How Organizational Leadership Destroys Itself

In the past several years, there have been numerous organizations that have seen failure because of their leaders and their leadership theory. I am currently reading William Cohan’s book House of Cards that works through the financial crisis of the early 2000’s. Cohan focuses on Bear Stearns as one of the financial institutes that failed during the financial crisis. The noticeable piece about the Bear Stearns failure was as much about the leadership of the financial institute as anything else. What is more amazing is the type of leadership style that contributed to the failure is still at work in many organizations. Because of this faulty leadership style, many organizations have reached an unhealthy state.

There are three pitfalls that leaders and organizations model that can lead to a failure of the institute. The first two are personal decisions that are made by individuals in their attempt to climb up the ladder to lead. The third is an organizational decision about leadership promotion that can lead to possible failure in a department, unit, group, or entire organization.

Me vs. We

When leadership begins on the foundation of “Me/Self” rather than “We/Team”, the opportunity for true success is small. This is not to say success defined in some manner will not happen. However, it will not be a success that leads to the total growth of an organization and its team members.

Individuals that are leaders by position who think only of themselves can cause division and lack of value in their team. The idea of leadership for them is to highlight their achievements and skills while neglecting or taking advantage of the team members. They want the limelight and believe only they deserve it.

As stated before, this can be true, but it does not provide for a healthy organization. A true leader will understand that “Me” is actually “We”. This means the entire team and not only those they favor. The breadth of knowledge, ideas, and skills of an entire team is a valuable asset for a leader. The opportunity to harness this and use it to bring about organizational success that everyone can feel a part is beneficial.

Positional Privilege

Besides the leader that operates with only their self in mind, there is also the leader that leads because of the privileges that surround the position. I have been in organizations that leaders, whether they are true leaders or not, take advantage of their position. This can be a little difficult but let me explain.

I often talk about the need to have a healthy life balance of work, family, and relaxation. However, as a leader you need to know when the appropriate time to take time off and when not to take it off. As a leader, the participation in organizational events, meetings, and conferences is important to your entire team. However, if you decide to take the time off during one of these scheduled occasions, to your staff, it can indicate your lack of support for the event or that you do not care about it. On the other hand, I have a good friend that does extensive traveling returning home late at night but will still be up and available for early morning meetings. Even though traveling is a part of the position, the commitment to the team he leads is more important than the positional privilege of taking time off.

Competency vs. Leadership

A third area of concern is an organization that promotes individuals based solely on competency and length of service into leadership positions. Let me state first, that any true leader does need to have competency in order to lead at any level of an organization. However, that is not the primary requirement for leadership. If an individual knows how a specific program works but does not know how that interfaces with processes or its role in strategic planning, that can cause an issue for an organization. Additionally, the knowledge of a program does not offset the inability to lead, motivate, or grow people that they are set to lead.

I think that any strong, successful leader is continually learning and gaining knowledge. The difference is not to gain control or move up in company but to better serve the company. The competency that a leader strives for is to provide growth for everyone, not just themselves. The individual that seeks knowledge for themselves becomes a “Me” leader and not a “We” leader and is usually wanting to move up into leadership for power and privilege not to serve others.

Your Choice

The world of business, higher education, government, and many other industries look for individuals who will lead them to success. However, that does not mean they leave behind the values of team growth, valuing individuals, and serving others. It now requires those items and many more. The questions now become; how is your organization being led? How are you leading? Do you do it for yourself and the privileges associated with the position? Do you desire to assist others to succeed and in it see the organization grow? That decision is up to each individual and through it success and growth can be experienced. If not, your organization could be the next Bear Stearns. 

Focus, Pivot, Build Confidence

I want to begin by stating that I am not a New England Patriot fan or an apologist for the team. I actually rooted against them in the Super Bowl. This might be the fact that being an Ohio State fan, I cannot root for Tom Brady from the “School up north.” Further, as a long-suffering Cleveland Browns fan, watching a past coach, whom we fired succeed with another team, is heart wrenching. However, what I witnessed, as many others did, was an incredible example of what a successful leader in a successful organization can accomplish.

The success of the Patriots was not based on only the actions in this game, but is a part of the essence of the organization and specifically their coach. It began from the pre-season practices and meetings that each player and coach attending. In those meetings, three important values were shaped to lead to the victory in the Super Bowl.

Focus on Your Strategic Vision – The first value is that a leader stays focused on the strategic vision of the organization, and make sure the rest of the organization is focused as well. For Bill Belichick, the focus from the first day of practice was to win the Super Bowl. It was not to make it through the season and play well, but their strategic vision was to be the best football team in the league. Even when there were a few obstacles, which we will discuss later, Belichick kept the entire organization focused on the vision. This did not wane in the game, even at 28-3, but was the force the drove the team.

As a leader, this is needed in all organizations. When an organization begins to falter, it often means the leadership has lost focus of the strategic vision. It causes the organization to begin to operate in fear, which leads to basing decisions on false information and creates operational units to silo and not partner. When a leader can stay focused on the strategic vision, and continually remind their team, then the opportunity for success will be more possible even when obstacles arise.

Pivot and Make Adjustments – The Super Bowl was not the beginning of the Patriots success but was the culmination of their organizational identity and desire to be successful. As I watched the game, I said to friends of mine that I was still concerned about the Patriots because Bill Belichick is able to make the necessary adjustments to refocus the team to be successful in the game. This could be seen in the Super Bowl and the domination that the Patriots showed in the last portion of the game.

However, this was not the first major obstacle the team faced. The beginning of the year started with the team’s number one quarterback, Tom Brady, suspended for the first four games of the year. Belichick needed to make an adjustment to the team in order for them to be successful and not just maintain. The strategic vision and goal was still the same with the adjustment, winning the Super Bowl.

When an organization faces obstacles, successful organizations will make the needed adjustments to continue to move forward towards fulfillment of the vision and not only maintain. I have been a part of organizations that when obstacles influenced the vision of the organization, it would create chaos. The leadership would not be prepared or know to make the necessary adjustments or pivot their idea and would move to fear based model of operations. This would then lead to silos in the organization. Other organizations back off and maintain their current place when obstacles influence a vision, which can be good, but many organizations stay in the maintaining stance and never adjust or pivot towards operational success.

Team Confidence – The final piece for the Patriot’s success in the Super Bowl was the confidence that the team had from their coach. Bill Belichick from the beginning of the season instilled confidence in the players on his team. Confidence is not only telling the player they are doing a good job, but more importantly it comes from believing in them as a person. Belichick has the ability to not only access talent and form them into a part of the team but he has real belief in the abilities of his players and pushing them to success.

A successful organization is lead by an individual that is able to bring the best of their team or teams. This begins by a leader believing in the players’ talents, skills, and knowledge they bring to their position, and pushing them to excel. This belief leads to the confidence of the entire team to succeed in accomplishing the strategic vision or project of the organization.

An organization with an environment where employees do not have confidence to succeed appears when employees do not feel like the leaders believe in their talents, skills, and knowledge of their positions. Lack of confidence often spreads and causes an organization to lose focus of the vision and to operate in fear. As long as though leaders stay, the environment will probably not change. That is why building confidence is needed at the beginning is an essential element of the organization and not a “program” that is created when times are bad. 

As an organization, the New England Patriots won the Super Bowl at the beginning of the year, and more accurately, 17 years ago when the organization brought Bill Belichick as their head coach and he began to build a team that would continually stay focus on the strategic vision and goals. The team learned to make adjustments and pivot when obstacles arose. Finally, he instilled belief in every person that was a part of the organization, which lead to the confidence to produce the success the organization strove.

As a leader, are you doing this now? If not, what do you need to do to begin moving in this direction?

Build People, Build Your Organization

Even though this new year has just begun, I have found myself on the road twice in the past two weeks. These trips provided time for me to finish reading Good Profit by Charles G. Koch, the CEO of Koch Industries, Inc. The central premise of the book is the management program used by Charles at Koch, called Market-Based Management, to create a successful organization. Market-Based Management, or MBM, has a core objective of developing good profit, which is defined as revenue from the purchases of individuals for products developed to improve people’s lives. Good profit is created in a culture where employees are free to work entrepreneurially to meet the needs of the customers. Although sounding simple, in many organizations this is difficult to actually implement.

As a leader in your organization, creating an environment of success is the core purpose. This success seeps into areas of revenue generation, profitable operations and other areas of an organization. The key ingredient to the success of an organization is the development of its teams and individuals, “build people build an organization.” There are three items that I think contribute to the success of an organization through your teams. 

Valued Individuals Produce Excellent Service – There are many different customer service programs and processes that are implemented in companies today. No matter what program or process an organization implements the key to customers experiencing excellent service begins with the team members. When individuals feel valued and are excited to be at the company, the service will show it. The positive attitude and desire to make the organization successful that the employee produces is reflected in the service the customer experiences. However, when an employee does not feel valued or does not enjoy being at the company, it does not matter what customer service program or process you implement, the experience your customer receives will probably less than excellent.

I had the pleasure of having my wife join me on one of the trips this year. We decided to arrive a day early to enjoy sometime in Napa at a few wineries. One of our favorite wineries is Grgich Hill Estates and we were returning for our first visit in over 17 years. As we entered, Andy greeted us and finding out about our return provided an opening “welcome back” taste of a wine before our actual tasting began. The experience with Andy was excellent and you could tell that he felt valued and enjoyed being at the winery by his excitement about the wines and the information he provided. His excitement spilled over to my wife and I as we looked at the possibilities to invest more into the winery.

Decisions Do Not Need to Take Journeys – In many organizations that are dealing with decline, there is an ethos that only upper management can make decisions. Although this is good for some decisions, not all decisions need to be viewed in the same way. This process often causes a slow reaction to decisions that need answers immediately, which can then lead to a loss to the organization. Additionally, team members that are in the day-to-day activities have a better understanding of the current situation that affects the decision. Their knowledge is wasted when upper management is only allowed to make decisions.

A successful organization provides each team member a level of power to make decisions. This process leads to an organization that is not bogged down in decisions and is able to move with flexibility when decisions need to be made. Providing each team member with the permission and tools to make decisions leads to success as well as a better experience for your customers.

Provide Tools to Exceed Expectations – In a world of greater expectations, organizations often do not provide their teams with the tools necessary to meet or even exceed the customer’s expectations. Providing decision making power, creating flexible processes, or providing cross training between positions, are all tools that an organization can offer to their teams to exceed expectations.

The Ritz-Carlton set the standard early on in its creation to be the place that provides their guests with the highest quality service, immaculate interiors, and exceeded expectations. The Ritz-Carlton did not make this a motto or idea but it put it into action. They provided their staff with the tools needed to exceed the expectations of their guests. One tool was the empowerment given to each and every employee. The Ritz-Carlton employee handbook states:

At The Ritz-Carlton, everyone has $2000/day per guest to make it right or delight, but the money is symbolic. No one is walking around with $2,000 in his or her pocket. However, from day one at your job, you’re encouraged and empowered to fix or improve a guest’s experience, and you may spend up to $2,000 to do this.

Not every organization is able to provide this specific tool, but there are tools that you can be providing to exceed expectations.

The world is looking for successful organizations to support them with the products that make their lives better. Whether you lead an entire organization or one department, the first place to start, as a leader, is to empower your teams and employees. Today decided if you are willing to:

• Begin to value your employees
• Make decision-making available at all levels
• Provide the tools for employees to exceed expectations

Today can be the beginning to your organization’s success.

Dealing with the Heat

Several weeks ago, my wife and I spent time in Palm Springs, California, with family. While we were “vacationing” the daytime temperature hit 125 degrees! It reminded us of the reason why we had moved from the Arizona desert heat to Southern California. Living in a place where the temperatures can make it so hot you can cook an egg on the sidewalk, you learn to adjust your life to not only survive but be fruitful.

Leaders often feel the heat when downturns hit their industry and survival is the preeminent focus of their lives. Pressure from investors and boards often push leaders to make decisions that seem correct at the time but in actuality, they produce negative results for the organization. These decisions are often the result of fear.

Living in Arizona, the summer months would push most people to stay inside their homes with the A/C down, isolating them from the outside world. The thought of going out to spend time with others, or engage in activities outside was dreadful. Instead, staying inside and disconnecting for a “few months” was easy, but the results were lapses in relationships, exercise, and discovery of new attractions.

The same is true for leaders dealing with their own heat affecting their organizations. Instead of looking outwards, they isolate the organization and start to cut budgets, production, and labor. The fear of downturns or changes in the marketplace creates a toxic organization that fuels uncertainty for the company and causes fear to permeate in all levels.

The hope of Fall that brings a relief from the Summer heat is seen in leaders of organizations that look beyond the current issues with foresight to create a vision of an organization that is successful. A leader that understands a couple basic principles for leading an organization towards success as opposed to leading in fear will quench the reservations of the organization’s investors and boards.

Capitalize on Opportunities

During the summers in Arizona, people that are fruitful in their daily lives see the various opportunities that others miss. Swimming pools can be seen throughout the city; however, most pools go unused during the daytimes of summer. To some, the pool becomes a great place for an evening swim, a place to enjoy the sunset. The low humidity of Arizona along with the water provides refreshing relief from the daily 100 degree plus temperatures.

For others, golfing during the summer is like Christmas day. The opportunities to golf at some of the nicest courses in the area for up to 50% off provides great opportunities for people to enjoy time outside in the early morning or late afternoon, when the heat is not as intense. The people that barricade themselves in their homes all summer do not see these opportunities as positive and often find summer difficult to get through.

The same is true in business. Bob Legge of Legge & Co. said, “Economic downturns are actually the best time to rethink your business strategy and gain a big advantage over your competitors.” While other organizations are turning inward and cutting budgets, products, and labor, leaders of successful organizations look to capitalize on opportunities that present themselves and establish them as a leader when the market changes. Opportunities can include new product creation and innovation, expanded marketplace presence, and talent development. These areas can be overlooked when an organization is moving forward but also are cut when an organization is in a downturn. It is the leader that can push one or more of these areas forward who will reap the benefits on an organization that not only survives but also grows and has the potential to lead its industry.

Routine Re-Evaluation

Not only do people in Arizona look for new opportunities for enjoyment during the summer, they also re-evaluate their daily routines. One such change is seen in the morning with the breakfast meeting and gathering a large part of the community. In their desire to spend time with people in relationship, the locals will often meet for breakfast before it gets too hot to enjoy food and fellowship.It is not that people start having breakfast during the heat. It is they change their routine about breakfast and by choosing to get out of their house and develop their relationships.

The same is seen in organizations with progressive leaders. During a time of “heat”, a successful leader will look at current processes, programs, and departments and reevaluate their impact for the long-term success of an organization. There are organizations that do this out of fear but a leader that understands the need to let go of unsuccessful items and replace them with new processes is beneficial for an organization.

Vijay Govindarajan, in his book The Three Box Solution, describes this action as a “Box 2” item. Vijay describes Box 2 as; it helps an organization “escape the traps of the past by identifying and divesting businesses and abandoning practices, ideas, and attitudes that have lost relevance in a changed environment.” The perfect time for a leader to forget about the past is when an organization is negatively affected by changing dynamics of the market and look to not only survive but also grow. Hylke Faber, the founder of Constancee, said this about Box 2 decisions, “As soon as I find the courage to say good-bye to a past that no longer serves – not looking back, flexing my Box 2 muscles – I’m ready to take my first step into my new future.”

The courageous leader will lead an organization to success, while a fearful leader will create a toxic environment that results in decline and potential organizational death. Warren Buffet once said, “Be fearful when others are greedy and be greedy only when other are fearful.”

Fear or Prospect

As a leader during a time of “heat” or downturn, you can influence an organization from the position of fear or the position of prospect. The decision is yours, the leader. Do you want to lead from a position of fear that creates a toxic environment? Alternatively, do you want to lead from a position of prospect that produces an environment of innovation, creation, and development? It boils down to a decision to expand the organization or end the organization. Where will your organization be when the heat is over?