Leadership
Monday, 7 January 2008
Last Updated: Sunday, 22 June 2008
By Ross Honeywill
The days of the boss as Machiavellian manipulator are over. CEOs in 2007 need to be more in touch with ideology than idolatry. After all, no one’s kneeling anymore.
CEOs who fail to embrace the new rules of leadership will find it harder to attract and retain new talent or to get any kind of loyalty from their board.
It’s a management truism that leadership is critical as a driver of business success. The new news is that leadership must stand for something to become the sustainable fin slicing though the ocean of political or management mediocrity.
The traditional form of leadership was an outer-directed, problem solving boss setting the agenda for the team to follow and adhere to. The new boss is a beast of an entirely different nature.
Standing for something is not only important, it is essential. The late management doyen Peter Drucker said it is more important to do the right things than it is to do things right.
Leaders who know what to stand for, and then take their organisation in that direction, are becoming tomorrow’s business stars. Contrast this with so many of today’s so-called leaders who simply direct others how to do the right things within an existing framework.
The five tests of a leader are:
It’s more important to do the right things than it is to do things right.
Decide what’s essential, what you stand for.
Assign a gender to your organisation.
If you’re not talking, you’re not winning.
Certainty is golden.
It’s more important to do the right things than it is to do things right
So often leadership focuses on what needs to be done to maintain the status quo instead of taking the time to consider if it is the right thing to do .
Take as an example the Onkaparinga Woollen Mills in Lobethal, South Australia. For decades the mills produced some of the best woollen blankets in Australia, renowned for their quality and comfort.
In the mid-1990s however, the woollen mills suffered a fatal business downturn and soon closed.
The managers at the Onkaparinga Woollen Mills knew how to do things right: they made beautiful blankets, they maintained the machinery, they motivated the salesforce to sell more blankets.
But they did not take the time to ask if, in a changing world, making blankets was the right thing to do at all.
The simple answer would have been, no. The mill’s managers failed to see the doona coming over the economic horizon, and the rest, like Onkaparinga Mills, is history.
Decide what’s essential, what you stand for
With so much happening every day, the core task of a leader is not to decide what to do, but rather to decide what’s important to the organisation and the world it operates in.
True leaders have forums where the organisation’s critical thinkers review goals and strategies. Without a decision-making framework however, every contributor expects his or her ideas to carry full weight, regardless of their relevance to the organisational strategy.
This is where leadership cuts in. Establishing what the organisation stands for is an essential part of that leadership.
Consider the charismatic Bono, lead singer of Irish rock band U2.
Bono has dedicated a large part of his life to humanitarian efforts. He works tirelessly to have first world countries cancel the debt of struggling third world nations, to reduce poverty in Africa and to boost the availability of drugs for AIDS treatment.
When Bono teamed up with Bob Geldoff to stage, in July 2005, the Live 8 concerts, coinciding with the G8 conference of the world’s most influential economic countries, it wasn’t just a series of well-planned and well-staged concerts.
It was a spectacular event that stood for something profound and immediate – it stood for the eradication of poverty.
Bono and Geldoff characterise the new leader: influential, focused, doing the right things, standing for something so clear that it communicates a simple message to everyone. And most importantly, it gets things done, makes progress, changes the way the world functions and behaves.
Or take a look at the rise and rise of Al Gore. Having “lost” to George W Bush in 2000, Gore crusades against climate change, and his movie An Inconvenient Truth , has already become the third-highest grossing documentary in American box office history.
Gore may again run for president or he may not. Certainly standing for something has made him more prominent and delivered him more credibility and influence than any other politician on earth. Bono, Geldof and Gore offer powerful messages to corporate leaders.
Assign a gender to your organisation
Much has been written about corporate culture with little or no reference to the gendered nature of an organisation.
Every organisation has distinctive gender characteristics and it is only by understanding them that a leader can truly define or redefine an organisational culture.
In our society, gender assignment happens to every child and that assignment in the vast majority of cases determines how that child grows and behaves in society.
Inspirational leaders understand the importance of organisational gender assignment. Many large organisations exhibit, for example, unmistakably male characteristics.
These are companies that value systems, documented protocols and fixed ways of behaving with limited room for creativity and imagination.
The people, both men and women, who work in such an organisation do so knowing they are protected by regulations and rules, that they are freed from the responsibility of making a decision and of getting it wrong.
Institutional decision-making leaves no room for individual responsibility. The ultimate example of such a male gendered organisation is the armed forces, however similar characteristics are found in many business organisations.
Conversely, female gendered organisations are often smaller and always flexible, creative and free of rules and regulations.
In a female gendered organisation, participants solve problems themselves, make decisions freely, innovate and rely more on inspirational moments than operational limitations.
Each person accepts and values personal responsibility. A good example is a marketing agency where myriad creative, financial and operational decisions are made at every level of the organisation with multi-tasking and job sharing the norm rather than the exception.
These characteristics can also been found in global brands with many of the new consumer electronics and computer companies organising themselves around loose yet effective structures in which personal achievement is lauded and rewarded.
Apple, under Steve Jobs, has developed not only a corporation that values personal success and rewards creativity, it also takes that positioning into the market with its iPod products and marketing that celebrates imagination, design and beauty.
Identifying the gender of an organisation helps leaders lead from the front, to become agents of change and to attract the right people.
If you’re not talking, you’re not winning
Good leaders are good talkers and good listeners. For those building a new business or bringing a new concept to market, there are two simple rules:
Tell a potential client something they don’t already know.
If they’re not talking to you, you’re not winning.
Great leaders know how to bring something new to others and how to make it understandable, desirable and attainable. They also know how to talk about it and how to engage and motivate others – both internally and externally.
Steve Jobs launches every new Apple product himself – and then puts it online for millions of individuals across the globe to see him one-to-one. He talks to the world and in doing so converts personal fascination into commercial results for Apple.
Leaders must talk constantly about the right things to do, about what they stand for, about issues that clarify the gender of their organisation. And they know that if they’re not hearing back from others, they’re not in the race.
Be quietly certain
One outstanding characteristic of leadership is certainty. Early movers are quickly recognised in the ranks by their level of certainty about topics under discussion or review.
This is not to be confused with dogma or force, the first to speak or the loudest voice. Certainty comes from a natural ability to evaluate, decide and express what is important or essential to the discussion. And given the confidence that comes with certainty, is frequently expressed quietly.
Much is made of the need for consensus in discussions of leadership, however the ability to listen and to respond with certainty is more of a signpost to leadership than any amount of effort to get “organisational buy-in”.
Just as there are few true leaders, there are also few who can be certain and right more times than not.
Damian Eales, head of marketing and financial services at David Jones, watched his older brother John lead the Wallabies to victory in the 1999 Rugby World Cup, the 2000 Bledisloe Cup and the Tri Nations Series, and to Australia’s first-ever series win over the British and Irish Lions. One of Australia’s greatest ever sporting leaders, John Eales is nicknamed “nobody” because “nobody’s perfect”.
The younger Eales, still in his early 30s, has played a central role, along with CEO Mark McInnes and CFO Stephen Goddard, in taking David Jones to a position of dominance in the fickle department store sector.
Eales deals fairly and intelligently with his team and external advisers, but always, having heard all sides, demonstrates complete certainty in his responses and decisions.
This is the new leadership democracy where each player has an equal voice, where the final decision by Eales demonstrates the kind of clarity and certainty that instantly dispels any dispute. Certainty is a golden rule of leadership.
Leaders understand the difference between leadership and efficient management. Management focuses on doing things right; leadership is driven by doing the right things.
It’s a simple choice: evolution or extinction.
** Click here to read why Fred Hilmer, former CEO of Fairfax failed the leadership test.
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By Ross Honeywill
There are two types of customers. One group is a bunch of people driven by price, motivated by a deal, unhappy about change, but excited by features and function.
The rest are turned on by the internet, quality, a great experience, design beauty, new challenges, rich information, a social conscience and the path less travelled.
Not surprisingly the first lot are Traditionals and the others are known as belonging to the new economic order (NEOs). This latter group get their economic credentials because they spend more than anyone else and they consume more frequently than anyone else. An economic powerhouse, these four million Australians account for the majority of all discretionary spending.
Managers intuitively understand Traditionals. But these valuable NEOs, covering as they do all demographics, are harder to get a bead on. But given that they are the potential leaders in the workplace and the most valuable consumers in the economy, get a bead on them we must.
Individuality is power
The new economic order trusts other people and small business. They don’t trust media, big business, governments or politicians.
NEOs insist on individuality. They don’t trust large institutions that treat them as part of a large group or market segment, and it is this independence that makes them powerful.
Research in both the US and Australia shows that trust in large institutions is at a record low.
This is a fact of life in a changing world and NEOs are at the forefront of that shift.
You need to consider how important trust is in your business model. If you are in business for Traditionals, trust is less important because they have low confidence that they can influence how you deal with them. If, on the other hand, you are targeting NEOs, the role of trust in your business is an issue.
Organising NEOs, individuals with essentially different views on individual issues such as trust and corporate power, is a little like herding cats … they won’t automatically go where you want them to and certainly not as a group. NEOs draw their strength and influence not from the power of behaving in a bloc, but rather from the millions of small decisions they make for themselves.
Traditionals are much more likely to be patient with large institutions because they accept the institutional ideals and really don’t feel there’s much they can do about it anyway.
Because for decades most businesses have dealt only with Traditionals, they don’t easily grasp the concept of individuality, or for that matter personalisation, either in the way they deal with their employees or in their relationship with customers.
Most businesses still talk in mass marketing terms; the conventional language of targeting customers, selling to consumers, data mining, transactional analytics and customising products for particular markets.
For instance, airlines around the world believed they were entering the new world of customer management by calling their passengers “customers”. This was a tactic that cemented the transactional nature of the relationship between a corporation and those who, in their view, make up the market. But if airlines had recognised they were major players in the world of hospitality rather than in the transport industry, they would have understood the important relationship that exists between host and individual guest.
Take your average call centre. Even with sophisticated software to capture and track calls from a particular customer, they predominantly treat all customers alike. Think about the last time you called an airline, or a bank or telephone company. Chances are that you were automatically lumped in the queue with everyone else. This kind of behaviour is acceptable to Traditionals who are used to being treated as part of a mass market, but it fails to satisfy NEOs’ need to be treated as an individual.
The acid test: did you just grumble and bear it? Then the odds are that you’re a Traditional. Or did you grumble and start making plans to move to a new business that understands you? In which case you’re probably a NEO.
Dos and Don’ts for INDIVIDUALITY
DO revise the wording of all your sales and marketing materials to eliminate any references to global corporate reach and range.
DON’T send customers promotional material that isn’t focused on their individual needs and interests. For example, don’t spend money on promotional pieces that boast good corporate citizenship.
DON’T assume that your current frequent-buyer programs are creating loyalty. Unless your rewards allow individual flexibility, NEOs will dismiss the benefits you offer as inadequate compensation for being “stapled” to your business.
DON’T assume that because NEOs are accepting low personal service levels from you that they are satisfied. If they find a supplier of a similar product or service who really treats them like an individual they will move their business immediately to gain the improved experience.
DO think of your relationship with NEOs as one of hosting individual guests rather than supplying a group of anonymous customers with what you would like to offer.
DO change your sales and service interactions to reduce the perception that a NEO dealing with you is “just a number”. For example, never ask them for their account number unless you can also use their name in the same interaction.
DO prepare a business case for connecting NEOs with call centre personnel who are “just like them” and processes that allow them individual flexibility.
DON’T use scripts in call centres dedicated to NEOs. Discover and solve their problems as if they are friends and design and conduct customer tests for a NEO’s propensity to pay a higher price and a high margin for this level of service.
DO explore internet-only offerings for NEOs. They have a high level of comfort with this form of business relationship.
Cheat sheet
Traditionals are 50% of the population (eight million adults) but account for only 23% of all discretionary spending.
NEOs are 24% of the population (four million adults) but account for 54% of all discretionary spending.
Ross Honeywill ( ross.honeywill@neogroup.net ) is co-founder of the privately funded consumer think-tank, the Centre for Customer Strategy, is an adviser to global brands and is co-author of NEO Power: how the new economic order is changing the way we live work and play (Scribe, Oct 2006).
Louis Coutts blog
Friday, 14 December 2007
The other day I was running a program on leadership for a small group of people identified as having leadership potential. At the commencement of the program I asked the people to have a talk among themselves and come back with a list of issues they would like to be addressed in the seminar.
One group came back with the request that they would like to learn how to be more assertive. Now, that was a pretty interesting question because I had never been asked that question before.
My immediate response was that assertive people tend to put other people off-side. We tend to react badly to people who are constantly asserting themselves without considering the views of others. However, on digging deeper, it became apparent that it was not this type of assertiveness that was of concern to the people in the seminar.
What they were talking about is something that most of us worry about, and it is having the confidence to speak up. How many times are we in a situation when someone asks a question or a subject comes up and we think we know the answer or something about the subject but we don’t say anything for fear of being wrong and making a fool of ourselves?
The question triggered a whole series of complicated issues and out of the discussion came some interesting issues which relate to growth. I told them the story of Captain Scott who, in preparation for his journey to the South Pole the following summer decided to take provisions to 80° south. He had horses to pull the provisions, but when they got to 79° south he decided not to go further because he wanted to save the failing horses for the next summer expedition.
The person responsible for the horses, a Laurence Oates, had huge experience. He said that the horses would not make it back to base and it would be better to take them to 80° and leave the supplies there and then shoot the horses so that their flesh could be used as food for the expedition to the Pole. Captain Scott ignored that advice and Oates was reported to have said: “I believe sir you will live to regret that decision.”
On his return from the Pole the following season, Scott ran out of food and supplies at 80° south, a degree short of the supplies he had placed at 79° the previous summer. He and his team perished one degree short of salvation.
From all of the records, it seems that Oates never again offered advice to Scott. It also seems that after having his advice rejected, Oates did not press the point. One then wonders, “if only Scott had listened to his expert”. Or the other question, “if only Oates had been more forceful in putting his view point”.
There are two sides of the coin of assertiveness. A person is more inclined to put a point of view if he or she believes that a leader or manager will listen to what they have to say and less inclined to put a point of view if they believe they will not be listened to.
Scott was a naval man through and through, and insisted on naval discipline. He had to make the decisions and others had to follow. His expedition ended in disaster.
Growth is dependent on innovation, and innovation is a product of many ideas of which a few will turn out to be good. However, without encouraging people to constantly come up with new and innovative ideas, there will be this reluctance on the part of the people in the organisation to “be assertive”. They will take the view that there is no point in putting their point of view because no one will listen.
As a result they become mechanistic tools to perform operations rather than intelligent beings to participate in the wonderful process of evolutionary development. Evolution is not a progressive process of continual improvement but one of trial and error. Sometimes things work and sometimes they don’t.
So we concluded in our little seminar that for people to be more assertive it is necessary for management to encourage people to have a point of view, and no matter how irrelevant it might be, to speak up and challenge others to either find flaws or to explore possibilities.
If management tends to assume the responsibility for making all the decisions and insists that the troops merely carry out the instructions, innovation will be hard to come by as will growth.
Once management creates the environment in which people have the opportunity to express their opinion, then the troops need to have the courage to do so without worrying whether or not they might be making a fool of themselves. More often than not their ideas will have merit and if they don’t immediately have appeal, it is amazing how good ideas often emerge from ideas that were initially considered stupid.
We decided then that it was worth the time exploring this issue of assertiveness.
To read more about leadership, managing people, Louis Coutts.
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