Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

Posts Tagged ‘key constituencies

Personal Credibility is Anchored in Character and Integrity

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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

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Emotional Bonds are a Reflection of a Leader’s Effectiveness

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James Burke – Johnson & Johnson

The research conducted for Great! What Makes Leaders Great 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.

Related: Have You Earned Permission to Lead?

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’s list 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.”

Related: If You’re Not Emotionally Committed, You’re Not Going to Have a High Degree of Success

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.

Related: Leadership: The divergent tale of two leaders

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.

Analysis validates that emotional connections tend to begin early and continue throughout the leader’s career as they develop a personal standing with each group of key constituencies. 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.

Many revere the prominence of the great leaders, like Ford, Rockefeller, Morgan, Gates and Buffet, due to their individual reputations and achievements. The research reveals that great leaders are also fallible. They make mistakes and often are subject to criticism, some valid, and some triggered by an opponent’s agenda.

But the analysis of the great leaders demonstrates that if and when they choose to persevere and persist in their efforts, they will ultimately succeed. This is a consequence of the emotional support and emotional standing they took the time to nurture and foster throughout their careers.

Related: Your Commitment to Others Defines You as a Leader

The question is, can leaders be effective without these emotional connections? Analysis illustrates that there are leaders who didn’t make all of the necessary emotional connections. Their effectiveness became diminished by the lack of support on multiple levels.

For instance, profit-centric leaders like Dennis Kozlowski (Tyco International) may have developed strong emotional connections with the stockholders, especially since they delivered the short-term profits being sought after. But, at what price?

Many of these types of leaders do so at the expense of their customers and employees. They reduce quality and dramatically downsize their workforce, only focusing on the bottom line. In the short-term they will likely be successful, but their actions undermine the legitimacy, trust and credibility required to build and manage an enduring, successful corporation.

Ultimately, this results in long-term problems due to the loss of the company’s customer base, along with their most productive employees, both who will vote on this leader’s performance with their feet. These actions place companies in financial jeopardy.

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

New Book Reveals The Most Accurate Gauge of Great Leadership is Legitimacy

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At a time when America is crying out for leadership in all sectors of society, a new book, which researched 160 great and influential American leaders, spanning 235 years revealed that the most accurate gauge of great leadership is legitimacy.

It illustrates that the great leaders acquired legitimacy by establishing trust, credibility, respect and emotional bonds and standing with all of their key constituencies, while delivering stellar financial performance.

The research reveals that when leaders balance the needs of all of their key constituencies, they outperform others, who sole focus on shareholder values. The focus on shareholder values concentrates upon the needs of one key constituency, often at the expense of the others. This destroys a leader’s credibility and often the long-term sustainability of the company.

The researcher and author, Timothy Bednarz, Ph.D. designated this pattern in his book Great! What Makes Leaders Great; What They Did, How They Did It and What You Can Learn From It (Majorium Business Press) as the Legitimacy Principles.

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 produced between these key factors of success is the foundation of effective leadership, and it 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.

It is often assumed that leaders automatically possess legitimacy. Great! substantiates that this is a fallacy. It shows that legitimacy is derived from two separate sources that grant 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 attained once one is appointed. It is earned. It becomes 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. However, 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 a balance of emotional bonds with each key constituency. The findings of the research presented in this book, 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, whether for a corporate executive or a political leader. The Legitimacy Principles are applicable to all forms of leadership.

An executive summary and the key findings published in Great! What Makes Leaders Great; What They Did, How They Did It and What You Can Learn From It can be viewed at http://www.whatmakesleadersgreat.com. The book also can be purchased at this site, or by calling 800-654-4935.

Copyright © 2011 Timothy F. Bednarz, Ph.D. All Rights Reserved

Can You Be Trusted? The Answer May Surprise You

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There is a need to restore sound and ethical leadership. The mantle of leadership must be reestablished. Customers, boards, stakeholders and employees must clamber for it and demand full accountability. This is accomplished one individual at a time, by electing or appointing the ones who possess the vision, integrity, courage, empathy, humility, commitment and confidence needed to transform their organizations. This starts with trust and ethical behavior, and there is a serious problem in both of these areas.

“According to the Deloitte LLP 2010 Ethics & Workplace Survey, the recession has diminished two important forms of business currency—trust and ethics. Nearly half (48%) of employed Americans who plan to look for a new job when the economy is more stable cite a loss of trust in their employer as a result of how business and operational decisions were handled over the last two years as a reason for leaving; 46% of them say a lack of transparent leadership communication will drive them to seek new employment opportunities. Executives also believe that trust (65%) and transparency (48%) will be leading factors in voluntary turnover in the coming months.

Interestingly, the survey shows a disconnect between executives and employers around the issues of trust and ethics in the workplace. Executives claim to be considering the impact of their business decisions on the ethical behavior of the workforce during the economic downturn, however 31% of employees say that their colleagues are more likely to behave unethically at work in this environment.”[1]

Jon Huntsman, CEO of Huntsman Chemical states: “As captains of our own character, it is essential we understand the great legacy of trust and integrity. We will be remembered for truthful disclosures and promises kept.”[2]

Trust has a synergetic relationship with credibility. If either one is missing or diminished, so is the other. Some of the elements that build trust with key constituencies include competence, reliability, courage, conviction, empathy and respect. These elements result in trust in the leader as a person, his or her abilities, and belief in whether whatever he or she does or says is something that can be relied upon. Within the range of these relationships, key constituencies may trust the leader, but not his or her abilities to complete a task or assignment. In other instances, since the leader has no credibility, there is no faith or confidence in anything that he or she does.

[1] The Deloitte LLP 2010 Ethics & Workplace Survey (Deloitte LLP) August, 2010
[2] Jon M. Huntsman, Winners Never Cheat Even in Difficult Times (Wharton School Publishing, 2009) p 93

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

If you would like to learn more about the ethical leadership 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

Written by Timothy F. Bednarz, Ph.D.

June 28, 2011 at 11:44 am

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

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