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The Importance of Intellectual Honesty

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Louis Gerstner - IBM

Louis Gerstner – IBM

Before leaders can assess risks they must be intellectually honest to completely comprehend the reality surrounding their circumstances. A noteworthy illustration of the practice of intellectual honesty is  (IBM), who was appointed to turn around the floundering company. “He spent his first few months visiting all of IBM’s facilities all over the world taking the opportunity to explain to his concerned employees that his intention was to help the company recover, while at the same time preparing them for forthcoming tough decisions. He also spoke to customers, competitors, consultants, and analysts. Gerstner came to several conclusions:

  • Customers wanted to be provided with solutions to their problems not sold hardware.
  • Computer networking had the potential to transform the way people worked and required different hardware and software to that which IBM was producing.
  • IBM’s products were not the best in the market.
  • The existing plans to split the company were inappropriate because the company could gain many advantages through better integrating what it did.
  • Cost cutting was essential and, despite a reduction of 20 per cent in the workforce over the last six years, more employees would have to go.” [1]

Before Gerstner could transform IBM, he had to face a foreboding sense of reality. The five conclusions he arrived at provided a sobering picture of the reality of what IBM was facing. Without being intellectually honest about what he was dealing with, Gerstner would not have been able to succeed to the degree he did at IBM.

John D. Rockefeller (Standard Oil) also exhibited a high degree of intellectual honesty. Rockefeller’s greatest gift… was the ability to keep a clear head. Hope never skewed his calculations. ‘Look ahead,’ he advises. ‘… 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.’[2]

David Packard (Hewlett-Packard) exhibited a similar characteristic. “Even though Packard is… remembered as a gruff, straightforward man who wasn’t afraid to point out what was wrong and suggest improvements. 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.” [3]

Jack Welch (General Electric) made the following observations concerning investment opportunities, which are risks, since the outcomes are never known and can be difficult to accurately predict. He noted, “The facts are, not all investment opportunities are created equal. But some leaders can’t face that reality, and so they sprinkle their resources like cheese on a pizza, a little bit everywhere. As a result, promising growth opportunities too often don’t get the outsized infusions of cash and people they need. If they did, someone might get offended during the resource allocation process. Someone, as in the manager of a weak business or the sponsor of a dubious investment proposal.” [4]

Sam Walton (Wal-Mart) incorporated and institutionalized intellectual honesty into his company. He observed, “From the very start we would get all our managers together once a week and critique ourselves – that was really our buying organization, a bunch of store managers getting together early Saturday morning, maybe in Bentonville, or maybe in some motel room somewhere. We would review what we had bought and see how many dollars we had committed to it. We would plan promotions and plan the items we intended to buy. And it worked so well that over the years, as we grew and built the company, it just became part of our culture. I guess that was the forerunner of our Saturday morning meetings (where company managers get together and review what they’ve seen in the stores that week). When we made a bad mistake – whether it was myself or anybody else – we talked about it, admitted it, tried to figure out how to correct it, and then moved on to the next day’s work.” [5]


[1]  Johnston Robert, IBM – Creating a Customer-Focused Organization (Warwick Business School, 2007)

[2]  Baida Peter, Rockefeller Remembers (American Heritage Magazine, September/October 1988, Volume 39, Issue 6)

[3]  O’Hanlon Charlene, David Packard: High-Tech Visionary (CRN, November 8, 2000)

[4]  Welch Jack, Bosses Who Get It All Wrong (Business Week, July 23, 2007)

[5]  Sam Walton in His Own Words (Fortune Magazine, June 29, 1992; from: “From Sam Walton: Made in America” by Sam Walton and John Huey)

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

Six Ways to Enhance Your Personal Credibility

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leaderinchair

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 leaders I surveyed had 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 as “Worst CEOs of All Time” by Portfolio Magazine commonly practiced it. This imbalance ultimately leads to a loss of validity.

There are six recommendations you can take to enhance your personal credibility:

  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.

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)

 Click here to Read a Free Chapter.

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

Written by Timothy F. Bednarz, Ph.D.

October 3, 2013 at 11:21 am

Communication Has to Start With Telling the Truth

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Warren Buffett (L), chairman and CEO of Berkshire Hathaway Inc. and David Rubenstein (R), president of the Economic Club of Washington, participate in a discussion during the 25th anniversary celebration dinner of the Economic Club of Washington June 5, 2012 in Washington, DC.  (Photo by Alex Wong/Getty Images)

Warren Buffett (L), chairman and CEO of Berkshire Hathaway Inc. and David Rubenstein (R), president of the Economic Club of Washington, participate in a discussion during the 25th anniversary celebration dinner of the Economic Club of Washington June 5, 2012 in Washington, DC. (Photo by Alex Wong/Getty Images)

Warren Buffett (Berkshire Hathaway) remarked, “‘It’s vital to be able to communicate well… Just being able to communicate with others on the job adds at least 50% to your value.” Open and effective communications at all levels solves many problems and reduces conflict before it even occurs. Lee Iacocca (Chrysler) declared, “A leader has to communicate. I’m not talking about running off at the mouth or spouting sound bites. I’m talking about facing reality and telling the truth…

Communication has to start with telling the truth, even when it’s painful.” Iacocca notes the importance of intellectual honesty as part of the communication process. “Iacocca says he’s not talking about verbosity or sound bites. He means facing reality and telling the truth, even when it’s painful. If you apply spin, people will know—they’re not stupid—and they’ll stop listening.”

“Peter Drucker [felt] the most valuable asset in a firm is the collective knowledge of its employees. But to realize that value, the people in an organization have to be able to share that knowledge. That means ‘them that’s got it’ have to be able to give it to ‘them that don’t.’ And that transaction requires two-way communication between inspired transmitters and welcome receivers.” The great leaders understood this. In fact, most spent a great deal of their time on the “factory floor” meeting with managers, supervisors and employees to see firsthand what is happening and to understand the problems and issues facing their companies.

At Hewlett-Packard it was discovered that “‘Management by Walking Around’ improves communication, improves quality, improves teamwork, and improves profits. Hewlett and Packard’s visible presence and easy availability (they insisted on a company-wide open-door policy, believing that interruptions were a small price to pay for the advantages of open and frank communication with the talented people they hired) earned them deep credibility with their co-workers. A drill press operator on the outskirts of the factory knew that the CEO and President understood what he did and appreciated his contribution.”

As was previously pointed out, John Patterson (National Cash Register) actually moved his office into the middle of his factory floor. While other leaders, such as Henry Heinz (H.J. Heinz), Harvey Firestone (Firestone Tire), William Proctor (Proctor & Gamble), and George Westinghouse (Westinghouse) did not go to that extreme, they still remained highly visible, and openly and frequently communicated with their employees. In recognition of his frequent presence on the factory floor, Harvey Firestone’s casket was walked through his factory one last time, at the time of his death.

The great leaders spent the majority of their time traveling and communicating with employees and key constituencies. This allowed them to become personally acquainted and to influence employees on all levels. It also provided them with the opportunity to elicit feedback to make more accurate and fact-based decisions.

Fredrick Crawford (TRW) spent “much of his time speaking to employees and projecting the force of his ideas and his personality. One observer called him ‘a natural leader of tremendous vitality, self-assurance and singleness of purpose.’ But there was more to the Thompson program than Crawford. At all levels of the organization, managers tried to convince workers that the company had their best interests at heart…

Thompson managers referred employees as ‘members of the Thompson family’ and tried to minimize status distinctions between managers and workers… the firm’s policies were guided by an effort ‘to eliminate class lines and have our relationships on a first name basis.’”

While this may appear commonplace, some influential leaders like Cary Fiorina (Hewlett-Packard), Richard Fuld (Lehman Brothers) and Roger Smith (General Motors) avoided meeting with their employees. Not only that, they strictly limited their accessibility to them. These leaders, among others who exhibited this characteristic, experienced substantial problems on multiple levels.

Related:

The Need to Test Opinions Against the Facts

The Capacity to Face Reality

Don’t Push Out Figures When Facts Are Going in the Opposite Direction

References:

  1. Stein Ben, Ben Stein: More from My Dinner with Warren (Fortune Magazine, January 7, 2010)
  2. Iacocca Lee, Where Have All the Leaders Gone? (Scribner, 2007)
  3. Iacocca on the Need for Leadership Now (Business Management Daily, March 31, 2010)
  4. Willax Paul A., To Communicate Better, Improve Your Listening Skills (New Hampshire Business Review, September 28, 2007)
  5. Orfalea Paul, Helfert Lance, Lowe Atticus and Zatkowsky Dean, Inspirational Figures David Packard (West Coast Asset Management)
  6. Jacoby Sanford M., Reckoning With Company Unions: The Case of Thompson Products, 1934-1964 (Industrial and Labor Relations Review, October 1, 1989)

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

The Capacity to Face Reality

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Intellectual honesty is strongly interrelated to management style. It is framed by the capacity to face the realities confronting leaders, their willingness to have their thinking challenged by advisors and to seek out and consider opinions, even if they may not agree with them.

The following example demonstrates how Michael Dell (Dell Computer) exemplifies this ability. His “ability to call in experienced corporate talent, coupled with Dell’s own lack of corporate experience, has imbued his company with a unique competence–the ability to fail well. When the company hit its first roadblock (a net income decline in 1993 of more than $100 million),

Dell called Bain for counsel… by then-consultant Kevin Rollins. ‘Michael said, ‘I want you to tell me what’s wrong with my company, and fix it at the same time,’ recounts Rollins. ‘I told him that we generally diagnose the problems first, then afterward figure out a solution and then go and implement it. He said, ‘No, do those concurrently.’ So we did, and that started Dell Time, where a quarter is a year in most people’s lives.’”

Related: The Productive Response to Failure

It should be noted that intellectual honesty also incorporates a healthy dose of curiosity that leads to in-depth questioning and insights. After the Second World War, William Blackie (Caterpillar) didn’t like to “make his decisions in some comfortable office. He went out in the field to see for himself and advised others to do the same… Seeing the changes and their effects creates more conviction than being told about it or reading about it.”[1]

Blackie’s own intellectual honesty created the same expectations he demanded from his employees were contributing factors in the growth of Caterpillar during the post World War II period.
Intellectual honesty applies to all company-related aspects, but equally important it also applies to leaders, as they assess their own abilities, behaviors and decisions.

Related: Mistakes as a Source of Innovation

Kemmons Wilson (Holiday Inn) typifies this. “Knowing his strengths and weaknesses is one of Kemmons’ strongest characteristics. He freely admits that he did not have a good education. But he makes up for it by positioning the right people around him.”[2]

The degree of intellectual honesty will directly affect a leader’s critical thinking and decision-making abilities. Key constituencies may question a leader’s professional credibility if he or she refuses to face the facts surrounding a problem or issue and chooses a course of action that may be considered harmful. The same is true if a leader makes a decision and refuses to be challenged. This creates doubts, fosters distrust and leads to a loss of confidence.

My research disclosed that intellectual honesty appeared to be absent in poorer performing leaders, and those whose companies experienced the most problems. These leaders failed to posses the ability to face reality. They refused to be personally challenged and stopped listening to trusted advisors.

In most cases, these leaders were insolated and displayed an intensity of intellectual arrogance and hubris. Thinking they knew more that their constituencies, they quickly alienated them, and often put their companies in jeopardy.

Al Dunlap (Sunbeam) displayed these tendencies throughout his career. “He [Al Dunlap] is utterly convinced of his own greatness, and wholly uninterested in anything that doesn’t further his own self-aggrandizement. The portrait he paints of himself is that of a man who has never made a mistake and has never had a second thought about anything, and whose life has been little more than a series of ever-greater triumphs. He is always ready to tear down someone, especially when he can make himself look good by comparison.” [3]

In addition to Dunlap, three notable examples of this include Robert Allen (AT&T), John Akers (IBM) and Roger Smith (General Motors). In each instance, personal pride and ego prevented them from being intellectually honest about the problems facing their companies. They refused to listen to trusted advisors. They created a series of cascading problems that negatively impacted the company’s performance and further exasperated their difficulties.

My research illustrates instance after instance where great leaders faced problems, were intellectually honest with themselves and others, and established a tone that became the hallmarks of their companies.

Related: Six Ways to Enhance Your Personal Credibility

In 1986, during a second Tylenol crisis, James Burke (Johnson & Johnson) “looked facts in the face. [He] understood the gravity of the situation… partnered with the government and media. When a reporter asked why it happened, Burke responded with crystal clarity and honesty.” [4]

When Cisco company went into a freefall after the markets collapsed in 2001, John Chamber quickly analyzed the problem without affixing blame, determined its seriousness, took harsh and necessary actions to get through it and then prepared for an economic recovery.

“Sam Palmisano, CEO of IBM… said, “John kept the company focused. He said this is where we are, and he drove the company forward… He never dwelled on it.’”

The great leaders allowed their judgments and decisions to be challenged. They encouraged vigorous debate within their organizations. They were willing to seek out expertise to solve problems, even if it was contrary to their own thinking, feelings and intuition. They were open minded and displayed sound judgment when making decisions and evaluating risk.

Prior to taking decisive action during the Tylenol crisis, James Burke (Johnson & Johnson) heard and considered contrary opinions from his advisors, legal counsel and the government not to the take the actions that ultimately vindicated his company. After carefully considering their advice, he decided to adhere to the company’s credo that “proclaimed that J&J’s “first responsibility” was to its customers and then to employees, management, communities, and stockholders-in that order.”

These leaders encouraged the same behaviors in their managers, which drove similar attitudes, skills and abilities deep into the fabric of the organizational culture. In doing so they empowered their employees and created a collaborative environment. This, in turn, fostered innovation and increased their competitive advantage.

Arthur Blank (Home Depot) observed, “Sometimes in business you have to put management in the back seat and let associates take the wheel. At Home Depot, most of our best ideas came from our sales associates. Some of the ideas were brilliant – some were risky…”

Henry Kaiser (Kaiser) and Stephen Bechtel (Bechtel Corporation) fostered high levels of intellectual honesty and collaboration due the size and scope of the production projects their companies worked on. This included the massive shipbuilding yards Kaiser built during the Second World War and the building of the Hoover Dam, that both men participated in. They would not have been able to succeed and grow without it.

Related: The Importance of Intellectual Honesty

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).

References:

  1. Schleier, Curt, William Blackie Put Caterpillar on An Upward (Investor’s Business Daily) February 2, 2002
  2. Success Secrets of Memphis’ Most Prolific Entrepreneur (Business Perspectives) July 1, 1997
  3. Nocera, Joseph, Confessions of a Corporate Killer (Fortune Magazine) September 30, 1996
  4. Kwoh, Leslie, Business Historian Richard Tedlow Discusses Dealing with Denial (The Star-Ledger) January 28, 2010

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

Credibility is Deeply Rooted in a Leader’s Character

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Herb Kelleher, Founder & Former CEO of Southwest Airlines

During the course of my research of 160 famous American leaders, spanning 235 years, I observed that legitimacy is the foundation of leadership.

If that is true, then credibility is the pivotal point of it. Everything revolves around the leader’s credibility. It is the most important aspect of leadership, yet in most leadership books, 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 substantiates that this is not always the case. Research clearly illustrates that the great leaders understood the critical importance of credibility in their lives, and took the necessary actions to protect and strengthen it.

A typical leadership development program teaches individuals about the necessity to establish a vision, communicate effectively, build strong teams, empower employees, etc. Anyone exposed to these programs is familiar with these principles. Yet, without credibility, none of the above actions can be effectively undertaken.

The lack of a leader’s credibility undermines all their key actions and activities, fostering distrust and a void in confidence.

To fully understand what credibility means, one must explore the specific factors that contribute to the establishment of it within other people’s minds. Each factor needs to work toward fostering trust, confidence and believability.

Credibility is deeply rooted in the leader’s character. Jon Huntsman in his book, Winners Never Cheat Even in Difficult Times (Wharton School Publishing, Upper Saddle River, New Jersey, 2008) stated,

“Character is most determined by integrity and courage. Your reputation is how others perceive you. Character is how you act when no one is watching. These traits, or lack thereof, are the foundation of life’s moral decisions. Once dishonesty is introduced, distrust becomes the hallmark of future dealings or associations.”

This destroys a leader’s credibility and undermines the fragile bonds of trust formed with investors, customers, employees and other critical stakeholders.

Credibility is firmly grounded in a leader’s intellectual honesty. It is impaired if one fails to display intellectual honesty on multiple levels, and to face reality and deal with problems as they arise.
According to Huntsman,

“Many leaders only want to hear the positive… Those who never want to hear bad news don’t want to know when they are off course.”

Intellectual dishonesty breeds both cynicism and disbelief with all concerned, and undermines accountability with all key constituencies. This effectively destroys the levels of trust and confidence leaders require to be effective.

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).

The Importance of Intellectual Honesty

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Lou Gerstner - IBM

Before leaders can assess risks they must be intellectually honest to completely comprehend the reality surrounding their circumstances. A noteworthy illustration of the practice of intellectual honesty is Lou Gerstner (IBM), who was appointed to turn around the floundering company. “He spent his first few months visiting all of IBM’s facilities all over the world taking the opportunity to explain to his concerned employees that his intention was to help the company recover, while at the same time preparing them for forthcoming tough decisions. He also spoke to customers, competitors, consultants, and analysts. Gerstner came to several conclusions:

  • Customers wanted to be provided with solutions to their problems not sold hardware.
  • Computer networking had the potential to transform the way people worked and required different hardware and software to that which IBM was producing.
  • IBM’s products were not the best in the market.
  • The existing plans to split the company were inappropriate because the company could gain many advantages through better integrating what it did.
  • Cost cutting was essential and, despite a reduction of 20 per cent in the workforce over the last six years, more employees would have to go.” [1]

Before Gerstner could transform IBM, he had to face a foreboding sense of reality. The five conclusions he arrived at provided a sobering picture of the reality of what IBM was facing. Without being intellectually honest about what he was dealing with, Gerstner would not have been able to succeed to the degree he did at IBM.

John D. Rockefeller (Standard Oil) also exhibited a high degree of intellectual honesty. Rockefeller’s greatest gift… was the ability to keep a clear head. Hope never skewed his calculations. ‘Look ahead,’ he advises. ‘… 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.’[2]

David Packard (Hewlett-Packard) exhibited a similar characteristic. “Even though Packard is… remembered as a gruff, straightforward man who wasn’t afraid to point out what was wrong and suggest improvements. 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.” [3]

Jack Welch (General Electric) made the following observations concerning investment opportunities, which are risks, since the outcomes are never known and can be difficult to accurately predict. He noted, “The facts are, not all investment opportunities are created equal. But some leaders can’t face that reality, and so they sprinkle their resources like cheese on a pizza, a little bit everywhere. As a result, promising growth opportunities too often don’t get the outsized infusions of cash and people they need. If they did, someone might get offended during the resource allocation process. Someone, as in the manager of a weak business or the sponsor of a dubious investment proposal.” [4]

Sam Walton (Wal-Mart) incorporated and institutionalized intellectual honesty into his company. He observed, “From the very start we would get all our managers together once a week and critique ourselves – that was really our buying organization, a bunch of store managers getting together early Saturday morning, maybe in Bentonville, or maybe in some motel room somewhere. We would review what we had bought and see how many dollars we had committed to it. We would plan promotions and plan the items we intended to buy. And it worked so well that over the years, as we grew and built the company, it just became part of our culture. I guess that was the forerunner of our Saturday morning meetings (where company managers get together and review what they’ve seen in the stores that week). When we made a bad mistake – whether it was myself or anybody else – we talked about it, admitted it, tried to figure out how to correct it, and then moved on to the next day’s work.” [5]

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 intellectual honesty of the great American leaders 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


[1]  Johnston Robert, IBM – Creating a Customer-Focused Organization (Warwick Business School, 2007)

[2]  Baida Peter, Rockefeller Remembers (American Heritage Magazine, September/October 1988, Volume 39, Issue 6)

[3]  O’Hanlon Charlene, David Packard: High-Tech Visionary (CRN, November 8, 2000)

[4]  Welch Jack, Bosses Who Get It All Wrong (Business Week, July 23, 2007)

[5]  Sam Walton in His Own Words (Fortune Magazine, June 29, 1992; from: “From Sam Walton: Made in America” by Sam Walton and John Huey)

Written by Timothy F. Bednarz, Ph.D.

November 22, 2011 at 9:33 am

Research Executive Summary – What Makes Leaders Great

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The following executive summary details the findings of my extensive research of 160 great and influential leaders, spanning 235 years.

The premise of my research is that in order to understand what defines effective leadership, one must study the actions and behaviors of the great leaders. If one examines this premise, then several questions become readily obvious:

  • How did some individuals earn the mantle of greatness?
  • What defines them as great, and what were they able to achieve that others did not?
  • What lessons can be learned and applied from the examples they provide?

My research and analysis aims to answer these questions, and specifically defines and focuses on the key reasons why specific individuals are considered great leaders, including:

  • They acquired legitimacy by establishing trust, credibility, respect and emotional bonds and standing with all of their key constituencies.
  • They were selfless, placing the needs of others before themselves.
  • They epitomized courage, competence and candor.
  • They consistently reflected their personal values of humility, empathy and humanity.
  • A prolonged period of adversity, disappointment, discouragement and failure early in their careers, defined their character, shaped their vision and values, refined their critical thinking and established their legitimacy as a leader.
  • They were able to identify and take advantage of major economic shifts to fuel the growth of their company into a dominant market leader.
  • They acquired the right skills and abilities to take advantage of the opportunities presented to them.
  • They were master architects and builders, immersing themselves in the details of their business.
  • They were practitioners of ruthless efficiency, improving the customer’s experience while driving down costs and increasing profit through market growth.
  • They exhibited the talent to execute and get things done, while acquiring a passion and zeal for the execution of their plans and strategies.
  • They exhibited proficiency as consummate masters of marketing and building emotional connections to their brands.
  • Many created a demand for their products and a market where none existed before.
  • They built high performing organizations by focusing on attracting the right people to their companies, and utilizing their individual strengths by placing them in the right jobs.
  • They exhibited the intellectual honesty to completely comprehend the reality surrounding their circumstances, employing a factual approach to decision-making, objectivity and open-mindedness.
  • They generated enduring organizational values that mirrored their personal attitudes, values, thinking and work ethics.
  • They generated stellar and balanced financial performance due to a long-term, strategic perspective, rather than through focusing on short-term profitability and shareholder-value.

SPECIFIC FINDINGS

Vision

The great leaders created strong, simple and deep visions that defined their purpose, shaped their thinking, and influenced their decisions.

  • They defined their major purpose in life, and staked their existence on achieving it.
  • They cultivated a strong, enduring and lifelong vision of where they wanted to go and what they wished to achieve.
  • They kept their eye on the ball through a sustained long-term focus.
  • They generated a mission focus, clearly specifying what they wanted to achieve.
  • They effectively prioritized to keep their organizations focused on what was important for accomplishing their vision and mission.

Values

The great leaders generated enduring organizational values that mirrored their personal attitudes, values, thinking and work ethics.

  • They acquired a deep sense of integrity and courage of their personal convictions.
  • They exhibited a strong moral compass, guided by deeply held religious values.
  • They developed and relied on a strong internal compass, incorporating it into their beliefs, guiding principles and core values.
  • They displayed unwavering principles and uncompromising ethical standards.
  • They possessed a deep personal sense of responsibility toward others.
  • They assumed a universal servant mentality, which was derived from personal empathy and humility.

Crucible

The great leaders experienced a prolonged period of adversity, disappointment, discouragement and failure early in their careers, which ultimately defined their character, refined their critical thinking and established their legitimacy as a leader.

Emerging Markets

The great leaders identified emerging market opportunities and trends that offered tremendous advantages.

  • They became market leaders in emerging markets.
  • They experienced tremendous levels of growth, fueled by dramatic expansions in their external markets.
  • The tremendous levels of growth allowed them to dominate their markets and industries.

Business Creation

The great leaders capitalized upon the opportunities presented to them.

  • They utilized the process of business creation and development to build a sound foundation for generating sustained profitability.
  •  They exhibited high degrees of confidence in themselves, and in their own ideas.
  • They boasted a strong sense of intuition, supported by wisdom and common sense.
  • They acquired accurate and circumspective thinking skills.
  • They persisted, refused to quit or accept defeat, fueled by their determination and resolve.

Capabilities

The great leaders acquired the right skills and abilities to take advantage of the opportunities presented to them.

  • They exemplified visionary thinking, anticipating the future with an acute sense of clairvoyance.
  • They embraced change to capitalize on new and emerging markets.
  • They perceived failure as a learning experience rather than as a defining event.
  • They used their failures to channel their thinking into a more fruitful direction.
  • They viewed mistakes and failure as an acceptable part of innovation.

Attention to Details

The great leaders conscientiously focused and immersed themselves in details.

  • They investigated new possibilities as imaginative, curious and investigative thinkers.
  • They employed thorough and adequate preparation.
  • They personally prepared themselves through in-depth study and analysis.
  • They accumulated a mastery of knowledge and expertise as life-long learners.

Intellectual Honesty

The great leaders carefully calculated the gains and consequences of their decisions so as not to place themselves or their companies in jeopardy.

  • They exhibited a sense of intellectual honesty for completely comprehending the reality surrounding their circumstances.
  • They employed a factual approach to decision-making, being objective and open-minded.
  • They permitted their actions and decisions to be challenged, while also challenging others’ thinking, perspectives and points of view.

Architects of Growth

The great leaders were architects and builders of growth.

  • They created detailed blueprints.
  • They forged building blocks of growth.
  • They fostered growth.
  • They built and grew their companies.

Ruthless Efficiency

The great leaders effectively practiced the concept of “ruthless efficiency.”

  • They improved the quality of their product.
  • They improved their customer experiences by building products faster and cheaper.
  • They did everything possible to drive down all associated costs.
  • They built and sustained profitability by increasing sales volumes.

Execution

The great leaders were masters of execution.

  • They acquired a passion and zeal for execution of their plans and strategies.
  • They exhibited the talent to execute and get things done.
  • They kept their finger on the pulse of their business.
  • They effectively linked structure to their actions.
  • They manifested a depth of personal commitment to execution.

Right People

The great leaders built high-performing organizations by focusing on attracting the right people to their companies, and utilizing their strengths by placing them in the right jobs.

  • They respected their employees as being valuable assets.
  • They recognized that their companies were comprised of people and not faceless assets.
  • They harnessed the organizational power of their people.
  • They empowered, motivated and inspired their employees through delegation and team building, and creating a supportive environment.
  • They exhibited the ability to effectively communicate sweeping strategies.

Marketing

The great leaders exhibited proficiency as consummate masters of marketing.

  • They built emotional connections to their brands.
  • They created a demand for product and a market for their products where none existed before.
  • They established the infrastructure to support innovation.

Organizational Reputation

The great leaders produced a strong organizational reputation that became a projection of their attitudes, values, decisions and actions.

Financial Performance

The great leaders generated stellar and balanced financial performance due to a long-term perspective, rather than by focusing on short-term profitability and shareholder-value.

  • They concentrated on their customers, not on creating wealth and developing shareholder value, considering both of these to be outcomes, not a primary driving force.
  • They leveraged resources to drive down costs.
  • They maintained a strategic focus on long-term growth to sustain their business.
  • They simplified their organization’s business process.
  • They acquired the operational savvy to deliver on quality financial goals.
  • They viewed value creation as a measurement tool, consistent with their vision and values.
  • They perceived wealth creation as a consequence of their strong vision and subsequent focus.

SUMMARY

The findings of my research substantiates that effective leadership does matter. Great leaders have a strong enduring influence and impact upon the performance of their companies. Unless their vision, values and practices are continued by their successors, the performance of their organization vastly diminishes after their retirement or departure.

Adapted from 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 how the great American leaders built great companies 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

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