Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

Posts Tagged ‘Emotional standing

You Are Judged By The Actions You Take

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Herb Kelleher - Southwest Airlines  (Alex Wong - Getty Images)

Herb Kelleher – Southwest Airlines (Alex Wong – Getty Images)

Of all the leaders surveyed, the great ones were individuals who consistently displayed their integrity and character. No matter what happened in their lives: adversity, controversies, failure and defeat, their character shined through. It established deep personal credibility with each of their constituencies, as well as all others that came into contact with them.

First and foremost, leaders are judged by the actions they take. Today’s high profile leaders are prominently visible to all of their key constituencies. They make speeches and presentations to employees, shareholders, financial analysts, and the public in general.

Herb Kelleher (Southwest Airlines) exemplifies this. “He’s totally true to himself and totally consistent between his private life and his public life. He’s totally consistent between his public speeches and his private speeches. You could look at a speech that Herb gave to the annual shareholders meeting of 2002 and compare it to his message to the field in 1992 and compare it to a letter to employees in 1982 and find tremendous consistency in terms of adherence to core values. So the absolute adherence to extraordinarily high professional principles of ethical conduct and fair dealing, is just remarkable over time. So he built up a reservoir of credibility not only among employees but other people.”[1]

Many leaders may sound impressive, but simultaneously undermine their credibility since their actions fail to mirror their words. In some instances, leaders’ actions contradict their company’s mission statement, resulting in confusion within their organization. In either case, their personal actions become corrosive to the organizational culture, as well as their own individual credibility.

As a high profile leader, Carly Fiorina’s (Hewlett Packard) actions were highly scruntized and undermined her credibility. “Fiorina came in with a mandate of change, but didn’t make any effort to build trust between herself and the company. Indeed, she sullied her image by exalting herself without regard to her employees’ reactions. Buying a personal jet in front of a distrustful and alienated workforce is one example. Freezing employee salaries while giving herself and her executive ilk bonuses is another. Doing these things in light of nearly 18,000 employee dismissals (2003) is just plain callous.”[2]

Leaders’ actions set the tone for their organization, whether they realize it or not. They can either inspire or generate resentment in their employees. Fred Smith (FedEx) inspired his organization by setting a tone where all his employees felt they could share in the success of the company. He stated, “One of the biggest principles is that you’ve got to take action. Most large organizations reach a static point. They cannot take any action, because there are all types of barriers to doing so. There are institutionalized barriers that weren’t there when the company was considerably smaller. What changes is your knowledge and your appreciation of how to deal with those institutional barriers, to eliminate them or use them to your advantage in achieving those changes. There are myriad number of changes that have to take place in the management style for the company to continue growing.”[3]

“’Andy [Grove][Intel] has always been a teacher – often by example,’ says Ron Whittier, senior vice president in charge of content development… Yet I don’t think he wants to be remembered as a great visionary – but as someone who made things happen and created a great company.’”[4]

All constituencies expect leaders to be fair, just and consistent. Any perception of cronyism and the use of internal politics to develop an advantage for one individual or group generates unintended consequences, as these policies and actions are replicated at lower levels. Yet, for certain types of leaders, potential gains are too tempting not to employ these practices. Their focus on personal gain, however, becomes transparent to the rest of the organization. This destroys trust and channels of openness and honesty throughout the company. Fredrick Joseph (Drexel Burnham) created a dysfunctional culture when he ignored the unethical practices and securities violations of high-powered Michael Milken, and his creation of the junk bond business. The insider-trader scandals surrounding Milken ultimately led to the largest bankruptcy in Wall Street history at that time.

These actions hamper leaders’ abilities to instill their ideas, beliefs and values in others, and significantly hinder them when communicating sweeping strategies that are needed to move organizations forward. Rather than unite different factions, they splinter any existing unity, as different groups jockey for position. Leaders in this position typically tend to use their authority and power in a repressive rather than productive manner. It saps the company’s available resources and diminishes its productivity.

A notable and well-publicized example of this practice is Al Dunlap (Sunbeam). “In Dunlap’s presence, knees trembled and stomachs churned. Underlings feared the torrential harangue that Dunlap could unleash at any moment. At his worst, he became viciously profane, even violent. Executives said he would throw papers or furniture, bang his hands on his desk, and shout so ferociously that a manager’s hair would be blown back by the stream of air that rushed from Dunlap’s mouth. “Hair spray day” became a code phrase among execs, signifying a potential tantrum.”[5]

My research of some of the poorest performing leaders substantiated that many also made questionable and highly risky financial decisions that placed their companies at risk, and placed the well being of shareholders far above the interests of their customers.

“In the service of a quick buck, he [Al Dunlap – Sunbeam] imposed brutal pressure on honest people, placing their careers, incomes, health insurance, and pensions at stake. He made impossible, irrational demands that were ruinous to the long-term prosperity of companies. The leadership style he practiced was inconsistent with good business, thoughtful management, a strong economy….”[6]

Jon Huntsman (Huntsman Chemical) observed. “People often offer as an excuse for lying, cheating, and fraud that they were pressured into it by high expectations or that “everyone does it.” Some claim that it is the only way they can keep up. Those excuses sound better than the real reasons they choose the improper course: arrogance, power trips, greed, and lack of backbone, all of which are equal-opportunity afflictions.”[7]

The great leaders were committed to others and demanded excellence from all. They forged building blocks of growth and were proactive as they mastered execution of their plans within all levels of their organization. They demanded accountability on all levels and did not delegate this responsibility. They held themselves equally accountable, and adhered to the same standards as were established for the lowest level employee. This typically appealed to their personal sense of fairness.

“More than anyone, leaders should welcome being held accountable. Nothing builds confidence in a leader more than a willingness to take responsibility for what happens during his watch. One might add that nothing builds a stronger case for holding employees to a high standard than a boss who holds himself to even higher ones.”[8]

These leaders were passionate, and demonstrated a high level of personal drive and resilience. These factors made it possible to build emotional connections with key constituencies, especially needed during difficult periods.

Finally, one of the most notable distinctions of great leaders was found in their restraint and self-control. It inspired confidence in all key constituencies. A key example of this trait was the composure and stature James Burke (Johnson & Johnson) displayed during the Tylenol scare. His actions are attributed to saving that brand and securing the company’s impeccable reputation.

[1] Yeh Raymond T. with Yeh Stephanie H., The Art of Business: In the Footsteps of Giants (Zero Time Publishing, 2004)
[2] Knufken, Drea, 10 Reasons People Hate Carly Fiorina (Business Pundit) June 18, 2008
[3] Hafner, Katie, Fred Smith: The Entrepreneur Redux (Inc. Magazine, June 1, 1984)
[4] Sheridan John H., 1997 Technology Leader of the Year Andy Grove: Building an Information Age Legacy (Industry Week, April 19-21, 2010)
[5] Byrne, John A., Chainsaw (Harper Business, 1999, 2003) p 353-354
[6] Gallagher Bill, Once a Bum, Always a Bum (Niagara Falls Reporter, January 29, 2002)
[7] Huntsman, Jon M., Winners Never Cheat Even in Difficult Times (Wharton School Publishing, Upper Saddle River, New Jersey, 2008) p 35
[8] Giuliani, Rudolph, Leadership (Hyperion, New York, 2002) p 70

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)

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 Earned Permission to Lead?

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legitimacyprincipleschart

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.

Legitimacy is a cornerstone of effective leadership. All of the great leaders have it. However, legitimacy is seldom discussed, if even mentioned in most leadership books. This leads to confusion as to what defines legitimacy. Its definition needs to be clarified and placed within the proper context.

Legitimacy is derived from two separate sources that give leaders 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.

The second source is validity. Validity is not conferred, nor is it automatically achieved once a leader is appointed to a position. 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.

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. These are the hallmarks of great leaders. Without the presence of these critical factors, the leader’s validity collapses. Once a leader loses his or her validity, the authority to lead is effectively undermined.

“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…” [1]

[1] Huntsman,Jon M. Winners Never Cheat Even in Difficult Times (Wharton School Publishing, Upper Saddle River, NJ, 2009) p 73

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

//

Leaders Are Judged By The Actions They Take

with one comment

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

Of all the leaders surveyed, the great ones were individuals who consistently displayed their integrity and character. No matter what happened in their lives: adversity, controversies, failure and defeat, their character shined through. It established deep personal credibility with each of their constituencies, as well as all others that came into contact with them.

First and foremost, leaders are judged by the actions they take. Today’s high profile leaders are prominently visible to all of their key constituencies. They make speeches and presentations to employees, shareholders, financial analysts, and the public in general.

Herb Kelleher (Southwest Airlines) exemplifies this. “He’s totally true to himself and totally consistent between his private life and his public life. He’s totally consistent between his public speeches and his private speeches. You could look at a speech that Herb gave to the annual shareholders meeting of 2002 and compare it to his message to the field in 1992 and compare it to a letter to employees in 1982 and find tremendous consistency in terms of adherence to core values.

So the absolute adherence to extraordinarily high professional principles of ethical conduct and fair dealing, is just remarkable over time. So he built up a reservoir of credibility not only among employees but other people.”[1]

Many leaders may sound impressive, but simultaneously undermine their credibility since their actions fail to mirror their words. In some instances, leaders’ actions contradict their company’s mission statement, resulting in confusion within their organization. In either case, their personal actions become corrosive to the organizational culture, as well as their own individual credibility.

As a high profile leader, Carly Fiorina’s (Hewlett Packard) actions were highly scruntized and undermined her credibility. “Fiorina came in with a mandate of change, but didn’t make any effort to build trust between herself and the company. Indeed, she sullied her image by exalting herself without regard to her employees’ reactions.

Buying a personal jet in front of a distrustful and alienated workforce is one example. Freezing employee salaries while giving herself and her executive ilk bonuses is another. Doing these things in light of nearly 18,000 employee dismissals (2003) is just plain callous.”[2]

Leaders’ actions set the tone for their organization, whether they realize it or not. They can either inspire or generate resentment in their employees. Fred Smith (FedEx) inspired his organization by setting a tone where all his employees felt they could share in the success of the company.

He stated, “One of the biggest principles is that you’ve got to take action. Most large organizations reach a static point. They cannot take any action, because there are all types of barriers to doing so. There are institutionalized barriers that weren’t there when the company was considerably smaller. What changes is your knowledge and your appreciation of how to deal with those institutional barriers, to eliminate them or use them to your advantage in achieving those changes. There are myriad number of changes that have to take place in the management style for the company to continue growing.”[3]

“’Andy [Grove][Intel] has always been a teacher – often by example,’ says Ron Whittier, senior vice president in charge of content development… Yet I don’t think he wants to be remembered as a great visionary – but as someone who made things happen and created a great company.’”[4]

All constituencies expect leaders to be fair, just and consistent. Any perception of cronyism and the use of internal politics to develop an advantage for one individual or group generates unintended consequences, as these policies and actions are replicated at lower levels. Yet, for certain types of leaders, potential gains are too tempting not to employ these practices.

Their focus on personal gain, however, becomes transparent to the rest of the organization. This destroys trust and channels of openness and honesty throughout the company. Fredrick Joseph (Drexel Burnham) created a dysfunctional culture when he ignored the unethical practices and securities violations of high-powered Michael Milken, and his creation of the junk bond business. The insider-trader scandals surrounding Milken ultimately led to the largest bankruptcy in Wall Street history at that time.

These actions hamper leaders’ abilities to instill their ideas, beliefs and values in others, and significantly hinder them when communicating sweeping strategies that are needed to move organizations forward. Rather than unite different factions, they splinter any existing unity, as different groups jockey for position. Leaders in this position typically tend to use their authority and power in a repressive rather than productive manner. It saps the company’s available resources and diminishes its productivity.

A notable and well-publicized example of this practice is Al Dunlap (Sunbeam). “In Dunlap’s presence, knees trembled and stomachs churned. Underlings feared the torrential harangue that Dunlap could unleash at any moment. At his worst, he became viciously profane, even violent. Executives said he would throw papers or furniture, bang his hands on his desk, and shout so ferociously that a manager’s hair would be blown back by the stream of air that rushed from Dunlap’s mouth. “Hair spray day” became a code phrase among execs, signifying a potential tantrum.”[5]

My research of some of the poorest performing leaders substantiated that many also made questionable and highly risky financial decisions that placed their companies at risk, and placed the well being of shareholders far above the interests of their customers.

“In the service of a quick buck, he [Al Dunlap – Sunbeam] imposed brutal pressure on honest people, placing their careers, incomes, health insurance, and pensions at stake. He made impossible, irrational demands that were ruinous to the long-term prosperity of companies. The leadership style he practiced was inconsistent with good business, thoughtful management, a strong economy….”[6]

Jon Huntsman (Huntsman Chemical) observed. “People often offer as an excuse for lying, cheating, and fraud that they were pressured into it by high expectations or that “everyone does it.” Some claim that it is the only way they can keep up. Those excuses sound better than the real reasons they choose the improper course: arrogance, power trips, greed, and lack of backbone, all of which are equal-opportunity afflictions.”[7]

The great leaders were committed to others and demanded excellence from all. They forged building blocks of growth and were proactive as they mastered execution of their plans within all levels of their organization.

They demanded accountability on all levels and did not delegate this responsibility. They held themselves equally accountable, and adhered to the same standards as were established for the lowest level employee. This typically appealed to their personal sense of fairness.

“More than anyone, leaders should welcome being held accountable. Nothing builds confidence in a leader more than a willingness to take responsibility for what happens during his watch. One might add that nothing builds a stronger case for holding employees to a high standard than a boss who holds himself to even higher ones.”[8]

These leaders were passionate, and demonstrated a high level of personal drive and resilience. These factors made it possible to build emotional connections with key constituencies, especially needed during difficult periods.

Finally, one of the most notable distinctions of great leaders was found in their restraint and self-control. It inspired confidence in all key constituencies. A key example of this trait was the composure and stature James Burke (Johnson & Johnson) displayed during the Tylenol scare. His actions are attributed to saving that brand and securing the company’s impeccable reputation.

Related:

  1. Legitimacy: The Sole Basis of Leadership
  2. Does Compassion and Empathy Have a Role in Leadership?
  3. Your Commitment to Others Defines You as a Leader

References:

  1. Yeh Raymond T. with Yeh Stephanie H., The Art of Business: In the Footsteps of Giants (Zero Time Publishing, 2004)
  2. Knufken, Drea, 10 Reasons People Hate Carly Fiorina (Business Pundit) June 18, 2008
  3. Hafner, Katie, Fred Smith: The Entrepreneur Redux (Inc. Magazine, June 1, 1984)
  4. Sheridan John H., 1997 Technology Leader of the Year Andy Grove: Building an Information Age Legacy (Industry Week, April 19-21, 2010)
  5. Byrne, John A., Chainsaw (Harper Business, 1999, 2003) p 353-354
  6. Gallagher Bill, Once a Bum, Always a Bum (Niagara Falls Reporter, January 29, 2002)
  7. Huntsman, Jon M., Winners Never Cheat Even in Difficult Times (Wharton School Publishing, Upper Saddle River, New Jersey, 2008) p 35
  8. Giuliani, Rudolph, Leadership (Hyperion, New York, 2002) p 70

 

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

 

//

Personal Credibility is Anchored in Character and Integrity

with 2 comments

William Hewlett and David Packard - Founders of Hewlett-Packard

William Hewlett and David Packard – Founders of Hewlett-Packard

Personal credibility is based upon a leader’s character and integrity and the actions and behaviors that stem from them. Far from perfect, many of the influential American leaders I surveyed possessed character flaws and displayed at times, questionable ethical behaviors. Yet their personal credibility remained intact.

So it is safe to ascertain that perfection is not humanly expected and attainable as a leader, but self-awareness of one’s strengths and weaknesses is essential. It reflects both maturity and authenticity, which only then serves to enhance a leader’s personal credibility.

An observance of the absence of self-awareness resulted in a strong emergence of arrogance and hubris that diminished and ultimately destroyed credibility on all levels.

Obviously unless problematic or weak leaders make concerted efforts to change their character and integrity, they are remain unalterable. However leaders do have control over the actions, behaviors and decisions that influence and shape their personal credibility.

This once again involves self-awareness as well as comprehensive critical thinking abilities to examine the consequences of both their long and short-term actions. All leaders have choices, but the right choices demand a leader’s willingness and acquiescence.

Leaders must also be cognizant of their levels of personal credibility on all of their key constituencies. In the current environment where short-term profitability is emphasized, many leaders damage their credibility by only focusing on their shareholder expectations at the expense of their other constituencies.

My research demonstrates this can be fatal. The leaders listed Worst CEOs of All Time by Portfolio Magazine commonly practiced it. As evidenced within the Legitimacy Principles, this imbalance ultimately leads to a loss of validity.

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.

What can we learn from these leader’s examples and apply to our lives? In summary, the following recommendations are suggested:

  1. Develop an awareness of your personal strengths and weaknesses including a frank assessment of your character and personal levels of integrity.
  2. Determine how these affect your personal credibility.
  3. Identify what actions, decisions and behaviors you can change.
  4. Develop a habit of assessing the impact and consequences of your actions on your personal credibility.
  5. Change what you can, and manage and control what you can’t.
  6. Remember this is an evolutionary process and not a singular event. History shows that individuals evolved into becoming great leaders over the span of their entire careers. For many it was a struggle.

It is important to remember that no leader is an island onto oneself, who functions in isolation. Nor is the individual the first one to encounter problems associated with building his or her credibility. Universally, the leaders surveyed all struggled with this issue at one point or another in their careers.

Related:

Legitimacy: The Sole Basis of Leadership

An Accurate Predictor of Leadership Performance

Five Ways to Establish Trust and Credibility

Eight Actions Determine If You Can Be Trusted

Adapted From: 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

Leaders Are Judged By The Actions They Take

with 2 comments

Herb-Kelleher - Founder of Southwest AirlinesPhoto by William-Thomas-Cain-Getty-Images

Herb-Kelleher – Founder of Southwest Airlines
Photo by William Thomas Cain-Getty Images

Of all the leaders surveyed, the great ones were individuals who consistently displayed their integrity and character. No matter what happened in their lives: adversity, controversies, failure and defeat, their character shined through. It established deep personal credibility with each of their constituencies, as well as all others that came into contact with them.

First and foremost, leaders are judged by the actions they take. Today’s high profile leaders are prominently visible to all of their key constituencies. They make speeches and presentations to employees, shareholders, financial analysts, and the public in general.

Herb Kelleher (Southwest Airlines) exemplifies this. “He’s totally true to himself and totally consistent between his private life and his public life. He’s totally consistent between his public speeches and his private speeches. You could look at a speech that Herb gave to the annual shareholders meeting of 2002 and compare it to his message to the field in 1992 and compare it to a letter to employees in 1982 and find tremendous consistency in terms of adherence to core values.

So the absolute adherence to extraordinarily high professional principles of ethical conduct and fair dealing, is just remarkable over time. So he built up a reservoir of credibility not only among employees but other people.”[1]

Many leaders may sound impressive, but simultaneously undermine their credibility since their actions fail to mirror their words. In some instances, leaders’ actions contradict their company’s mission statement, resulting in confusion within their organization. In either case, their personal actions become corrosive to the organizational culture, as well as their own individual credibility.

As a high profile leader, Carly Fiorina’s (Hewlett Packard) actions were highly scruntized and undermined her credibility. “Fiorina came in with a mandate of change, but didn’t make any effort to build trust between herself and the company. Indeed, she sullied her image by exalting herself without regard to her employees’ reactions.

Buying a personal jet in front of a distrustful and alienated workforce is one example. Freezing employee salaries while giving herself and her executive ilk bonuses is another. Doing these things in light of nearly 18,000 employee dismissals (2003) is just plain callous.”[2]

Leaders’ actions set the tone for their organization, whether they realize it or not. They can either inspire or generate resentment in their employees. Fred Smith (FedEx) inspired his organization by setting a tone where all his employees felt they could share in the success of the company.

He stated, “One of the biggest principles is that you’ve got to take action. Most large organizations reach a static point. They cannot take any action, because there are all types of barriers to doing so. There are institutionalized barriers that weren’t there when the company was considerably smaller. What changes is your knowledge and your appreciation of how to deal with those institutional barriers, to eliminate them or use them to your advantage in achieving those changes. There are myriad number of changes that have to take place in the management style for the company to continue growing.”[3]

“’Andy [Grove][Intel] has always been a teacher – often by example,’ says Ron Whittier, senior vice president in charge of content development… Yet I don’t think he wants to be remembered as a great visionary – but as someone who made things happen and created a great company.’”[4]

All constituencies expect leaders to be fair, just and consistent. Any perception of cronyism and the use of internal politics to develop an advantage for one individual or group generates unintended consequences, as these policies and actions are replicated at lower levels. Yet, for certain types of leaders, potential gains are too tempting not to employ these practices.

Their focus on personal gain, however, becomes transparent to the rest of the organization. This destroys trust and channels of openness and honesty throughout the company. Fredrick Joseph (Drexel Burnham) created a dysfunctional culture when he ignored the unethical practices and securities violations of high-powered Michael Milken, and his creation of the junk bond business. The insider-trader scandals surrounding Milken ultimately led to the largest bankruptcy in Wall Street history at that time.

These actions hamper leaders’ abilities to instill their ideas, beliefs and values in others, and significantly hinder them when communicating sweeping strategies that are needed to move organizations forward. Rather than unite different factions, they splinter any existing unity, as different groups jockey for position. Leaders in this position typically tend to use their authority and power in a repressive rather than productive manner. It saps the company’s available resources and diminishes its productivity.

A notable and well-publicized example of this practice is Al Dunlap (Sunbeam). “In Dunlap’s presence, knees trembled and stomachs churned. Underlings feared the torrential harangue that Dunlap could unleash at any moment. At his worst, he became viciously profane, even violent. Executives said he would throw papers or furniture, bang his hands on his desk, and shout so ferociously that a manager’s hair would be blown back by the stream of air that rushed from Dunlap’s mouth. “Hair spray day” became a code phrase among execs, signifying a potential tantrum.”[5]

My research of some of the poorest performing leaders substantiated that many also made questionable and highly risky financial decisions that placed their companies at risk, and placed the well being of shareholders far above the interests of their customers.

“In the service of a quick buck, he [Al Dunlap – Sunbeam] imposed brutal pressure on honest people, placing their careers, incomes, health insurance, and pensions at stake. He made impossible, irrational demands that were ruinous to the long-term prosperity of companies. The leadership style he practiced was inconsistent with good business, thoughtful management, a strong economy….”[6]

Jon Huntsman (Huntsman Chemical) observed. “People often offer as an excuse for lying, cheating, and fraud that they were pressured into it by high expectations or that “everyone does it.” Some claim that it is the only way they can keep up. Those excuses sound better than the real reasons they choose the improper course: arrogance, power trips, greed, and lack of backbone, all of which are equal-opportunity afflictions.”[7]

The great leaders were committed to others and demanded excellence from all. They forged building blocks of growth and were proactive as they mastered execution of their plans within all levels of their organization.

They demanded accountability on all levels and did not delegate this responsibility. They held themselves equally accountable, and adhered to the same standards as were established for the lowest level employee. This typically appealed to their personal sense of fairness.

“More than anyone, leaders should welcome being held accountable. Nothing builds confidence in a leader more than a willingness to take responsibility for what happens during his watch. One might add that nothing builds a stronger case for holding employees to a high standard than a boss who holds himself to even higher ones.”[8]

These leaders were passionate, and demonstrated a high level of personal drive and resilience. These factors made it possible to build emotional connections with key constituencies, especially needed during difficult periods.

Finally, one of the most notable distinctions of great leaders was found in their restraint and self-control. It inspired confidence in all key constituencies. A key example of this trait was the composure and stature James Burke (Johnson & Johnson) displayed during the Tylenol scare. His actions are attributed to saving that brand and securing the company’s impeccable reputation.

Related:

  1. Legitimacy: The Sole Basis of Leadership
  2. Does Compassion and Empathy Have a Role in Leadership?
  3. Your Commitment to Others Defines You as a Leader

References:

  1. Yeh Raymond T. with Yeh Stephanie H., The Art of Business: In the Footsteps of Giants (Zero Time Publishing, 2004)
  2. Knufken, Drea, 10 Reasons People Hate Carly Fiorina (Business Pundit) June 18, 2008
  3. Hafner, Katie, Fred Smith: The Entrepreneur Redux (Inc. Magazine, June 1, 1984)
  4. Sheridan John H., 1997 Technology Leader of the Year Andy Grove: Building an Information Age Legacy (Industry Week, April 19-21, 2010)
  5. Byrne, John A., Chainsaw (Harper Business, 1999, 2003) p 353-354
  6. Gallagher Bill, Once a Bum, Always a Bum (Niagara Falls Reporter, January 29, 2002)
  7. Huntsman, Jon M., Winners Never Cheat Even in Difficult Times (Wharton School Publishing, Upper Saddle River, New Jersey, 2008) p 35
  8. Giuliani, Rudolph, Leadership (Hyperion, New York, 2002) p 70

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 © 2012 Timothy F. Bednarz, All Rights Reserved

Legitimacy: The Sole Basis of Leadership

with 13 comments

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

Leadership: The divergent tale of two leaders

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Tony Hayward – CEO – BP

In 1982, James Burke, CEO of Johnson & Johnson was confronted with the news of seven poison related deaths caused by Tylenol capsules 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, Burke communicated a strong sense of concern, openness and accountability as he frequently appeared on the major television 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 trust and confidence.
    • He placed his personal stature and reputation on the line.
  • Burke’s proactive communications brought his message to the public, and by doing so controlled the crisis, expectations and protected his company’s image and reputation.

Fast forward to 2010:

Tony Hayward when confronted with the enormity of the Deepwater Horizon oil spill mounted a feeble public response.

  • Unlike James Burke, Hayward didn’t immediately grasp the severity of the situation.
    • He didn’t go directly to the public, but rather allowed a hostile media and government to filter his message, while they demonized Hayward and politicized the crisis.
    • He lost control, was hostage to events, and was perceived as weak and reactive.

Response:

Obviously it was easier for Johnson & Johnson to respond quickly with a total product recall, than it was for BP, which had to overcome extreme technical problems to cap a spill over a mile below the ocean’s surface.

However, Hayward could have taken a proactive position, communicating and educating the public about the challenges, progress and shaping their expectations regarding the capping of the spill and the subsequent clean up.

  • His response was further complicated by aggressive legal threats being made against BP by the Department of Justice.
    • Rather than openly communicating with the media and public, communications were effectively shut down.
  • At the same time Hayward was perceived as tone deaf with comments about getting his life back.
    • He appeared disengaged in front of Congress and unconcerned about the plight of the Gulf Coast citizens, while he attended a yacht race in England.
  • Hayward was unaware that his personal stature and reputation were on the line.

Whether or not these interpretations are true, perceptions are stronger than reality.

Consequences:

  • Hayward was ultimately ousted as BP’s CEO and complained about being demonized, victimized and vilified.
  • Contrast that with James Burke’s actions, which are hailed as a textbook response to crisis management.

Outcomes:

The two different outcomes can be attributed to diverse leadership styles.

Burke:

  • Burke was deeply influenced by Johnson & Johnson’s corporate credo, which stated that the “first responsibility” was to its customers and then to employees, management, communities, and stockholders.
    • He reacted accordingly.

Hayward:

  • Hayward placed the crisis into the context of scale. He stated that in relation to the size of the Gulf of Mexico, the spill was relatively small.
    • While that may be a factional response, it displayed a lack of empathy with the people affected by a potentially large environmental disaster.
    • He appeared indifferent to the pain and suffering experienced by these individuals.
    • It shaped a perception of an uncaring executive motivated by profit.

This was reinforced by the Obama administration, which was looking to shift the blame for its poor response. Hayward played into administration’s hands, surrendering control and losing his emotional standing with his key constituencies.

Legitimacy:

Burke:

  • James Burke understood the importance of his emotional standing with all of his key constituencies, because it was ingrained into Johnson & Johnson’s culture.

Hayward:

  • Tony Hayward did not.
    • Within a 100-day period, he destroyed his emotional bonds and standing with key constituencies.
    • When BP posted a $ 17 billion loss, he lost his emotional standing and support with his board and stockholders.
  • His reaction to the crisis unwittingly destroyed the trust, credibility and validity he needed to lead BP.

Lessons Learned:

The lessons learned from Tony Hayward’s actions and response are quite clear.

  • Leaders must pay close attention to the factors that contribute to their validity and legitimacy.
  • Trust, credibility and a balance of emotional bonds and standing are fragile.
  • They take time to develop, sometimes over the span of one’s career.

Trust and credibility can be destroyed, along with one’s reputation in an instant. Hayward placed his reputation and stature on the line, as the face of BP during this crisis. He ignored these lessons at his peril. Both suffered due to his leadership and it will take time to restore them.

For more information on this topic, 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

Originally published on the Examiner.com on September 24, 2012.

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

Written by Timothy F. Bednarz, Ph.D.

October 22, 2012 at 11:31 am

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