester and ultimately surface as major problems that can impact productivity, efficiency and performance, as well as expose an organization to legal liabilities. Leaders must always strive to resolve a problem; otherwise, employees who continually complain about the same issue yet don’t see action being taken likely have legal recourse. Even a seemingly minor issue can have potential legal ramifications that make the company liable for failing to address the complaint.

Effective leaders understand the importance of immediately addressing and resolving complaints. They know that lingering issues hinder the performance of their organizational unit by disrupting the harmony and balance required to maximize output. Additionally, the time invested in “nipping a problem in the bud” is well spent when compared with the time required to deal with a complaint that has exploded into a major problem. Good leaders furthermore understand that a quick and effective response to a complaint limits the company’s legal liability.

Undoubtedly, leaders are well-versed in dealing with daily operational problems (e.g. production, quality, scheduling and efficiency) associated with the organizational unit’s performance. And while it is possible these methods are effective at resolving related employee complaints, they are not the focus of this lesson. For present purposes, complaints will be limited to general workplace issues such as intimidation, harassment, bullying and other employee-related concerns.

When a complaint is initially brought to the leader’s attention, he or she will most likely immediately classify it as a problem that is either major or minor. This tendency is natural, as quick classification leaves the leader with the necessary time and energy to identify and resolve the problem.

However, leaders must take care not to minimize a complaint. They need to recognize that it takes courage for an employee to voice a concern. In fact, before the complaint is made, quite often the issue has been going on for a sustained period, with the employee making many failed attempts at resolving it. Hence, it is important that the leader carefully consider the complaint’s seriousness. Even if the individual tends to complain or whine about everything, each grievance should be examined on its own merits. If, after thoughtful consideration, the leader finds there isn’t much to the complaint, then it may be dismissed. But a repeat pattern of similar complaints may require further action on the part of the leader. On the other hand, some employees rarely complain, and when they do the problem may be more serious than it initially appears.

Once the legitimacy of a complaint has been established, several steps must be taken. A decision tree, as outlined below, guides the leader to the ultimate solution.

Preliminary Investigation

A preliminary investigation identifies underlying causes, the individuals involved and impacted, and the extent of the problem. When the problems causing the complaint are rooted out early, potential solutions can also be identified right away. If this is the case, leaders can act quickly to resolve the problem and move on to more pressing issues. If not, leaders must move on to the next step.

Documentation

If the problem is bigger or more advanced than originally thought, then leaders must begin to document its extent—that is, the activities of the individuals causing the problem, and the complaints and actions of the employees affected by the problem.

Effective leaders understand the importance of documenting the problem: the process helps develop objective facts necessary for a satisfactory resolution and protects the company if the termination of employees is required.

Interview All Participants

An initial investigation of a complaint and a documentation of the facts should include personal interviews with everyone involved in the issue. This gives all parties ample opportunity to express their viewpoints. Leaders must take care to stick with the facts and not be biased by previous experiences with anybody or let their personal feelings impact their decisions.

Pinpoint the Causes and Solution

After interviewing all participants and listening carefully to what they had to say, leaders should be able to pinpoint the underlying causes of the problem. Sometimes the issue to be dealt with is obvious; in which case, immediate action is advised.

In more serious cases, leaders may need to consult with their superiors or the human resources professionals in their company to determine further action or attain recommendations. When issues of legal liability are involved in the solution, leaders must seek counsel from others more familiar with the issues. Effective leaders understand the limits of their responsibilities and the importance of calling on others with more expertise. When in doubt, it is best to call human resources to get their view on possible courses of action.

Implement the Solution

Depending upon the seriousness of the problem and who is involved in crafting and implementing the solution, leaders must take action as soon as possible. Clearly, the solution can take many forms and have a variety of actions. As a result, leaders will often have to sit down with the people affected, either individually or together as a group.

In these sessions the problem will be plainly laid out, the findings and extent of the problem will be reported, and a discussion of the possible solutions initiated. In certain cases where the problem is very serious, solutions can be presented without options, leaving the people who are causing the problem with clear instructions to cease their behaviors or face specific consequences. In other cases, the parties will discuss and agree upon a solution.

Once again, leaders aren’t doing this alone: they are guided by the seriousness of the problem, instructions from their superiors, and the legal liabilities and ramifications if the issue is not resolved. Each area offers unique guidance that, along with understanding the particular circumstances surrounding the problem, will help leaders identify the final resolution and the actions they need to take.

Monitor the Solution

After a solution has been implemented, leaders should actively monitor the solution and periodically interview the employees affected to assure their satisfaction with the outcome. The leader’s central purpose here is to ensure that the problem is completely resolved. If unresolved, then further action must be taken. Consequences may need to be revisited and more drastic action may be called for.

Leaders must understand that every complaint and problem is unique. Dealing with workplace issues means working with complex human behaviors that often have no simple or straightforward solutions. While some solutions are mandated by company policies or management direction, others require the leader’s persistent application of logic until the problem is completely solved.

Excerpt: Negative Employee Attitudes: Pinpoint Management Skill Development Training Series (Majorium Business Press, Stevens Point, WI 2011) $ 18.95 USD

Related:

Five Critical Steps to Maximize Performance

Execution: Six Action Steps

Performance Plans Create Results and Maximizes Performance

Objectives Allow Managers to Focus on Obtaining Results

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2014 Timothy F. Bednarz, All Rights Reserved

Five Reasons Why Team Communications Can Deteriorate

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Since leaders are dealing with individual personalities in the team environment, it is unrealistic to expect that communication will never break down. Even within the most effective and efficient team environment, issues and situations will arise that will cause an entire breakdown of team communication.

The breakdown of communication in the team environment often occurs when trust and respect are diminished or ignored by individual team members. Breakdowns also occur when chronic conflict has not been resolved within the team.

Another source of communication breakdown is when team members feel their personal interests are stronger than the needs and identity of the team. These individuals are motivated by their personal desires and will do anything to achieve them, including disrupting the team environment.

It is important for leaders to recognize that communication breakdowns will occur within the team environment. In the early stages of team growth, communication problems and breakdowns are more frequent, as individuals struggle to obtain position and retain power in a new and changing environment. However, in more mature and structured teams, leaders will find that the team itself will deal with the communication problem according to its defined boundaries, rules and standards.

Leaders should be aware that a breakdown in communication can have long-term ramifications on the structure and effectiveness of the team. Therefore, it is important for them to recognize potential problems and the symptoms in order to anticipate issues, such as those discussed below, before they occur.

Loss of Trust and Respect

If leaders allow problems to fester and lead to a breakdown of team communication, they will experience a corresponding breakdown of trust and respect among team members that can be difficult, if not impossible, to restore. These circumstances can be fatal to the team and might require the formation of a new team in order to overcome them. Broken trust requires prolonged periods of time to be reestablished. Leaders need to be aware of this and take appropriate action to reduce the occurrence of chronic problems that can result in the loss of trust and respect among team members.

Hindered Free-Flow of Ideas

Once communication has broken down among team members, leaders will observe that discussions become more emotional and subjective rather than objective and factual. When discussions are based on emotion rather than fact, brainstorming will diminish to the point that there is no free-flow of ideas among team members. This effectively halts the team process until the issues causing the breakdowns are dealt with.

Intimidation

Leaders who experience a breakdown of communication observe that certain members will attempt to take control of the team process, subjugating the team to their personal agendas and perspectives. Once done, these individuals will use emotional responses to intimidate other team members into accepting their points of view. This is where the bonds of trust and respect among team members can be broken. The communication breakdown destroys the team structure and subjects it to the will of one or more members.

Bias

Once the breakdown of communication has led to the destruction of the team order by one or more team members, a specific bias is created that supports the personal agendas of these individuals. When members allow the team process to be subverted by particular individuals, they undermine the entire team effort.

Faulty Decision Making

The breakdown of communication in the team environment inevitably leads to faulty decision making. Specific biases that hinder the free-flow of ideas prevent teams from considering all options and alternatives when making decisions. Consequently, decisions are impacted by the biases of the specific individuals controlling the team. In these circumstances, decision making and outcomes will be flawed.

Individuals who have hijacked the team process will use the team environment as a cover to mask their activities when decisions produce faulty results. As they do not want to be held accountable for their behaviors and actions, they will place blame for the decision on the team environment.

Excerpt: Boosting Team Communication: Leadership Skill Development Training Series (Majorium Business Press, Stevens Point, WI 2011) $ 17.95 USD

Related:
 
How Personal Agendas Can Destroy a TeamThe Use of Teams Requires Self-Discipline

When Performance Lags, Look to the Team Culture

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2014 Timothy F. Bednarz, All Rights Reserved

Mistakes as a Source of Innovation

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Amazon CEO Jeff Bezos  Photo by David McNew/Getty Images

Amazon CEO Jeff Bezos
Photo by David McNew/Getty Images

Effective leaders adhered to an unalterable expectation that mistakes and failure need to be an acceptable part of the process of innovation. They opposed “zero tolerance for mistakes” policies, many of which are still being practiced in many companies today. They considered these to be hindrances to innovation.

“It’s easy to believe that Jeff Bezos is one of the great innovators. But that’s not exactly the case. His rise into Fortune 500-dom actually has little to do with innovation and more to do with iteration. If anything, Amazon demonstrates how a cutting-edge Internet company – of all things – can succeed slowly. The trick is taking a million tiny steps – and quickly learning from your missteps.” [1]

The mega-inventors of the 19th Century are also prime examples of this philosophy. “[George] Westinghouse (Westinghouse) built on his engineering skills, learning how to design and evaluate industrial trials. Time after time he turned trial failures into commercial successes. Even his competitors hailed his problem solving skills…” [2] “[Thomas] Edison (Edison Electric) viewed even disasters as an opportunity for learning. On one occasion his lab stove went out in the dead of winter, causing an assortment of expensive chemicals to freeze. On another occasion unprotected chemicals were damaged by sunlight. Instead of bemoaning the losses, Edison put aside all other projects to catalogue changes in the properties of the bottled substances… ‘He knew how to turn lemons into lemonade.’[3]

Walt Disney (Disney) took a proactive approach toward mistakes. “Walt found a way to push improvement without laying blame. [He] take(s) a look at what [someone says]… not glossing over a problem with the gag. He implicitly acknowledges it could be better. But rather than indulge an employee’s criticism of another worker, he demands a positive, forward-thinking attitude – ‘what we can do to make it better…’ Walt kept employees engaged and contributing by not shooting down suggestions, but instead steering employees toward improving their ideas… Walt’s approach to suggestions as the difference between responding ‘Yes, if…’ or ‘No, because…’ [4]

As Sam Walton grew Wal-Mart into a retailing giant, he realized that “not all of his ideas worked. The minnow buckets didn’t sell. People in Wisconsin didn’t go for his Moon Pies. But when he saw he was wrong, he admitted his mistake and went on to try something else. And he wanted his associates to be the same way. He’d get them together on Saturday mornings to share their success and admit their failures. That culture of candor produced a great environment to capture ideas. It helped that he had ‘very little capacity for embarrassment.’[5]


[1]  Quittner Josh, The Charming Life of Amazon’s Jeff Bezos (Fortune Magazine, April 15, 2008)

[2]  Quentin R. Skrabec, Jr., George Westinghouse: Gentle Genius (Algora Publishing, New York, 2007) p. 61

[3]  McAuliffe Kathleen, The Undiscovered World of Thomas Edison (Atlantic Magazine, December 1995)

[4]  Niles Robert, Disney Legends Recall Walt Disney and the ‘Yes, It…. Way of Management (Theme Park Insider, November 19, 2009)

[5]  Walton Sam Made in America. A Money Book Summary (character-education.info)

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2012)

Read a Free Chapter

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

The Productive Response to Failure

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Fred Smith - Founder and CEO of FEDEX

Fred Smith – Founder and CEO of FEDEX

The great and influential leaders were no strangers to failure. My research illustrates that most experienced levels of failure and adversity that would compel typical individuals to pack their bags and quit in frustration and disappointment. The levels of success they achieved did not come easily, but from persistence. Their personal levels of perseverance and self-reliance are what realistically defined them. Most viewed failure as a learning experience, rather than a defining event. Fred Smith (FedEx) observed, “Just because an idea isn’t implemented or doesn’t work out doesn’t mean that a person has failed.” [1]

Early in his career at Johnson & Johnson, General Robert Wood Johnson taught James Burke a valuable lesson about failure. “Shortly after he arrived at J&J in 1953 as a product director after three years at Procter & Gamble, Burke attempted to market several over-the-counter medicines for children. They all failed-and he was called in for a meeting with the chairman.

‘I assumed I was going to be fired,’ Burke recalls. ‘But instead, Johnson told me, ‘Business is all about making decisions, and you don’t make decisions without making mistakes. Don’t make that mistake again, but please be sure you make others.’”[2]

In 2001, John Chambers (Cisco) saw his company’s revenues and stock price fall off the cliff during the tech and telecom busts. He was challenged with the reality of massive and likely fatal failure. “Within days of realizing Cisco was crashing, Chambers leapt into trying to fix it. ‘He never dwelled on it,’ says Sam Palmisano, CEO of IBM (IBM) … ‘John kept the company focused. He said this is where we are, and he drove the company forward.’

He reached out to [Jack] Welch (General Electric) and a handful of other CEOs. They told him that sudden downturns always take companies by surprise, ‘so I should quit beating myself up for being surprised,’ Chambers recalls. He did. Chambers decided that the free fall had been beyond his control. He now wraps it up in an analogy he retells time and again, likening the crash to a disastrous flood: It rarely happens, but when it does, there’s nothing you can do to stop it… Those other CEOs also told Chambers to figure out how bad it was going to get, take all the harsh action necessary to get through it and plan for the eventual upturn.” [3]

David Packard (Hewlett-Packard) faced failure and adversity in a gruff and straightforward manner. “When he returned to HP in the early 1970s after his stint as deputy secretary of defense and found the company on the verge of borrowing $100 million to cover a cash-flow shortage, he immediately met with employees and gave them what came to be known as a ‘Dave Gives ‘Em Hell’ speech. Packard lined up the division managers in front of employees and told them, ‘If they don’t get inventories under control, they’re not going to be your managers for very long.’ Within six months, the company once again had positive cash flow, to the tune of $40 million.” [4]

John D. Rockefeller (Standard Oil) advised, “‘Look ahead… Be sure that you are not deceiving yourself at any time about actual conditions.’ He notes that when a business begins to fail, most men hate ‘to study the books and face the truth.” [5]

[1] Federal Express’s Fred Smith (Inc. Magazine, October 1, 1986)
[2] Alumni Achievement Awards: James E. Burke (Harvard Business School, 2003)
[3] Maney Kevin, Chambers, Cisco Born Again (USA Today, January 21, 2004)
[4] O’Hanlon Charlene, David Packard: High-Tech Visionary (CRN, November 8, 2000)
[5] Baida Peter, Rockefeller Remembers (American Heritage Magazine, September/October 1988, Volume 39, Issue 6)

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011)

Read a Free Chapter

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

Have You Ever Been Overwhelmed By Your Personal Circumstances?

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Kelleher--William-Thomas-Cain-Getty-Images

Have you ever been overwhelmed by your personal circumstances? The current recession has caused many to despair over the problems that seem to overwhelm them… lost jobs, downsizing, pay cuts, you name it. Many just want to give up and quit!

What can the experience of the great leaders teach us? Despite nearly hopeless circumstances, the great and influential leaders’ steadfastness, perseverance and personal drive would never allow them to consider quitting.

Herb Kelleher (Southwest Airlines) faced overwhelming challenges when he initially launched his airline. He was immediately sued by his competition to prevent Southwest Airlines from making its first flight. He described his experience, “For the next four years the only business Southwest Airlines performed was litigation, as we tried to get our certificate to fly. After the first two years of defending lawsuits, we ran out of money. The Board of Directors wanted to shut down the company because we had no cash. So I said, ‘Well guys, suppose I just handle the legal work for free and pay all of the costs out of my own pocket, would you be willing to continue under those circumstances?’ Since they had nothing to lose, they said yes. We pressed on, finally getting authorization to fly…

Our first flight was to take off on June 18, 1971 and fly between Dallas, Houston and San Antonio. I was excited about being in the airline industry because it’s a very sporty business. But the regulatory and legal hoops enraged me. I thought if we can’t start a low cost airline and the system defeats us, then there is something wrong with the system. It was an idealistic quest as much as anything else. When we brought the first airplane in for evacuation testing (a simulated emergency situation) I was so excited about seeing it that I walked up behind it and put my head in the engine. The American Airlines mechanic grabbed me and said if someone had hit the thrust reverser I would have been toast. At that point I didn’t even care. I went around and kissed the nose of the plane and started crying I was so happy to see it.” [1]

Conrad Hilton (Hilton Hotels) went bankrupt during the Depression. “Faced with challenges that might have seemed insurmountable, he did what he had done since he was a boy—resolved to work hard and have faith in God. Others, it seemed, made up their minds to put their faith in Hilton. He was able to buy goods on credit from locally owned stores because they trusted his ability and determination to one day pay them back. As the kindness of others and his own ingenuity helped him rebuild his hotel empire to proportions previously unheard of, he solidified his commitment to charity and hospitality—two characteristics that became hallmarks both of Hilton Hotels and of the man who began them.” [2]

Walter and Olive Ann Beech (Beech Aircraft) started their company during the Depression. “‘She was the one that kept trying to get the money together to pay the bills,’ said Frank Hedrick, her nephew, who worked with her at Beech for more than 40 years and who succeeded her in 1968 as president of Beech Aircraft…

She said she didn’t give much thought to the problems of starting a new company at a time when most airplane companies were closing, not opening. ‘Mr. Beech thought about that,’ she said. ‘(But) he had this dream and was going to do it. He probably didn’t know how long the Depression was going to last.’ The first few years were difficult, she said. They sold few airplanes. ‘We had to crawl back up that ladder.’” [3]

Olive Ann Beech overcame additional adversity, when she took over the company, after her husband contracted encephalitis during the Second World War and again, after he suddenly died in 1950.

Joyce Hall (Hallmark) saw his company literally go up in smoke, three years after he started it, when his business burned to the ground. “Hall was $17,000 in debt when a flash fire wiped out his printing plant. Luckily, he was able to sweet-talk a local bank into an unsecured $25,000 loan, and he has not taken a step back since. By the late 1930, Hallmark was one of the top three cards.” [4]

Herb Kelleher (Southwest Airlines) “never considered giving up, despite having a wife and four children at home. Did stress keep him awake nights? No, Kelleher says he was already awake nights, working at his office. ‘I figured if I was working when they were sleeping, it gave me an edge.’ And when he was home, ‘the iron curtain came down,’ walling off the business worries.” [5]

Milton Hershey (Hershey Foods) failed miserably in his first endeavor, a confectionary store in Philadelphia. “In 1886, he was penniless. He went back to Lancaster but did not even have the money to have his possessions shipped after him. When he walked out to his uncle’s farm, he found himself shunned as an irresponsible drifter by most of his relatives.

This time, though, fortune finally smiled on Mr. Hershey. William Henry Lebkicher, who had worked for Hershey in Philadelphia, stored his things and helped him pay the shipping charges. Aunt Mattie and his mother began once again to help him and Milton started experiments which led to the recipe for ‘Hershey’s Crystal’ a ‘melt in your mouth’ caramel candy made with milk.” [6]

“In 1924 [Clarence] Birdseye (Birdseye Foods) helped form the General Sea Foods Co. in Gloucester, Mass., and he began freezing food on a commercial scale… But despite an infusion of cash from a few investors as well as the creation of specially made freezers to hold his product, the country was not yet ready to accept the prospect of frozen food. It took another seven years before Birdseye’s vision came to fruition. As time passed, he continued his experiments with the quick-freezing process… Almost bankrupt, Birdseye continued to press for believers in his inventions. In 1925 he found one in the guise of Postum Cereal heiress Marjorie Merriweather Post.” [7]

Walt Disney (Disney) not only went bankrupt, but also experienced additional adversities. “The company failed due to Disney’s inability to manage the finances, but Disney persevered, continuing to believe in himself and in his dream. He teamed up with his brother, who took care of the financial side of the business and the two moved to Hollywood to found Disney Brothers’ Studio.

But there would still be stumbling blocks. The studio created the popular Oswald the Lucky Rabbit cartoon character for Universal, but when Disney requested an increase in budget, producer Charles B. Mintz instead hired away most of Disney’s animators and took over production of the cartoon in his own studio. Universal owned the character’s trademark, so there was little Disney could do.

After the Oswald fiasco, Disney set about creating a new cartoon character to replace Oswald. That character became one of the most recognizable symbols in the world: Mickey Mouse.” [8]

[1] Kristina Dell, Airline Maverick (Time Magazine, September 21, 2007)

[2] Gaetz Erin, Conrad Hilton’s Secret of Success (American Heritage People, August 2, 2006)

[3] Earle Joe, Olive Ann Beech Rose to Business Greatness (The Wichita Eagle, February 11, 1985)

[4] The Greeting Card King (Time Magazine, November 30, 1959)

[5] Vinnedge Mary, From the Corner Office – Herb Kelleher (Success Magazine, 2010)

[6] Milton S. Hershey: 1857-1945 (Milton Hershey School; mhs-pa.org)

[7] Elan Elissa Clarence Birdseye (Nation’s Restaurant News, Feb, 1996)

[8] Bostwick Heleigh, Turning a Dream into a Kingdom: The Walt Disney Story (LegalZoom, July 2009)

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011)

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Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
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