August 30, 2011

The Common Traits of Leaders

Mary MahoneyBY Mary Mahoney

J. Robinson Group Blog

If only we could distill the essence of great leadership, bottle it and inoculate our elected officials and captains of industry with it. What a difference that would make in our world and our lives.

Failing that, we must go through a process of elimination to identify the best leaders, discounting candidates who fall short on the key personality traits we believe they need to do the job. What are those traits?

Warren Buffett, the chief executive officer of Berkshire Hathaway Inc. who has become a legend in his own lifetime – “the Oracle of Omaha” — for his investment acumen, often is put on a pedestal as a business leader.

“Buffett may be the most trusted leader in the corporate world today,” said Todd Thomas, in an article for The Street entitled Why We Trust Warren Buffett: Leadership Matters. Thomas singles out three of Buffett’s traits: transparency, consistency and integrity.

“When asked why he invests the way he does, Buffett is not shy in explaining his thinking, even if it is contrary to the public view,” Thomas said, speaking of the Oracle’s commitment to transparency. “When he screws up, he says so.”

On consistency, Thomas notes: “Buffett doesn’t chase after the latest and greatest but uses a consistent formula for making his decisions.”  About Buffett’s integrity, Thomas simply says, “He does what he says he is going to do.”

The news media is not shy about assessing the leadership characteristics of politicians or business executives.  For example, the Phoenix Business Journal this summer published a roster of 25
Most Admired CEOs
at local companies and ascribed seven traits it said are common to each: longevity, loyalty, work ethic, corporate citizenship, vision, humility, risk-taking.

College professors also get into the act.  In The Leadership Challenge, authors James Kouzes and Barry Posner of the the Leavey School of Business and Administration at Santa Clara University
in California, compiled a “top 20” list of characteristics that followers most admire in leaders (ranked in order of importance):

Honest, competent, forward-looking, inspiring, intelligent, fair-minded, broad-minded, straightforward, imaginative, dependable, supportive, courageous, caring, cooperative, mature, ambitious, determined, self-controlled, loyal and independent.

(You would be forgiven if you confused these characteristics with the Boy Scout Law. And you might wonder whether successful CEOs like John D. Rockefeller, Steve Jobs and Al “Chainsaw” Dunlap would make the grade, especially those known for uncontrollable tempers, obsessive micromanagement and psychopathic tendencies.)

Even the U.S. Army Field Manual sets forth personal attributes and core competencies in its Leadership Requirements Model.  Attributes include empathy, warrior ethos, military bearing and innovation.

Clearly there is a desire on the part of business, news media and the military to distill the essence of leadership.  Business wants criteria upon which to identify and hire senior leaders. The news media wants objective criteria in order to make judgments. The military wants to imbue leadership qualities in its prospective officers.

Just when a formula for success seems within reach, leave it to the late Peter Drucker, the “father of modern management,” to throw a monkey wrench into the process. He contended there is no such thing as “leadership qualities” or a “leadership personality.”

Franklin D. Roosevelt, Winston Churchill, George Marshall, Dwight Eisenhower, Bernard Montgomery and Douglas MacArthur, were all highly effective — and highly visible — leaders during World War II,” Drucker said in a 1988 article in the Wall Street Journal.  “No two of them shared any ‘personality traits’ or any ‘qualities.’”

First, he said, leaders are people who work hard and can define and establish an organizational mission clearly and visibly. Second, good leaders consider their positions as a responsibility and never blame others when things go wrong. The final requirement of effective leadership is to earn the trust of people in the organization.

Shelley Kirkpatrick and Edwin Locke of the University of Maryland strike a compromise between Drucker’s school of thought and those who invest heavily in leadership traits.  In their 1991 article, Leadership: Do Traits Matter?, the professors conclude that while traits alone do not guarantee the ability to lead, certain characteristics help leaders acquire the necessary skills.

“Leaders do not have to be great men or women by being intellectual geniuses or omniscient prophets to succeed, but they do need to have the right stuff, and this stuff is not equally present in all people.

“Key leader traits include: drive (a broad term that includes achievement, motivation, ambition, energy, tenacity, and initiative); leadership motivation (the desire to lead but not to seek power as an end in itself); honesty and integrity; self-confidence (which is associated with emotional stability); cognitive ability; and knowledge of the business.”

Their contention is supported by Ronald Riggio in a Psychology Today article entitled Leaders: Born or Made?  Research, he said, shows that leadership is “one-third born and two-thirds made.”

“To expect that a person would be born with all of the tools needed to lead just doesn’t make sense based on what we know about the complexity of social groups and processes,” Riggio said,  adding that research suggests the following personal traits are advantageous for leaders: extraversion, assertiveness, risk-taking, empathy and an understanding of social situations and processes.

A University of Cincinnati ROTC primer entitled Leadership Traits and Behaviors, mirrors my conclusion on the subject:  “While sociologists, psychologists, strategists, historians, and business analysts have made significant progress in learning about leadership, there remains no single universally accepted formula for creating a great leader.”

All the more reason to explore the topic at greater length in upcoming blogs!

August 25, 2011

A Tribute to Steve Jobs

Mary MahoneyBY Mary Mahoney

J. Robinson Group Blog

Any discussion of business leadership must pay tribute to Steven P. Jobs, the iconic founder and chairman of Apple Inc.  Jobs, who has battled cancer for the last eight years, announced his resignation as Apple’s chief executive officer this week, saying he no longer can fulfill his responsibilities, presumably due to his deteriorating health.

Jobs won international accolades as a visionary leader who made technology understandable and accessible to the general public.  He is credited with returning to save the company after it nearly slid into oblivion under John Scully, the former PepsiCo president who served as Apple CEO after the company’s board ousted Jobs in 1985.

“His personality made Apple Apple,” said David Pogue, the popular New York Times technology columnist. “That’s why no other company has ever been able to duplicate Apple’s success.

“Even when Microsoft or Google or Hewlett-Packard tried to mimic Apple’s every move, run its designs through the corporate copying machine, they never succeeded. And that’s because they
never had such a single, razor-focused, deeply opinionated, micromanaging, uncompromising, charismatic, persuasive, mind-blowingly visionary leader.”

Jobs is the antithesis of a process-driven, consensus-seeking, research-focused CEO.  “The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking,” said, Alan Deutschman, author of The Second Coming of Steve Jobs.

In comments to the New York Times, Deutschman said, “Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn’t market-test anything. It’s all his own judgment and perfectionism and gut.”

Jena McGregor, a Washington Post columnist, put it this way: “In a world of number-crunchers and managers, operators and sales men, the business world is woefully short on visionaries and pioneers.

“Current leadership thinking applauds flat hierarchies, egalitarian cultures, and consensus decision-making. In most large corporations today, being a good “leader” means little more than turning in good numbers, motivating staff to perform well, and successfully implementing an often safe strategy that’s gotten Wall Street’s stamp of approval.

“Steve Jobs is not known for most of these things,” she said.  Instead, he “ignored the safe, short-term thinking that guides many CEOs and satisfies Wall Street (for now) in favor of long-term, pioneering vision about product design, consumer tastes and industry disruption.”

Margaret Heffernan, who writes the Serial CEO column for Bnet.com, believes Jobs’ leadership abilities cannot be attributed solely to his idiosyncratic personality: “What Jobs has had, par excellence, has been something less romantic but extremely rare: strategic coherence.

“One of Jobs’ many strengths has been his profound understanding of, and sensitivity to, externalities. When Apple roared back to market dominance and outstanding profitability in 2005, it wasn’t just because iPods were cool. It was because, at the beginning of the century, Jobs had put in place a product plan aimed at one great external future event: the moment that broadband penetration in the U.S. exceeded 50%. Once that occurred, digital entertainment became technically and commercially feasible.”

BusinessWeek magazine concurred in its 2006 cover story, Steve Jobs’ Magic Kingdom: “So what is Jobs’ secret? There are many, but it starts with focus and a near-religious faith in his strategy. Time and again since, Apple has eschewed calls to boost market share by making lower-end products or expanding into adjacent markets where the company wouldn’t be the leader.”

The article quoted Jobs as saying, “I’m as proud of what we don’t do as I am of what we do.”

Jay Eliot, who served Apple as a senior vice president and later wrote The Steve Jobs Way, Leadership for a New Generation, said Jobs succeeded by following his passions: “He understands the mindset of the people he wants to create products for because he is one of them. And because he thinks like his future customers, he knows he has seen the future.”

You can be sure that legions of analysts will continue to study the Steve Jobs era at Apple in an attempt to distill the essence of his genius and methodology.  His style will continue to be contrasted against the modern ideal of a corporate executive.

McGregor sums up Jobs’ legacy in a way that should give all of us pause when evaluating the attributes of leadership: “What’s sad is that there are too few leaders in his mold — true pioneers, passionate innovators, risk-taking taste makers — in today’s business world.”

August 8, 2011

The Importance of Leadership

Mary MahoneyBY Mary Mahoney

J. Robinson Group Blog

Not everyone is a natural leader. But strong leadership skills are essential to making a difference at your company, both with your employees as well as with your customers.

The great business leaders, at companies large and small, often are trailblazers who take the helm with fresh and innovative ideas. Their experience and adaptability bring a new dimension to their role.  They are the force behind their organizations.

Who is a leader? It’s someone you trust; someone who is knowledgeable, but not all-knowing; someone who speaks with purpose, but also listens well; and someone who sets an example by staying true to a established values, personal or corporate.

Leadership is an absolute requirement for any business to succeed. Conversely, a lack of leadership can be devastating.

“Without leadership, organizations move too slowly, stagnate and lose their way.” said D. Quinn Mills, Harvard University professor of business emeritus, in Leadership: How to Lead, How to Live.

Mills believes leadership is more important than process alone. “Much of the literature about organizations stresses decision-making and implies that if decision-making is timely, complete, and correct, then things will go well,” he said. “Yet a decision by itself changes nothing,”

There’s no underestimating the importance of effective leadership, as exemplified by the following executives.

Consider the humble but effective ways of Jim Sinegal, cofounder and chief executive officer of Costco, the largest U.S. wholesale club store. He’s radically different from the egocentric, insular tyrants who pander to Wall Street at the expense of their customers and employees.

To the contrary, Sinegal is “a man of the people” who visits up to six stores every day, answers his own phone, works in a plain workspace and wears a name tag that reads “Jim.”  Explaining his philosophy, he said, “We have said from the very beginning we’re going to be a company that’s on a first-name basis with everyone.”

This is a man who built a successful company by earning the loyalty of 45 million shoppers who happily pay an annual membership fee for the privilege of gaining access to Costco’s carefully selected inventory of high-quality merchandise and services.

He also has earned the loyalty of Costco’s employees. “It’s a good place to work; they take care of us,” said one worker, interviewed by the ABC News program 20/20.  Costco has the lowest employee turnover rate in the retail industry: five times lower than its principal rival, Walmart.

The son of a Pittsburgh steelworker, Sinegal began in the warehouse business, loading mattresses. His working-class values are ingrained in Costco’s corporate culture.

“Our code of ethics says we have to obey the law,” Sinegal said.  “We have to take care of our customers, take care of our people. And if we do those things, we think that we’ll reward our shareholders.”

And then there’s Glenn Kelman, CEO of the online real estate brokerage firm Redfin, which claims to be the first online brokerage for buying and selling homes.

Kelman’s mission — and that of his company — is to reform the real estate brokerage business by making transactions more transparent and less costly for consumers.  He famously was quoted on the CBS program 60 Minutes as saying “real estate, by far, is the most screwed up industry in America.”

Redfin believes the traditional system, in which brokers charge home buyers and sellers each 3 percent of the transaction cost, creates a conflict of interest for agents, who are motivated to represent both sides of a home sale by steering buyers only to homes being sold by their own clients.

So, instead of commissions, the company pays its agents a salary and bonuses for delivering great customer service.  It also rebates up to half of the standard 3 percent transaction commission to home buyers and sellers.

“Our business model was designed to change the real estate game in consumer’s favor, which gives all of us at Redfin a sense of mission,” Kelman said in an interview with blogger Jon Silvers. “Sales commissions significantly reduce capital risk, but paying agents to do the right thing has been the only way we have been able to deliver world-class customer service.”

Not surprisingly, some traditional brokers feel threatened by Redfin. Some refuse to sell homes to buyers represented by Redfin agents.  Others have launched a public relations attacks against the company and vilified Kelman.  In response, he tirelessly makes his case to the public through personal appearances and by writing entries in his company’s blog.

Kelman sets forth his reformist agenda in a blog post entitled If I Can Change, and You Can Change, Everybody Can Change!   In it he lists eight “ideas” including replacing brokers’ sales mentality with a commitment to delivering excellent customer service.

It only takes a crisis to demonstrate the critical value of leadership.  After three Starbucks Coffee Co. employees brutally were murdered during a robbery attempt July 6, 1997, in Washington, D.C., Howard Schultz, Starbucks chairman and chief executive, broke off a vacation, chartered a jet and flew directly to the city.

He immediately met with employees from the store and stayed in the city for days,  personally managing his company’s response to the crisis. The slayings were the first for the Seattle-based chain, which then had more than 1,200 locations around the world.

As recounted in Stephen Covey’s book, The Speed of Trust, Schultz worked with police, consoled the victims’ families and attended the funerals.  He subsequently announced that all future profits from the store would be donated to organizations working for victims’ rights and violence prevention.

“By demonstrating such deep caring and concern for these three employees and their families, Howard Schultz demonstrated care and concern for the thousands of Starbucks employees and their families,” Covey wrote.  “And they felt it.  There was no doubt in anybody’s mind that he cared.”

While each of these executives offer different leadership approaches, they share common characteristics.  I’ll explore the common traits of great leaders in my next blog. Then I’ll look at steps business owners can take to improve their leadership skills.  Finally, I’ll look at the role of communication in effective leadership.

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