Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

Posts Tagged ‘leadership traits

Legitimacy: The Sole Basis of Leadership

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

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

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

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

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

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

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

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

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

Related: Have You Earned Permission to Lead?

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

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

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

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

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

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

Huntsman stated:

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

Related: Your Commitment to Others Defines You as a Leader

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

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

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

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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

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

The Dynamic Nature of Credibility

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Ross Perot

When leaders are selected to lead, a reservoir of trust, confidence and credibility is automatically established, similar to an opening balance when one creates a bank account. The factors that contribute to this include:

Expectations

Prior to their selection of a leader, boards of directors or selection committees will establish a series of expectations that will be used during the evaluation process to filter the appropriate candidates and select the one who is determined to be the best.

Therefore, leaders are selected to meet the expectations of the board and investors and to fulfill specific goals and objectives. At the CEO level, these may include such things as producing growth, entering into new markets and increasing profitability, etc.

Related: Six Ways to Enhance Your Personal Credibility

Credibility

Leaders will normally undergo a selection process that establishes their initial level of credibility. The evaluation process will review the following:

Personal Credibility

Assesses individual reputation and trustworthiness.

Professional Credibility

Assesses the individual’s abilities, skills and capabilities to perform the job and to meet expectations.

Competence

Assesses the individual’s competence and evaluates past performance.

Outcomes and Results

Assesses the track record and the professional accomplishments of the individual.

If individuals are promoted from within an organization, they will have an established base of credibility in these four areas that are readily verified. They also may have established it with one or more of the company’s key constituencies.

This will vary by the previous exposure individuals may have had with these groups. Otherwise, credibility is established through the selection process including interviews, performance reviews and reference checks.

Related: Six Ways to Enhance Your Personal Credibility

Confidence

Initial levels of confidence are rooted in the beliefs of the board or selection committee that the individual possesses the capabilities and experience to meet their expectations. The authority granted to leaders is affirmed by these three factors.

At this point, the only basis of their legitimacy is the authority conferred upon them. They may have initial levels of validity, based upon reputation and past performance, but to the core constituencies, the leader must verify that validity in their minds.

After the selection process, their levels of validity, confidence and credibility will either rise or fall. This is based upon the same four factors used by a selection committee, including:

  • Personal Credibility
  • Professional Credibility
  • Competence
  • Outcomes and Results

Unlike the selection process, the key constituencies will continually use these criteria to gauge leaders’ performance as long as their tenure continues in the company. The research demonstrates that positive performance in each of these areas will generate specific levels of trust, confidence and loyalty, which enable leaders to establish emotional connections and standing with them.

Analysis of the great leaders validates that credibility is not static. Levels rose and fell as circumstances changed. This doesn’t mean the leaders were not credible or couldn’t be trusted. It revealed that only degrees of confidence varied with key constituencies at any single point in time.

The research illustrated that the emotional bonds and standing established by leaders appeared to carry more weight over the long term. This allowed them to maintain their credibility during difficult periods. When these occurred, their constituencies were willing to give them the benefit of the doubt. This validates the clear correlation between credibility and emotional support when it is most needed. As was previously noted, elevated and sustained levels of credibility generate strong bonds of loyalty.

Conversely, the research showed that key constituencies often abandon leaders with poor or diminishing levels of credibility. Major missteps or unethical actions and inept decision-making erode credibility to the point where some leaders never recover. This is exemplified by traumatic events such as restructurings, major layoffs, organizational chaos, or strikes.

In some cases a leader’s validity and legitimacy may be completely lost. Carly Fiorina (Hewlett Packard) experienced this after her failed attempts to radically change her company’s culture. In her case, she had developed problems within all four categories. This resulted in the loss of emotional standing with all her key constituencies. It destroyed her validity to lead. In the end, we all heard of the widely publicized loss of her position as CEO of Hewlett Packard.

Many corporate leaders fail to understand the holistic impact their actions and decisions have upon personal credibility and levels of trust with key constituencies. They also often fail to understand the synergy and bonds of emotional connection and standing within these groups, and the importance to keep them in balance. As previously mentioned, any imbalance will generate additional credibility problems and trust-related issues.

Ross Perot achieved high levels of credibility with the public when he staged a daring rescue of his employees from Iran, during the Islamic Revolution in 1979. It was further enhanced when he ran for President in 1992. He had a number of nationally televised events, where he presented his solutions for solving the nation’s problems.

However, on the night of the election, he quickly destroyed his credibility by making light of his efforts, leaving many who voted for him feeling betrayed. While much of the public initially viewed him as a credible leader, he failed to show his concern and appreciation after the election. This caused many of his supporters to feel used, leaving them disenchanted. After this episode, he never again achieved the levels of prominence in the minds of his supporters he once had.

Related: “Leaders Should Set a Clear and Decisive Tone at the Top”

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

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

Leaders focus on enhancing the customer’s ‘experience’

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Across the broad spectrum of products, services and industries, and the span of over 200 years, the great leaders shared a mutual focus to greatly enhance their customer’s “experience.” This incorporated the concept of “ruthless efficiency” to drive down costs, improve quality and increase efficiencies through innovation and continuous improvement. This resulted in better products at lower costs. This generated their record of growth and success through the practice of overwhelming and eliminating their competition, who couldn’t match their performance.

Edward Harriman (Union Pacific) illustrated this attitude.

“Walking some Southern Pacific track one day with one of his finest officers, Julius Kruttschnitt, Harriman’s restless eye seized on one of the bolts holding a rail in place. ‘Why does so much of that bolt protrude beyond the nut?’ he asked abruptly.

‘It is the size that is generally used,’ replied Kruttschnitt.

‘Why should we use a bolt of such a length that a part of it is useless?’ persisted Harriman.

‘Well,’ admitted Kruttschnitt, ‘When you come right down to it, there is no reason.’

After walking a bit farther, Harriman stopped suddenly and asked, ‘How many track bolts are there in a mile of track?’

Kruttschnitt did a quick calculation and ventured a figure. ‘Well,’ snapped Harriman, ‘in the Union Pacific and Southern Pacific we have about eighteen thousand miles of track and there must be some fifty million bolts in our system. If you can cut an ounce off from every bolt, you will save fifty million ounces of iron, and that is something worthwhile.

Change your bolt standard.’” [1]

Contrary to today’s focus on shareholder value, the great leaders attributed their success to the maintenance of a fanatical focus on the well being of their customers. The customer is the key constituency and is placed first, even at the expense of the stockholders.

Common sense told them that before profits there needed to be sales. And happy customers generated sales. Any actions that diminished the customer experience would be detrimental to the health of their businesses. Jeff Bezos (Amazon) stated,

“Customers want three things; the best selection, the lowest prices, and the cheapest and most-convenient delivery. At Amazon, all decisions flow from those fundamentals.”

When leaders lose their focus on building their business, and maintain a balance with their constituencies, their professional credibility suffers. Many who attain prominent positions are faced with numerous temptations, which come with the trappings of power. These can become the impetus that destroys their credibility and in certain instances, their careers.

Focusing on the attainment of their personal agenda, including prominence, personal notoriety, and popularity often tops the list of problematic behaviors. Some leaders are enamored with politics and the possibility of political office, while others are consumed with personal interests and activities.

Carly Fiorina (Hewlett-Packard) fell into this trap as she was accused of acting like a rock star during her tenure as CEO. “Some critics said she became caught up in high-level strategy and high-profile marketing events to create buzz (such as appearing on stage at a trade show with pop singer Gwen Stefani a month before her firing), rather than homing in on the nitty-gritty operational issues…” [2]

James Cayne (Bear Stearns) was participating at a championship bridge tournament as his company faced imminent financial collapse in 2007. He was later accused of being more focused on his bridge activities than his company in the critical period leading up to the financial disaster.

“On July 12, chatting with visitors over lunch, Mr. Cayne seemed less interested in discussing the markets than in talking about a breakfast-cereal allergy and his stash of unlabeled Cuban cigars. On another occasion, he told a visitor he pays $140 apiece for the cigars, keeping them in a humidor under his desk. Five days later managers of both funds informed investors their holdings were virtually worthless.” [3]

Undoubtedly, many problematic leaders feel if their companies are performing well, they are free to pursue their own interests. In the case of Carly Fiorina, her personal focus was transparent and she was severely criticized in the press and in the company. This undermined her credibility, which ultimately led to the loss of her validity, and authority to lead. Her actions alienated her constituencies, who ultimately abandoned her when she needed them. She lost her professional credibility.

“CEOs can grow arrogant. They stop listening to trusted advisors and begin to breed negative energy, reflecting that back on the company. ‘Roger Smith became shorthand for a generation of managerial puppetry,’ says Jeffrey Sonnenfeld, president of the Chief Executive Leadership Institute and an associate dean at the Yale School of Management.

To be sure, when highly visible CEOs make bad decisions or fail entirely, their companies suffer as well. ‘Personal actions, such as political decisions, take on more weight,’ says Peter H. Coors (Coors) ‘What we might do personally would have an impact on the company.’” [4]

P.T. Barnum (Barnum & Bailey Circus) offered sound advice, which is just as applicable today as it was then, when he said,

“Engage in one kind of business only, and stick to it faithfully until you succeed… When a man’s undivided attention is centered on one object, his mind will constantly be suggesting improvements of value… There is good sense in the old caution against having too many irons in the fire at once.”

References:

  1. Klein, Maury, The Change Makers (Henry Holt and Company, New York, 2003) p 128-129
  2. Zapler Mike, Analysts: Carly Fiorina Long on Vision, Fell Short on Execution at HP (Oakland Tribune) April 21, 2010
  3. Kelly, Kate, Bear CEO’s Handling of Crisis Raises Issues (The Wall Street Journal) November 1, 2007
  4. Benezra, Karen and Gilbert, Jennifer, The CEO as Brand — Their Names Are Synonymous With Their Companies’ Products — And That Presents A Slew of Unique Challenges (Chief Executive) January 1. 2002

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

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 Ability to Make Bold Strategic Shifts

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Herb Kelleher, Founder and Past CEO – Southwest Airlines

One attribute displayed by the great leaders was their vision and how it correlated with their self-beliefs, determination and conviction. Their vision dramatically contrasts with the commonly used vision statements utilized by most companies today. They weren’t linked to their current economic activities, but were life-long visions that defined who they were and what they wanted to achieve with their lives.

The great leaders were truly visionary and their visions served as a compass and as a source of strength, drive and determination during very difficult times. One prominent example is George Washington, whose personal vision of service to his country, and his acute sense of duty was a driving force that enabled him to endure many failures and disappointments during the American Revolution, and served him until his death.

The strength of Washington’s vision was compelling, and explains his prominence in history. Even among the great leaders, few were comparable.

As contrasted to many contemporary leaders, the great leaders developed influential and resolute visions, which contributed to their professional credibility and high levels of trust and confidence. There is evidence that the strength and belief in their personal visions allowed them to place their failure and adversities into the proper context, and reinforced their persistence to succeed. This strengthened their professional credibility.

Beyond the development of strong life-long visions, the great leaders were able to transition into visionary leadership that affected their creative and strategic thinking. It was said of Steven Bechtel (Bechtel) that he had “the ability to make bold strategic shifts, particularly when a company is doing well, is the hallmark of visionary corporate leadership, and Steve possessed it… He was so far ahead of his own people that sometimes it was hard to understand what he was really thinking about… It took vision. And that vision was 99 percent Steve.”[1]

The strength of many of the great leader’s visions created enduring ones that became deeply embedded in the cultures of their companies. “To a large degree, the measure of George Westinghouse could be found in his vision of ethics, work, and fair play that became embodied in the mission and vision of Westinghouse Electric and his other companies…

With the exceptions of Henry Ford, Steve Jobs, and a handful of others, few company founders have left such a defining mark on corporate culture.” [2]

William Hewlett and David Packard (Hewlett Packard), William McKnight (3M), Andy Grove (Intel) and Jeff Bezos (Amazon), all created corporate cultures that were strongly influenced and shaped by their personal visions.

The correlation of vision with critical thinking and intellectual honesty is illustrated by Fred Smith (FedEx), who commented, “The common trait of people who supposedly have vision is that they spend a lot of time reading and gathering information, and then synthesize it until they come up with an idea.” [3]

The question arises, how does professional credibility correlate with a leader’s vision? Without the bonds of credibility, trust and confidence, leaders will be unable to attract others to follow their vision, no matter how strong it may be.

Herb Kelleher (Southwest Airlines) supports this belief when he stated, “A leader’s vision is only as good as the degree to which it is accepted by the followers. First you need to hire people with the potential to adopt the vision. The vision is an important part of the hiring process.” [4]

Arthur Blank (Home Depot) made similar observations when he said, “You need a leader with a vision who can inspire people, someone who will hire and surround himself or herself with people who are even smarter than he or she is, and then give these people the financial and human resources they need to be successful, and the sense of responsibility that goes with that.” [5]

Conversely, Al Dunlap (Sunbeam) was compelled to offer key managers incentives, such as extravagant salaries and bonuses to execute his plans. He was unable to attract others to follow his vision without bribing them.

Most leadership development programs begin with the concept of vision and its importance. Effective leaders do need to have a vision, but there is a difference between having a vision statement, and being a visionary leader driven by his or her vision. One is tactical. The other is strategic.

References:

  1. History of Family Leadership — Stephen D. Bechtel Sr. (Bechtel Company Website) Accessed March 31, 2010
  2. Skrabec, Jr., Quentin R., George Westinghouse: Gentle Genius (Algora Publishing, New York, 2007) p 222
  3. Federal Express’s Fred Smith (Inc. Magazine) October 1, 1986
  4. Gibson, Jane Whitney, Blackwell Charles W., Flying High with Herb Kelleher: A Profile in Charismatic Leadership (Journal of Leadership Studies) January 22, 1999
  5. An Interview with Arthur M. Blank, Owner and CEO, Atlanta Falcons and Chairman, The Arthur M. Blank Family Foundation (Leaders Magazine)

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)
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Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

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