Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

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Leaders Are Judged By The Actions They Take

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related:

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

References:

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

 

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011) Read a Free Chapter

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

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

 

//

Leaders Are Judged By The Actions They Take

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related:

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

References:

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

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011) Read a Free Chapter

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

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

‘Performance’ is More Than the ‘Bottom Line’

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Charles M. Schwab (1862-1939) was the president of both the Carnegie Steel Corporation and Bethlehem Steel. --- Image by © Bettmann/CORBIS

Charles M. Schwab (1862-1939) was the president of both the Carnegie Steel Corporation and Bethlehem Steel. — Image by © Bettmann/CORBIS

Andrew Carnegie (Carnegie Steel) observed; “Put all your eggs in one basket, and watch that basket,” when he answered the question of how he became so successful, he obviously gave a simple response to a complex question. However, his answer simply places a focus on the entirety of his plans and goals, from one who mastered the art of execution and used it to his competitive advantage.

When individuals are elected to run a corporation, most often the only major thing that is taken into account, is whether or not they have the talent to get things done and to deliver on their commitments. When it comes down to it, nothing else matters.

Peter Drucker in his commentary about Alfred Sloan (General Motors) wrote, “The job of a professional manager is not to like people. It is not to change people. It is to put their strengths to work. And whether one approves of people or of the way they do their work, their performance is the only thing that counts, and indeed is the only thing that the professional manager is permitted to pay attention to. I once said to Sloan that I had rarely seen more different people than the two men who during my study had run the most profitable divisions of GM, Chevrolet and Cadillac. ‘You are quite mistaken,’ he said.‘These two men were very much alike – both performed.’ – But ‘performance’ is more than the ‘bottom line.’ It is also setting an example and being a mentor. And this requires integrity.” [1]

The great leaders were known for their talent to execute well. Henry Kaiser (Kaiser) exemplified this ability when he ramped up production of his Liberty Ships during the Second World War. So did James Burke (Johnson & Johnson), when faced with the Tylenol crisis in the 1980s.

Colin Powell (U.S. Army) observed, “‘The most important assets you have in all of this are the people, and if you don’t put people at the center of your process, you’ll fail. Not profit motives, not size of the organization’s headquarters, but people.’

What differentiates successful companies from unsuccessful companies is rarely the brilliant, secret, take-the-market-by storm grand plan. Indeed, the leaders of today’s great companies are inclined to freely share their plans and business models in books and magazines. Even if they weren’t, today’s fast-moving economy dictates that most organizations’ plans are on their way to obsolescence almost from the moment that they are publicly revealed.

The key to success, therefore, lies in exceptional, innovative, fast execution. Execution lies, in turn, in the capacity of people to quickly capitalize on fleeting opportunities in the marketplace; develop imaginative ideas and creative responses; generate fast, constantly changing action plans; mobilize teams and resources; get the job done swiftly an effectively—and then continue that process with relentless commitment.

That’s what this ‘people’ thing is all about, because it’s people that make all that happen. What effective leaders do is create an environment in which great people can flourish in optimal pursuit of the enterprise’s mission. In describing the famed symphony conductor Leonard Bernstein, one observer noted that ‘what Bernstein achieved—and what great leaders achieve—is a seeming paradox. He convinced his players they were free to innovate and express themselves, while convincing them to accept his vision for the music and to follow his direction.’ That description nicely captures the spirit of the leader role that Powell endorses.” [2]

As has been previously noted, Herb Kelleher (Southwest Airlines), Fred Smith (FedEx), along with numerous other cited examples, all built successful organizations around their employees.

Howard Schultz (Starbucks) knows not only the value of his employees and their contributions, but also knows how to extract the best from them. “Howard asks questions and will challenge you to perform. He’ll push you to go gather the data.

He’ll tell you what he would do to try and solve a problem, but he’s not always going to hand you the answer.” [3]
While at Carnegie Steel, where he supervised all of the plant supervisors for Andrew Carnegie, Charles Schwab rose from laborer to the executive ranks through his uncanny talent to execute.

“Schwab was not an originator, he was a builder of integrated teams. His particular genius was in handling people…” [4] Schwab often recalled a story, which demonstrates his talent to execute. He said,

“I had a mill manager who was finely educated, thoroughly capable and master of every detail of the business. But he seemed unable to inspire his men to do their best.

‘How is it that a man as able as you,’ I asked him one day, ‘cannot make this mill turn out what it should?’

‘I don’t know,’ he replied. ‘I have coaxed the men; I have pushed them, I have sworn at them. I have done everything in my power. Yet they will not produce.’

It was near the end of the day; in a few minutes the night force would come on duty. I turned to a workman who was standing beside one of the red-mouthed furnaces and asked him for a piece of chalk.

‘How many heats has your shift made today?’ I queried.

‘Six,’ he replied.

I chalked a big ‘6’ on the floor, and then passed along without another word. When the night shift came in they saw the ‘6’ and asked about it.

‘The big boss was in here today,’ said the day men. ‘He asked us how many heats we had made, and we told him six. He chalked it down.’

The next morning I passed through the same mill. I saw that the ‘6’ had been rubbed out and a big ‘7’ writteninstead. The night shift had announced itself.

That night I went back. The ‘7’ had been erased, and a ‘10’ swaggered in its place. The day force recognized no superiors.

Thus a fine competition was started, and it went on until this mill, formerly the poorest producer, was turning out more than any other mill in the plant.” [5]

Related:

  1. Do You Have a Zeal to Execute?
  2. Do You Have Faith in Your People?
  3. Do You Have the Fortitude and Resolve to Continue?
  4. Should Profit Be the Only Measure of Success?

References:

  1. Drucker Peter, The Best Book on Management Ever (Fortune Magazine, April 23, 1990)
  2. Harari Oren, Leadership Secrets of Colin Powell (McGraw Hill, New York 2002) p.128
  3. Meyers William, Conscience in a Cup of Coffee (U.S. News, October 31, 2005)
  4. “Steel Titan: The Life of Charles M. Schwab” by Robert Hessen and “The Highest Virtue” by Alan Stang (Freeman, February 1976)
  5. Schwab Charles M., Succeeding with What You Have (Century Company, New York 1917) p. 39-41

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011) Read a Free Chapter

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

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

An Accurate Predictor of Leadership Performance

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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.

– The Legitimacy Principles

The use and application of the Legitimacy Principles are an influential standard of leadership performance. A close examination of the key components comprising the Principles reveals that it incorporates virtually every aspect of effective leadership and management required to be successful in leading a corporation, especially in the dynamic environment of the 21st Century.

Whether utilized by individuals who desire to evaluate their own performance, or companies who wish to evaluate the progress and effectiveness of their individual leaders, the Principles will reveal gaps in performance and weaknesses that need to be addressed.

Boards of directors and investors can apply it to assess the performance of senior management to determine if their strategies are effective in achieving specific goals and objectives. Most strategies manifest the worldview of the leaders who create them.

This is evidenced in case after case, where the great leaders who met the criteria of the Legitimacy Principles generated impressive performance and financial results, such as Herb Kelleher (Southwest Airlines), Kemmons Wilson (Holiday Inn), Arthur Blank (Home Depot), and Andrew Carnegie (Carnegie Steel), just to cite a few.

It was not unusual to see corporate performance diminish after these individuals left their companies and were replaced by those who did not completely meet the criteria of the Legitimacy Principles.

Jim Collins documented his research on exceptional company performance in Good to Great (Harper Business, New York, NY, 2001). Included in my research are also some leaders of the companies he evaluated. In his subsequent book, How the Mighty Fall (Harper Collins, New York, NY 2009) he attempted to explain why some of the original companies he studied no longer excelled.

In each case the key leadership changed, a factor Collins alludes to, but does not conclusively link to reductions in performance. In correlating my research with his I discovered that those placed in new leadership positions no longer appeared to meet the criteria of the Legitimacy Principles.

Consequently their company’s performance faltered. Collins bases his research upon the analysis of financial data, while mine focuses upon specific leadership dimensions. The fact that in selected examples we both arrive at the same conclusions validates the findings of my research even though we approached the problem from two distinct perspectives.

If the Legitimacy Principles disclose a leadership imbalance in senior management, most certainly it will be reflected in their thinking and plans. It will be a reliable predictor for future performance.

Once the concepts behind the Legitimacy Principles are understood, these can be easily applied to evaluate leaders in all walks of life, including politicians seeking election.

It may require changing the constituencies where emotional bonds are formed to suit the position of the leader. Obviously, politicians have a different set of constituencies than would a corporate leader. With that said, all of the criteria still remains applicable. Its utilization will reveal the focus and impetus of the leader being analyzed.

For the individual who doesn’t think the practices of past leaders don’t have any relevance today, the identification of the Legitimacy Principles and their successful application by great leaders spanning 235 years substantiates their validity.

Circumstances may have changed, but the great leaders of years past faced similar problems and obstacles as leaders do today. They needed to deal with rapid change and globalization, albeit in a slower form, but the challenges they faced were no less formidable, and they prevailed. What we can learn from them can definitely help overcome our current leadership crisis.

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

A Leader’s Management Style Sets the Organizational Tone

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Jack Welch – Former CEO – General Electric

The leader’s management style sets the organizational tone. When Jack Welch took control of General Electric, he “wiped out whole layers of management, jettisoned underperforming units, introduced tough performance measures for employees, and junked the venerable “blue books” that for years had told GE managers what to do and how.

Most significant, he redefined the CEO’s central purpose in life. Before, GE had focused on growing revenues, even though a bigger company didn’t necessarily mean a more valuable one, while its CEOs talked about balancing the interests of employees, shareholders, and society as a whole.”[1]

If Welch’s actions didn’t set the tone, no one was paying attention, but indeed they were and his management style affected American businesses for decades.

Like Welch, leaders imprint their companies with their unique management style. While they collectively can be categorized using labels such as autocratic, paternalistic, collaborative as well as other commonly used descriptions, individual leaders craft a style that is a reflection of who they are and how they prefer to manage.

The two most influential leaders who are responsible for shaping modern management styles were Alfred Sloan (General Motors) and Jack Welch (General Electric). Peter Drucker said of Sloan that he was “the designer and architect of management… a foundation for America’s economic leadership in the 40 years following World War II.” Both Sloan and Welch had a significant influence upon the management styles of their contemporaries.

As was cited previously, Welch’s influence began the emphasis on shareholder values that resulted in many leaders focusing on short-term profitability, which has underscored a host of problems with its application over the past two decades. Ken Lay (Enron), Bernie Ebbers (Worldcom), Al Dunlap (Sunbeam) and a host of other leaders have relied on this emphasis for their personal gain, at the cost of long-term corporate financial viability. While they maintained a focus on increasing shareholder value to the cheers of Wall Street, they collectively destroyed their companies.

Therefore a leader’s management style is an important factor in determining his or her professional competence. This is due to its overall impact on all key constituencies and the organization’s financial health and sustainability.

Prior to the introduction of Sloan’s management principles, many of the great leaders tended to be paternalistic, as exemplified by John Heinz (J.J. Heinz), Milton Hershey (Hershey Chocolate) and George Westinghouse (Westinghouse Electric).

These leaders provided fair wages, good working conditions and were socially responsible. They provided a variety of employee benefits, built housing communities and a clean and healthy home and working environment.

Others were autocratic such as J.P Morgan (J.P Morgan), Andrew Carnegie (Carnegie Steel) and Cornelius Vanderbilt (New York Central Railroad). They focused on improving efficiencies, quality and the customer experience, while simultaneously driving down costs and prices.

Many contemporary leaders such as John Chambers (Cisco), Andrew Grove (Intel) and Thomas Engibous (Texas Instrument) have developed more collaborative management styles to harness their organization’s collective power to achieve their goals and objectives.

One facet that differentiated the great leaders was their ability to create and sustain the emotional balance incorporated within the Legitimacy Principles. They established and maintained strong emotional connections with all of their key constituencies. This was true despite the utilization of a variety of unique management styles that they incorporated.

Reference:

  1. Useem, Jerry, Tyrants, Statesmen, and Destroyers (A Brief History of the CEO) (Fortune Magazine) November 18, 2002

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

Leaders Possess a Deeply Embedded Sense of Purpose

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Andrew Carnegie

Many of great leaders included within my research universally started their careers as ambitious individuals. They didn’t limit themselves to simply working to sustain themselves. They knew opportunities would present themselves if they worked hard and remained patient.

They had a deeply embedded sense of purpose. Unlike many other young people, who tended to view entry-level jobs with distain, these individuals took their obligations seriously, and viewed their responsibilities as a way to prove themselves.

Michael Dell (Dell Computers) began washing dishes at the age of twelve. Warren Buffett sold newspapers, as did Curtis Carlson (Carson Companies). Kemmons Wilson (Holiday Inn) began his career selling magazines as a youth.

They always did their best no matter how small the task, were attentive to details, and were diligent in making themselves indispensible to their employers. Their work ethic did not go unnoticed, and they were often rewarded with promotions and additional responsibility.

Andrew Carnegie’s (Carnegie Steel) diligence as a telegraph operator caught the attention of Thomas Scott, Superintendent of the Pennsylvania Railroad, of whom Carnegie became a protégée. This relationship facilitated his growth and presented him with many investment opportunities that became the basis of Carnegie’s wealth.

Concerning a lifelong work ethic, John Jacob Astor stated,

“The man who makes it the habit of his life to go to bed at nine o’clock usually gets rich and is always reliable. Of course, going to bed does not make him rich—I merely mean that such a man will in all probability be up early in the morning and do a big day’s work, so his weary bones put him to bed early. Rogues do their work at night. Honest men work by day. It’s all a matter of habit, and good habits in America make any man rich. Wealth is largely a result of habit.”

The outcome of this work ethic contributed to the development of the Legitimacy Principles in their lives. This was essential to their future success. It would ultimately provide them with the ability to take advantage of future opportunities.

Related: Legitimacy: The Sole Basis of Leadership

Olive Ann Beech (Beech Aircraft) said:

“If you enjoy your work, all you have to do is be capable and take the pitfalls along with the good…”

Without the foundation of the Legitimacy Principles established early in their careers, they would not have been able to summon the support of others that they would require to take advantage of new and emerging opportunities.

Kemmons Wilson (Holiday Inn) often observed,

“Becoming successful was easy. All I did was ask our people to work half a day, I don’t care which, the first half or the second half’’

Another contributing factor to their early success was a devotion to learning outside of the workplace, which allowed them to increase their personal value by mastering new skills and expertise.

Related: You Don’t Choose Your Passions, Your Passions Choose You

These individuals studied everything they could get their hands on to develop personal mastery of a variety of subjects, but they especially focused on the topics that directly related to their work.

  • Carnegie was a prolific reader and used his knowledge to overmatch and outwit his competitors.
  • Henry Ford and Michael Dell acquired knowledge by taking things apart and rebuilding them.
  • Edison and Westinghouse devoured scientific journals for insights and usable ideas.

The evidence clearly supports that the majority of great leaders are lifelong learners. In some cases, such as Ray Kroc (McDonald’s) and Sam Walton (Wal-Mart), both were obsessed with learning and investigating everything they could about their business, markets, competition and customers. They even went so far as to share their knowledge with each other.

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

Professional Credibility Evaluates the Leader’s Professional Abilities

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Steve Jobs – Founder – Apple Computer

Lead by Example. Simply stated, walk the talk. At Home Depot, we never expected our associates to do anything we didn’t do ourselves… You simply can’t ask anyone to do something you won’t do yourself.” – Arthur Blank

Professional credibility is an assessment of the leader’s skills and abilities. Simply put, does the leader possess the tools to do the job?

As leaders face challenges and must overcome pressing problems and issues, it is a question that will continually arise in the minds of all constituencies, and will be viewed through the lens of their individual agendas.

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

An example of this occurred when Steve Jobs (Apple Computer) negotiated a deal with Carly Fiorina (Hewlett Packard) so that Hewlett Packard could manufacture a HP-branded iPod. The deal included a provision that Apple would work with HP to develop transcoding, so the device would be compatible with the Windows Media player.

After the deal was agreed to, Jobs never allowed the transcoding, “but the contract still locked HP out of the MP3 player market until Apple dominated it. Effectively, Steve Jobs “Steve’d,” HP and people there are still pissed. Right or wrong, it worked …” This typifies the behavior of a leader who may have professional credibility and be deficient in personal credibility. [1]

The Jobs’ example illustrates how a leader’s professional credibility might impact a company’s performance and profitability. This includes taking financial risks that may place the company’s sustainability at risk, or as in Job’s case, make it liable to potential lawsuits.

While Jobs achieved a strategic advantage over Hewlett-Packard, and may have been considered extremely clever, by some individuals, it damaged both his and Apple’s credibility.

Other notable examples of leaders who took enormous financial risks include Richard Fuld (Lehman Brothers), Martin Sullivan (AIG), Jimmy Cayne (Bear Sterns), as well as a host of other CEO’s.

Their professional incompetence resulted in causing financial havoc, not only on their companies, but also upon the economy as a whole.

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

Reference:

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

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

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

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

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