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Lessons from the Great American Leaders & How They Apply Now

Archive for the ‘Emotional Standing’ Category

Legitimacy: The Sole Basis of Leadership

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My research on the leadership qualities and characteristics of famous American leaders to determine what makes leaders great, I designated a pattern that defined the great leaders as The Legitimacy Principles. These were presented in a previous article: For the purpose of clarification, the definition of The Legitimacy Principles need to be restated:

The Legitimacy Principles enumerate the linkages of leaders’ legitimacy, credibility, trust and a balance of emotional standing and bonds with all key constituencies.

The synergetic relationship between these key factors of success is the foundation of effective leadership and provides insight into a new definition of it.

The fundamental essence of leadership is legitimacy, whose substance is based upon authority and validity. While authority is conferred, validity is earned through the development of credibility, trust and a balance of emotional standing and connections with all key constituencies.

The presence of the Legitimacy Principles endow leaders with the authority to lead, manage, execute, empower, effectively communicate, sell their vision, generate a passion for success, and overcome adversity. Their absence results in ultimate failure as an effective leader.

Legitimacy is the cornerstone of effective leadership. Jon Huntsman, Sr wrote in his book, Winners Never Cheat Even in Difficult Times:

“Effective, respected leadership is maintained through mutual agreement. Leadership demanded is leadership denied. Leadership is not meant to be dominion over others. Rather, it is the composite of characteristics that earns respect, results, and a continued following.”

The great leaders possess this critical leadership trait. However, legitimacy is seldom discussed, if even mentioned in most leadership books. The absence of a definitive definition leads to confusion as to what defines legitimacy. Its definition needs to be clarified and placed within a proper context.

It is assumed that leaders automatically possess legitimacy. My research demonstrates that this is a fallacy. It shows that legitimacy is derived from two separate sources that grant leaders permission to lead.

Related: Have You Earned Permission to Lead?

The first source is authority or the power granted to leaders by either election, or appointment to an office. In the business setting, this is conferred by the stockholders through the board of directors. Rudolph Giuliani observed:

“A leader is chosen because whoever puts him there trusts his judgment, character and intelligence… It’s a leader’s duty to act on those attributes.”

The second source is validity. Validity is not conferred, nor is it automatically achieved once one is appointed. It is earned and is a contributing factor to the authority granted to a leader, typically over the span of his or her career. This defines a leader as genuine and authentic in the eyes of all key constituencies.

Related: Emotional Bonds are a Reflection of a Leader’s Effectiveness

Both sources of legitimacy compliment each other, but validity provides an enduring, yet fragile acquiescence of all the constituencies that gives a leader the tacit permission to lead. It is built upon three critical factors: trust, credibility and emotional balance.

My research demonstrates that these are the hallmarks of great leaders. Without the presence of these three critical factors, the leader’s validity collapses. Once a leader loses his or her validity, the authority to lead is significantly undermined.

Huntsman stated:

“Leadership is a privilege. Those who receive the mantle must also know they can expect an accounting of their stewardships. It is not uncommon for people to forego higher salaries to join an organization with strong, ethical leadership. Most individuals desire leadership they can admire and respect. They want to be in sync with that brand of leader, and will often parallel their own lives after that person…”

Related: Your Commitment to Others Defines You as a Leader

For more information on this topic and to read a free chapter, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It by Timothy F. Bednarz (Majorium Business Press, Stevens Point, WI 2011).

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 © 2012 Timothy F. Bednarz, All Rights Reserved

How Connected Are You?

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Analysis validates that emotional connections with key constituencies tend to begin early and continue throughout the leader’s career as they develop a personal standing with each group. Early emotional connections are able to develop into stronger bonds of trust. This gives leaders the legitimacy, credibility and trust, which lead to future growth, either in their businesses or in their advancement to more prominent positions.

My research revealed that great leaders created emotional balance. This is the development of emotional bonds and standing individual key constituencies. It is important because it reflects leaders’ attention and performance with each group. It is an outcome of leaders’ actions and performance, and mirrors the overall health and sustainability of the organization. An imbalance pinpoints potential problems and issues that can damage an organization in the future.

While emotional bonds are a reflection of a leader’s effectiveness, they also are the underpinnings of credibility, trust, validity and legitimacy. This is a cyclical relationship since these characteristics must be firmly established before emotional bonds and standing can be formed. Yet, a leader’s emotional standing with key constituencies is essential to foster credibility, trust, validity and legitimacy. A positive outcome of this relationship is that strong emotional bonds ultimately pay big dividends in the form of loyalty. This is an additional factor, which strengthens a leader’s validity and legitimacy. Research showed that during periods of difficulty, this often meant the difference between success and failure. A notable example is Fred Smith when FedEx experienced a monumental problem because of a UPS strike. Consequently, FedEx was swamped with 800,000 extra packages a day. His strong emotional standing, which had instilled a robust sense of company loyalty, bore fruit during this crisis. Thousands of employees voluntarily poured into the hubs a little before midnight to sort the mountain of extra packages. Many had already worked previous shifts and stayed over to help the company overcome the crisis. As a result, FedEx achieved a 2% gain in market share and saw its share price rise by 70% over the subsequent twelve months.

The emphasis of shareholder value over the past decades often created imbalance. An analysis of the financial performance of companies with this focus typically underperformed those companies where the leadership fostered key relationships. Every one of the leaders included in Portfolio Magazine’slist of the “Worst Performing CEO’s,” who were included in the research, revealed significant emotional imbalances among their constituencies. Jack Welch reinforces this when he stated succinctly in his 2009 Financial Times interview, “Your main constituencies are your employees, your customers and your products.”[1]

A prime example of emotional balance was demonstrated in 1982, when James Burke, CEO of Johnson & Johnson was confronted with the news of seven poison-related deaths, caused by Tylenol capsules that were laced with cyanide. He looked the facts in the face and immediately understood the gravity of the situation. Against the vehement opposition from his management team, he decided to go directly to the public. Backed with a $ 50 million product recall, he communicated a strong sense of concern, openness and accountability as he frequently appeared on the major and influential television talk shows of the time. This contributed to the restoration of public trust and saved the Tylenol brand. Burke was strong, bold and decisive and this built a solid base of trust and confidence. He placed his legitimacy, personal stature and reputation on the line. His proactive communications brought his message to the public, and by doing so, controlled the crisis, accompanying expectations and ultimately protected his company’s image and reputation.

A synergetic relationship and a balance between these emotional bonds were observed during the research. Each supports and reinforces the other. If one area fails, it contributes to the failure of the others. For example, leaders like Al Dunlap (Sunbeam) made profit-enhancing decisions that deeply impacted employees, reduced product quality and squeezed vendors and suppliers. In many instances, these destroyed the emotional bonds with each key constituency, while refocusing on their emotional standing solely with the board and stockholders. While in the short-term these leaders were hailed as triumphant heroes and celebrated by investors, in the long-term they undermined the cohesiveness of legitimacy, validity and critical emotional bonds. Ultimately, performance suffered and they lost their emotional standing with the stockholders. Once this occurred, they were removed from their positions, if they didn’t have the foresight to prematurely depart, while leaving a mess for someone else to clean up.

[1] Guerrera, Francesco, Welch Condemns Share Price Focus (Financial Times) March 12, 2009

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

If you would like to learn more about the great American leaders built emotional bonds and standing with their key constituencies, through their own inspiring words and stories, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It. It illustrates how great leaders built great companies, and how you can apply the strategies, concepts and techniques that they pioneered to improve your own leadership skills. Click here to learn more.

Copyright © 2011 Timothy F. Bednarz All Rights Reserved

How Credible Are You As a Leader?

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If legitimacy is the foundation of leadership, then credibility is its pivotal point. Everything revolves around the leader’s credibility. It is the most important aspect of leadership, yet it is often either ignored or minimized. It may be assumed that most individuals are already aware of the importance of their credibility, but my research shows that this is not always the case. However, the great leaders understood the critical importance of credibility in their lives.

Professional credibility is an assessment of the leader’s skills and abilities. Simply put, does the leader possess the tools to do the job? As leaders face challenges and must overcome pressing problems and issues, it is a question that will continually arise in the minds of all constituencies, and will be viewed through the lens of their individual agendas.

Whereas personal credibility assesses the leader as a trustworthy individual, professional credibility evaluates the leader’s professional abilities. However, both are closely aligned, as questions or doubts of a leader’s veracity and trustworthiness may taint his or her professional credibility.

An example of this occurred when Steve Jobs (Apple Computer) negotiated a deal with Carly Fiorina (Hewlett Packard) so that Hewlett Packard could manufacture a HP-branded iPod. The deal included a provision that Apple would work with HP to develop transcoding, so the device would be compatible with the Windows Media player. After the deal was agreed to, Jobs never allowed the transcoding, “but the contract still locked HP out of the MP3 player market until Apple dominated it. Effectively, Steve Jobs “Steve’d,” HP and people there are still pissed. Right or wrong, it worked …”[1] This typifies the behavior of a leader who may have professional credibility and be deficient in personal credibility.

The Jobs’ example illustrates how a leader’s professional credibility might impact a company’s performance and profitability. This includes taking financial risks that may place the company’s sustainability at risk, or as in Job’s case, make it liable to potential lawsuits. While Jobs achieved a strategic advantage over Hewlett-Packard, and may have been considered extremely clever, by some individuals, it damaged both his and Apple’s credibility.

Other notable examples of leaders who took enormous financial risks include Richard Fuld (Lehman Brothers), Martin Sullivan (AIG), Jimmy Cayne (Bear Sterns), as well as a host of other CEO’s. Their professional incompetence resulted in causing financial havoc, not only on their companies, but also upon the economy as a whole.

All of these examples underscore the importance of a leader’s professional credibility to their company’s performance and sustainability, especially to all key constituencies. Without any, the company can flounder and ultimately fail.

[1] Enderle, Rob, Apple Without Steve Is Like Disney Without Walt (Tech News World, January 19, 2009)

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

If you would like to learn more about the great American leaders established credibility with their key constituencies, through their own inspiring words and stories, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It. It illustrates how great leaders built great companies, and how you can apply the strategies, concepts and techniques that they pioneered to improve your own leadership skills. Click here to learn more.

Copyright © 2011 Timothy F. Bednarz All Rights Reserved

The Value of Sacrifice

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Whether effective or ineffective, individuals viewed as leaders are models of behavior that are closely observed and judged by others. Inherent expectations of leaders include personal sacrifice. They are expected to sacrifice for the benefit of others within their organizations. Leaders who expect sacrifice from their employees, stakeholders or constituencies and yet refuse to make the same personal sacrifices are judged as hypocrites.

Nothing undermines organizational leaders more than an attitude of “do as I say, not do as I do.” This is clearly demonstrated during the current recession when jobs are cut, wages frozen and budgets slashed. As individuals suffer from the consequences of these actions, they become enraged at the excesses displayed by their so-called leaders who collect large bonuses and spend monies for parties and expensive trips and dinners. There is no sacrifice displayed, while others have to pinch their belts. This destroys credibility and undermines trust.

When leaders demonstrate a posture of shared sacrifice, a term I don’t like to use due to its political and progressive definitions, this builds loyalty and trust that can be built on when its needed to rebuild the business.

Leaders need to model sacrifice within their organizations if they expect their employees to sacrifice during difficult times.

Sadly, too many high profile leaders ignore this. However, many others do, so I can’t make a broad accusation. Yet this is one of the reasons for the demise of leadership and its failure. Too many leaders take care of themselves, while ignoring the needs of those they are tasked to lead.

If you would like to learn more about the great American leader’s personal sacrifice, through their own inspiring words and stories, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It. It illustrates how great leaders built great companies, and how you can apply the strategies, concepts and techniques that they pioneered to improve your own leadership skills. Click here to learn more.

Copyright © 2009 Timothy F. Bednarz All Rights Reserved

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