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Excellence 

Leadership 

VOLUME 1 ISSUE 3 MARCH 2006 

THE JOURNAL OF HUMAN CAPITAL MANAGEMENT, ORGANIZATIONAL EFFECTIVENESS AND EXECUTIVE LEADERSHIP 

“I am looking for [people] who have an 

infinite capacity to not know what 

can’t be done.” Henry Ford 

Winning 

at Work 

Noel M. Tichy 

Why Smart 

Executives Fail 

Sydney Finkelstein 

Sometimes 

Less Is More 

Jeffrey Pfeffer and 

Robert I. Sutton 

www.humancapitalinstitute.org 

Inspiring Others 

Richard Boyatzis and 

Annie McKee 

w w w . L e a d e r E x c e l . c o m

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We can help.

Excellence 


VOLUME 1 ISSUE 3 MARCH 2006 

THE JOURNAL OF HUMAN CAPITAL MANAGEMENT, ORGANIZATIONAL EFFECTIVENESS AND EXECUTIVE LEADERSHIP 

FRED SMITH 

Market Leadership 

It starts with strategy 

and execution . . . . . . . . .3 

NOEL M. TICHY 

Winning at Work 

Practice new ways 

of leading people . . . . . . .4 

DAVID ALLEN 

Make It Happen 

Take five steps of 

implementation . . . . . . . .5 

CHIP R. BELL 

When Leaders Cry 

Aunthenticity makes 

strong connection . . . . . .7 

PAUL BERNTHAL AND 

RICH WELLINS 

Growing Leaders 

Align development 

with business needs . . . .8 

SCOTT CAMPBELL AND 

ELLEN SAMIEC 

You Can’t 

Win at Golf 

with One Club 

Learn to excel in 

five dimensions . . . . . . . .9 

GLENN WARING 

Why CEOs Fail 

Learn to take risks 

and take losses . . . . . . . .10 

SYDNEY FINKELSTEIN 

Why Smart 

Executives Fail 

They don’t learn 

from mistakes . . . . . . . . .11 

ROBERT E. 

MITTELSTAEDT, JR. 

Will Your Next 

Mistake Be Fatal 

“I am looking for [people] who have an 

infinite capacity to not know what 

can’t be done.” Henry Ford 

humancapitalinstitute.org 

It could be if it’s 

in the culture . . . . . . . . .12 

LOWELL L. BRYAN 

AND CLAUDIA JOYCE 

21st Century Structure 

Make your knowledge 

workers productive . . . .13 

JEFFREY PFEFFER AND 

ROBERT I. SUTTON 

Sometimes Less 

Is More 

Avoid abuses of 

power and position . . . .14 

JACK DALY 

Culture by Design 

You either design it or 

get it by default . . . . . . .15 

JUDITH GLASER 

Power and Influence 

Move forward together 

in a healthy way . . . . . .16 

WARREN WILHELM 

Learning Organizations 

Sustainability is the 

result of learning . . . . . .17 

BO BURLINGHAM 

Small Giants 

You don’t need to 

grow to succeed . . . . . . .18 

RICHARD BOYATZIS 

AND ANNIE MCKEE 


You can become a 

resonant leader . . . . . . .19 

AUBREY DANIELS 

AND JAMES DANIELS 

Measure of a Leader 

Ask followers to 

assess effectiveness . . . .20

D . I . R . E . C . T . O . R ‘ S 

Prepare Now! 

The new war for talent has begun. 

by Allan Schweyer 

AT THE 2006 WORLD ECOnomic 

Forum in Davos, 

Switzerland, Samuel A. DiPiazza 

Jr., Global Chief Executive Officer, PricewaterhouseCoopers, 

noted that in his 30 

years of experience, he has “never seen such 

an incredible shortage of, or demand for, 

talented people—regardless of whether it is 

in Germany, Brazil, China, India or Kansas. 

… It is an issue even in countries with good 

population growth and education,” he said, 

“…There is this war for talent, and we are 

not just talking about the top 5 percent.” 

But today’s war for talent is different 

than the last. It is less a case of across-theboard 

worker shortages and more a matter 

of finding, developing, and keeping the best 

human capital—wherever it may be. This 

decade’s human capital crisis may become 

worse than last decade’s war for talent 

because it is combined with a near-worldwide 

demographic problem. Yet for a few, it 

will be easier to manage because they have 

taken steps to transform their traditional 

human resources and recruiting practices 

into proactive talent and human capital 

management strategies. 

Global Competition 

Those organizations (and cities, regions, 

and nations) that are most prepared today, 

understand that competition for human capital 

is already global and that the global war 

for talent will become increasingly fierce. 

North America, Western Europe, and parts 

of Asia will fight for human capital—just as 

traditional supply countries like India and 

China will fight to keep it. Even developing 

countries will begin contracting in terms of 

population and workforce growth. This has 

already begun, sooner than expected, in 

Russia, and will start in China after 2012. 

Gradually, there will be very few countries 

outside of India, the Middle East and Africa 

with expanding working-age populations. 

Winning organizations in North America 

and Western Europe already have a global 

workforce strategy in place or are rapidly 

forming one. They are creating relationships 

with universities, global partners, and 

directly with worldwide talent now, and 

they are learning how to build high-performance 

global and virtual teams. Offshore 

outsourcing is already becoming less about 

N . O . T . E 

tapping labor for cost advantages and more 

about finding and leveraging the best talent, 

wherever it resides. 

The Human Capital Institute believes 

that there is no more pressing economic or 

business issue than being prepared for 

human capital shortages (that in many professions, 

industries, and regions are already 

upon us). We strongly advocate for immediate 

action in business, academia and government 

to develop appropriate talent 

management responses. 

Future Is Here 

In this respect, HCI’s inaugural National 

Human Capital Conference and Expo is this 

year’s most important event for professionals 

and leaders in business and government. 

Our theme, “The Future is Here,” reflects 

the speed at which we are rushing toward a 

global knowledge economy, wherein competitive 

advantage shifts away from physical 

assets and towards the game-changing 

creativity, speed and agility of the workforce. 

Keynote speakers include Richard 

Florida, who is among the world’s foremost 

knowledge economy experts. His innovative 

measures for gauging the vitality and 

future of organizations, regions and nations, 

from a human capital perspective, are making 

headlines around the world. 

Contributors to this month’s journal, including 

Noel Tichy and Sydney Finkelstein, will 

present their own views on leadership and 

human capital management in the global 

knowledge economy at the conference. 

We encourage you to join us on April 6-7 

in Chicago as we bring together a coalition 

of forward-thinking leaders from the corporate, 

academic and government spheres to 

explore today’s challenges and tomorrow’s 

imperatives. The conference will provide 

the latest ideas and solutions geared to 

global talent management, including acquisition, 

retention, development, performance 

management, technology, and planning. I 

can think of no better way to jump-start or 

accelerate your preparations. 

For more information and to register, 

please visit: www.humancapitalinstitute.org. 

Or, if you have questions, please email me 

at aschweyer@humancapitalinstitute.org. 

Executive Director, 

The Human Capital Institute 

Leadership Excellence (ISSN 8756-2308) is published 

monthly by Executive Excellence Publishing, 

1366 East 1120 South, Provo, Utah 84606. 

Article Reprints: 

For reprints of 100 or more, please contact the 

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Internet Address: http://www.LeaderExcel.com 

Editorial Purpose: 

Our mission is to promote personal and organizational 

leadership based on constructive values, 

sound ethics, and timeless principles. 

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All correspondence, articles, letters, and requests 

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Department, Executive Excellence, 1366 East 

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Contributing Editors: 

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Grenny, Jim Kouzes 

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AIRS 

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Copyright © 2005 Executive Excellence Publishing. 

No part of this publication may be reproduced or 

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publisher. Quotations must be credited. 

6 Leadership Excellence


Marketing 

Executive Excellence names Fred Smith as March 2006 Leader 

of the Month. Fred Smith is founder and CEO of FedEx. 

Market Leadership 

It all starts with smart strategy. 

by Fred Smith 

WHAT DOES IT TAKE 

to start an enterprise 

and grow it to 

become a $25-billion company It takes 

continual learning and discipline. 

I synthesize ideas from different 

disciplines—from technology, retailing, 

and industry. I also read many hours a 

week—and get ideas from members 

of our senior management team. We 

don’t use consultants to tell us what to 

do. We use consultants to help us do 

what we know we need to do better. 

To keep great talent on our leadership 

team, I practice three rules: 

1) I don’t look over their shoulder— 

they have the authority, freedom, and 

flexibility to do what they need to do; 

2) they enjoy being part of a leadership 

team that manages a global company; 

and 3) we make it an attractive 

financial arrangement for them, as 

they share in the performance that 

they produce. 

I believe Alfred Sloan’s doctrine 

that grew General Motors. He recognized 

different market segments and 

used common technologies, materials, 

and resources. He married you in a 

Chevrolet, buried you in a Cadillac, 

and had something for you every step 

in between. I think the model of the 

Defense Department is similar—the 

Navy, Air Force, Marine Corps, and 

Army seek to achieve their own missions, 

but increasingly they collaborate. 

Many businesses have different 

divisions focused on market segments, 

but seek synergy in offering those 

capabilities in a broader portfolio. 

Technology integration has come a 

long way. The sales, marketing, and 

customer service experience are much 

better integrated. The Internet is providing 

a standard, low-cost medium 

that people can use to sell, source, and 

service things without regard to time 

and place. We are achieving impressive 

numbers in our international 

business, because people can look at 

everything there is to buy and sell in 

their sector, cross-referenced by search 

engines. We’re seeing a spontaneous 

combustion of economic activity 

because of this narrow-cast/broadcast 

capability of the Internet—and it 

bodes well for growth. 

Radio Frequency Identification 

(RFID) will have big impact on making 

sales frictionless. Soon you’ll go 

into a store, fill your shopping cart 

with product, pass through a scanning 

arch, and swipe your card. Wal-Mart 

and others are pushing that capability. 

We at FedEx are a leader in applying 

new technologies, like 

laser bar codes, scanning devices, and 

handheld computing devices. 

Originally, we were designed to move 

high-value and high-tech items with 

great reliability and precision. As more 

of those items started flowing through 

our system, we soon needed a way to 

measure and monitor each transaction. 

We had to embrace the IT revolution. 

We hired Jim Barksdale, one of the 

people who commercialized the 

Internet, as our COO. To keep up with 

things, we invented the bar code 

tracking and tracing system. 

When we first started, our handheld 

devices were about the size of a 

breadbox. Nobody had ever printed 

multiple-form, sequentially numbered 

items so you could track and trace 

everything through the system. We 

did all that, miniaturized the handheld 

device, developed the world’s largest 

radio system, and put them in our 

trucks, enabling us to handle millions 

of discrete shipments as if we were 

handling a few shipments. 

Then it occurred to us that this 

information was so valuable to us that 

it might be equally valuable to our 

customers. So, we developed a proprietary 

network and supplied clients 

with PCs so they could monitor shipments 

worldwide. Then we made that 

tracking system available over the 

Internet to everyone. As we add more 

useful applications on FedEx.com, we 

create more usage. We make it so easy 

to ship things worldwide today—just 

visit FedEx.com and click on the international 

shipping icon, and FedEx 

local trade manager will tell you exactly 

what you need to do. 

The global nature of business is 

playing into our hand. Today, the location 

of production is almost irrelevant. 

It’s simply just a cost/time trade-off. 

You can make your stuff anywhere— 

simply calculate manufacturing cost 

and transit cost. 

FedEx can still become a lot bigger. 

Pogo, the Possum, said, “If you want 

to be a great leader, find a big parade 

and run in front of it.” That’s what 

we’re doing to grow. We are adding 

200 locations in China alone! 

I have great confidence in human 

ingenuity and entrepreneurship. We 

will continue to see a lot of innovation. 

The Internet will allow many 

interesting things to be done that we 

can’t contemplate today. 

Three Components to CEO 

I view the CEO job in three parts: 

strategy, management, and leadership. 

1. Set a viable business strategy. I 

had a good friend, Abe Plough, who 

was a legendary entrepreneur. When 

he was in his 90s, he asked me to 

come by and see him for breakfast. As 

I was leaving, he’d say, “Now, Fred, 

just remember—the secret to being a 

good business is to be in a good business.” 

He was right. You can have the 

best of everything—but if you’re in a 

terrible business or have a bad strategy, 

you won’t achieve a good result. 

You must have a viable strategy. 

2. Engage in the art and science of 

management. Carefully assess your 

strengths and weaknesses; where you 

are weak, bring in someone who is 

strong. I have many weaknesses, but I 

play to my strengths. I can do most 

things in the management sector. I can 

read a P&L and balance sheet, but not 

nearly as well as Alan Graf, our CFO, 

since I’m not a CPA. I understand the 

basics of IT and aeronautics, but I 

recruit experts, delegate to them a lot 

Leadership Excellence 3

of responsibility, and express my confidence 

in them. Still, you’ve got to 

measure it, manage it, and check on it. 

3. Build leadership at every level. 

The small-unit level is where the rubber 

meets the road—where you deal 

with the customers. There you need 

well-motivated, well-trained, and 

committed people who meet or exceed 

customer expectations. In the supervisory 

ranks, you often have people who 

are specialists. However, in the senior 

management ranks, you must lead 

strong-willed, intelligent, ambitious, 

and smart people. You can find the 

principles of great leadership practiced 

in every great organization. 

Leadership is challenging, since the 

heart of leadership is subordinating 

your self-interest to the greater good 

of the team or organization. CEOs 

must be able managers and effective 

leaders. Where you’re strong, play to 

that strength; where you’re weak, 

recruit people who can help you. 

You can’t be a CEO if you don’t 

have a good strategy. I was always 

convinced that the market demand for 

our service was huge. So it was just a 

matter of time and money. What we 

do at FedEx is vital to the commerce of 

the world. Without the fast-cycle transportation 

capabilities that FedEx pioneered, 

the business models that have 

changed the world would not have 

been possible. The success of Wal-Mart 

and Dell, for example, is largely due to 

the power of starting small, dealing 

with employees and customers differently, 

and having an iconoclastic distribution 

and transportation system. 

I can’t think of anything else I would 

rather be doing as long as my partners, 

the Board, and shareholders are 

happy with my performance. FedEx 

today is fun for me because I enjoy the 

three aspects of the job—strategy, 

management, and leadership, I spend 

more time on strategy and leadership 

and delegate management functions. 

Maintaining work-life balance is 

part of the discipline that you need to 

bring to your job. I have a great and 

full family life, and I play tennis to get 

my heart rate up. Executives who 

work themselves into exhaustion or 

incoherence lack the discipline to do 

the job. I don’t take the job home with 

me. I may take some reading home. I 

enjoy reading history. In fact, my management 

style has been largely shaped 

from my reading of history. 

LE 

Fred Smith is CEO of FedEx. This article is adapted from his 

interview with Chief Executive Editor-in-Chief Bill Holstein. 

www.chiefexecutive.net 

ACTION: Master the three components. 

Leadership Wins 

Winning 

at Work 

Use three keys. 

by Noel M. Tichy 

WHAT SEPARATES 

winning organizations 

from the alsorans 

I find that winners maintain 

annual revenue growth and an operating 

return on assets—as opposed to 

simply slashing payroll and expense. 

Their consistent financial performance 

enriches shareholders, builds communities, 

and provides greater opportunities 

for employees. 

They are led by men and women 

who nurture other leaders at all levels. 

Even if you, as a leader, are smart 

enough to anticipate and 

prepare for massive economic 

and social shifts, 

you can’t respond to the 

ground-level demands of 

the moment without the 

energy, commitment, and 

ability of all your people. 

The ultimate test of leadership 

is sustained success, 

which demands the 

constant cultivation of 

future leaders. 

All the money you 

invest in leadership development 

means little without an equal investment 

of your own time and effort. If 

long-term success requires more leaders 

at more levels than your competitors, 

then teaching, coaching, and 

cultivating others becomes a strategic 

imperative for senior executives. The 

best leaders know that their success 

depends on others, and that leading 

and teaching are inextricable. They 

spend hundreds of hours a year working 

with their colleagues—to share 

ideas, identify needs, and develop 

hands-on business expertise. 

Three Keys for Leading 

The ability to develop leaders 

requires: a teachable point of view, a 

story, and a well-defined methodology 

for teaching and coaching. 

1. Teachable point of view. As a 

leader you must articulate a defining 

position. You must talk clearly and 

convincingly about who you are, why 

you exist, and how you operate. You 

need to have ideas on products, services, 

distribution channels, customers, 

and growth; and these ideas 

need to be supported by a value system 

that you articulate, exemplify, and 

enforce. But you also need emotional 

energy and edge—and generate positive 

emotional energy in others. You 

need the edge to face reality and make 

tough yes-or-no decisions. That is 

your unique burden—at crucial 

moments, when forced to act quickly, 

to make the difficult choices. It often 

makes you unpopular, which is why 

those who need to be liked are seldom 

effective leaders. Leaders must see 

things as they really are and mobilize 

an appropriate response. You can only 

make those decisions and engender 

that response if you have clear ideas 

and values. Good ideas, appropriate 

values, positive energy and edge—are 

part of the package you present to 

those you hope to develop. 

2. Living stories. People organize 

their thinking in the 

form of the narrative 

story. Individuals, families, 

organizations, communities, 

and nations all 

have tales that help 

make sense of themselves 

and the world. 

Leaders can tell three 

kinds of stories: 1) the 

“who I am” story in 

which leaders describe 

themselves; 2) the “who 

we are” story, in which 

you articulate the group identity; and 

3) the “where we are going” story. Use 

the power of storytelling effectively 

and put your people at the center of 

your stories. Storytelling is the way 

people learn from one another and 

connect with one another. 

3. Teaching methodology. To be a 

great teacher you have to be a great 

learner. Most effective teachers and 

leaders will tell you that they grow as 

much as those they teach and lead. The 

process of teaching starts with having a 

system for interacting with people. You 

must be methodical but not mechanical 

in your approach to teaching. To make 

a difference, you must have the confidence 

to be vulnerable to others; you 

need to share your mistakes and 

doubts as well as your accomplishments. 

You can’t hide behind your 

position—delivering a canned speech 

to a training class and then escaping. 

You must be genuine. Phonies and 

martinets will be found out eventually. 


Learning to Teach 

Articulating your ideas and values, 

developing a teachable point of view, 

and developing stories that bring your 

views to life are all learnable skills. For 

instance, to develop stories, think 

about a time in your life when you 

made something happen through 

other people. Run the video of your 

life and pick the proudest moment 

you’ve had as a leader. 

If you tell your story to someone 

else, and then talk about why it was 

an example of good leadership, you’ll 

uncover the basic tenets of leadership: 

“I had a vision. I persisted. I embodied 

in my own actions the message I was 

trying to create. I was able to enroll 

people. I fought through resistance.” 

Implicitly, we know what good leadership 

is, and all people can become 

more motivated to work on leadership 

by remembering when they felt proud, 

when they’d been in a tough situation. 

Developing leadership talent is the 

job of leaders. Share your values, 

ideas, and stories with people. Outside 

consultants can’t develop 

long-term leadership talent. 

That is your job. 

The conventional wisdom 

in leadership development 

is to develop a 

set of leadership competencies 

and then figure 

out a way to develop 

people around those 

competencies. What’s 

missing is the leaders 

teaching colleagues. 

People want their leader 

to look them in the eye and say, “Here 

is where our company is going, and 

here is what we need from leaders in 

order to get there.” Leaders need to 

build a learning and teaching organization—one 

with the capacity to build 

leaders and create an environment 

where leaders are teaching leaders. 

Leaders are both born and made. 

With coaching, commitment, and hard 

work, any group of people can 

improve their ability. Any organization 

that takes the time to get more 

leadership out of people will be far 

ahead of its competitors. Are all managers 

candidates for the top job Of 

course not. But can they be a lot better 

than they are now Absolutely. We can 

all hone our ideas and better articulate 

our values and improve our capacity 

for making yes-no decisions. So it’s 

worth the effort to develop everybody. 

Losing organizations handicap their 

field of potential leaders and invest 

their training and development 

resources only in those they think will 

go furthest. Inevitably, they pass over 

a lot of talent. Winning organizations 

often bet their hunches, too, but they 

typically wait longer to do it. They 

look at broad leadership skills, not just 

success with particular projects. And, 

they continue to invest in the development 

of everyone else. This more 

inclusive approach helps get the best 

out of everyone—and keeps late 

bloomers and mavericks contributing 

long after others have written them off. 

The long-term success of leaders 

can’t be measured by whether they 

win today or tomorrow but by 

whether or not their company is still 

winning 15 years from now, when a 

new generation of leaders takes over. 

New Way of Leadership 

Leaders of winning organizations 

use ideas, values, emotional energy, 

and edge to develop future leaders. 

They combine a teachable point of 

view with a focus and personal role in 

the development of others. 

Old Way: Coaching is 

on day-to-day problems. 

Development programs 

are based on cases taught 

by professors. Leaders 

proclaim values, often 

superficial messages for 

the masses. Training programs 

deliver a sugar 

high—by the time people 

return to work, the energy 

is gone. Professional 

trainers focus on time 

management and prioritysetting, 

not on tough decision-making. 

Leadership focuses on technical skills. 

They sponsor development programs, 

parading in and out of them periodically. 

New Way: Coaching is based on the 

leader’s own ideas, challenging people 

to create their own points of view. 

Development programs are practical, 

based on real issues. Leaders help people 

integrate their personal values 

with the values of the workplace—and 

explain the paradoxes when values 

collide. Programs are ongoing, as leaders 

teach frameworks for motivation. 

Leaders deal with people who do not 

meet performance or value standards. 

Leadership focuses on hard and soft 

issues and on personal stories. Senior 

executives lead portions of leadership 

development programs. 

LE 

Noel M. Tichy is a consultant and professor of OB and HRM 

at the University of Michigan, and director of the Global 

Leadership Program. He is author of The Leadership Engine, 

with Eli Cohen. Tichy@bus.umich.edu 

ACTION: Tell (and teach) your story. 

Performance 

Make It 

Happen 

Execute a vision. 

Execution 

by David Allen 

LEADERS MAKE THINGS 

happen by first 

framing a vision to 

define what done means and then 

making that vision operational— 

deciding what doing actually looks 

like. Few leaders can operate comfortably 

in both roles and navigate effectively 

between them. 

Most leaders focus on framing the 

vision, crafting the purpose, capturing 

and communicating the “spirit” of the 

organization. Actually getting things 

done is then left to managers and 

front-line workers. In fact, some leaders 

fail to see that making things happen 

is their job. 

But today the need for executive 

productivity is getting equal billing 

with the need to foresee and create the 

future. Yes, you must know where you 

are going; otherwise, any road at any 

speed will do. But just knowing where 

you want to be is not enough to lead 

effectively—you must get there as efficiently 

as possible with the best use of 

limited resources. The how and when 

and where are as critical for a leader to 

own as the why and who and what. 

Effective leaders work both angles. 

They unhook from the demands of 

day-to-day operations to rise above the 

noise and gain clarity, direction, and 

motivation. And at times they focus on 

structures, projects, plans, and physical 

action to execute the vision. 

Five-Step Implementation 

Our ability to get things done can 

be expanded by knowing how we naturally 

take things from intention into 

reality. The five steps of implementation 

create a model of how we get 

things done most effectively. 

1. Purpose and rules—defining the 

game. Do we know what we’re really 

about and why we do what we do Is 

it clear to us when something is offpurpose 

What do we really do The 

purpose defines the direction and 

meaning of the enterprise and sets the 

rules we agree to play by—our stan- 


dards. Whereas purpose gives us 

direction, values and principles lay out 

how we play along the way. We define 

what behavior works and how we act 

when we are at our best. When our 

people know the purpose and commit 

to the rules of engagement, we can 

trust them to make decisions intelligently, 

as needed. If we have doubts 

about their behaviors, we can’t let go. 

Where could a discussion of “Why 

are we doing what we’re doing here” 

be used now in your organization 

With whom would it be wise to have 

more clarity and agreement about critical 

behaviors Strong leaders initiate 

these crucial conversations on the front 

end to prevent disastrous ones later. 

2. Vision—defining the “what.” We 

create a vision to reflect what the purpose 

would look like in the real world. 

How big, how soon What would 

make the endeavor wildly successful 

It is not necessary to have numbers, 

dates, and times associated with the 

vision, although they might be included 

to give everyone a sense of scope 

and scale. What matters is that the 

image of success is clear and specific 

enough to let you calibrate how far 

you are from it. 

We are all envisioning all the time. 

But are the images we hold the ones 

we want to achieve Or are they pictures 

that might be negative or limited 

Are we holding a steady focus 

toward an inspiring picture of the success 

we really want, even if we don’t 

yet see how to get there Or are we 

allowing limiting self-talk take hold 

Visions sometimes just happen, but 

they can also be created, expressed, 

clarified, fostered, enhanced, improved, 

and expanded deliberately—and often 

need to be—since the source of conflict 

in implementation is that people work 

off different mental pictures about 

where things are going. The operational 

conflict can only be solved by an 

agreement at the level of vision. Where 

would a discussion of desired outcomes 

be constructive 

3. Brainstorming—laying the 

groundwork for “how.” We brainstorm 

ideas and details of when, where, and 

how in order to make the thing happen. 

The impulse to make the vision 

operational surfaces questions and 

sparks thinking. Capture all this thinking 

and catalyze idea-generation from 

as many sources as possible, so no 

vital perspective or detail will be 

missed. Many an “oops!” could be prevented 

with sufficient brainstorming. 

But two things must be in place: alignment 

with the vision, and a consensus 

about the details of current reality. If 

you disagree about where you’re 

going, brainstorming how to get there 

won’t help. And, if there is no consensus 

about current reality, the delta 

between where you are and where you 

want to be will be unclear, and decision-making 

will be off the mark. 

Where is there plenty of “blue sky 

thinking,” but not enough rolling up 

of the sleeves to grapple with things 

that are on the way and in the way 

4. Organization—creating structures 

and plans. When several ideas have 

been generated and captured, a structure 

will naturally emerge. Organize 

the thinking into components, subcomponents, 

priorities, and sequences 

of events (logistics) for implementation. 

How do we get our arms around 

all this stuff What’s the working blueprint 

we need to allocate our 

resources What are the deliverables 

that must be completed to achieve the 

objective What are the mission-critical 

pieces versus the nice-to-haves This is 

the arena for defining key projects and 

tasks. What needs more organizing in 

your world right now 

5. Next actions—getting things 

going. Decide next actions and who 

has them to create forward motion on 

all movable fronts of the project. Even 

the best thinking is in vain without 

deciding and taking the actions 

required to make the vision happen. 

What should take place, exactly, to get 

this thing going Is this a phone call to 

make, an e-mail message to send, a 

document to draft, a task to delegate 

Deciding the next action—and allocating 

responsibility for action to a 

specific person—is the final linchpin to 

getting things done. Everyone must 

know what done means (outcomes), 

and determine what doing actually 

looks like. The next actions on any 

moving part (a component not dependent 

on another unfinished piece) of 

the project need to be determined and 

allocated to yourself or others. There 

could be dozens of next steps. But 

there must be at least one, or the project 

will be bottlenecked. 

What has your attention now 

What’s the next action Who has it 

What plans need revisiting to determine 

who is doing what on the action pieces 

Engaging in this series of events is 

how we all get things done, naturally, 

all the time. An intention initiates our 

creative energy; an outcome vision 

directs our thinking about details and 

considerations; we organize the pieces 

into a coherent structure; we take action 

steps to put the parts into motion. 

Care and Feeding 

As simple as this process may seem, 

in complex enterprises these phases 

often need some care and feeding to 

ensure effective implementation. 

An ideal team has a mix of visionaries 

and doers. It is rare to find any 

leader or enterprise giving appropriate 

focus to all five implementation phases. 

Use this model as a diagnostic tool. 

Where are you in your thinking, decision-making, 

and implementation Are 

you focusing the attention at the right 

horizon right now 

Often, projects and situations need 

both more clarity and more constructive 

action—and there is usually something 

that leaders can do at these five levels to 

grease the wheels. There is often room 

to be more effective and efficient. 

This model supplies you with critical 

guidelines for handling the operational 

side of your role, preventing 

initiatives from getting stuck, and 

ensuring effective allocation of knowledge-worker 

resources. Organizing 

without brainstorming can undermine 

a plan. Off-purpose action can be 

chaotic. A vision without accountability 

for relevant projects can be vacuous. 

Thinking at these levels of creative 

development and decision-making 

does not happen by itself—intentional 

energy is required to direct the focus at 

the right horizon at the right time. 

Leadership is often associated with 

vision—and rightly so. Someone who 

has, holds, and communicates vision 

will tend to rise to a leadership role. 

But true leadership also gets things 

done. Trust—a major element for real 

leadership—is built not just by having 

great ideas but also from bringing 

them to fruition. A vision without a 

task is but a dream, a task without a 

vision is drudgery, a vision and a task 

is the hope of the world. 

LE 

David Allen is president of the David Allen Company and 

author of Getting Things Done. www.davidco.com 

ACTION: Take these five steps. 


Competency 

Emotional 

When Leaders Cry 

Authenticity makes a strong connection. 

by Chip R. Bell 

DOORS! THE SOUND 

tech’s voice 

boomed. And hundreds 

of employees poured into the giant 

hotel ballroom. Room lights dimmed 

as the spotlights bathed the massive 

stage revealing a colorful, themed 

background. Sounding like the voice 

of God, the sound tech again spoke: 

“Ladies and gentlemen, the CEO of 

Acme Manufacturing, Jan Topdog.” 

The CEO, scripted through a 

teleprompter and supported by dazzling 

slides, gave the financial history 

and projected goals. The scene was 

like a gazillion other big deal meetings. 

But, this one was different. 

Without warning the CEO moved 

to the edge of the stage. The speech 

changed from one of pragmatism to 

passion. As the CEO began to talk about 

the power of the company’s vision and 

the value of every employee, big tears 

began to fall to the stage floor. As the 

CEO completed the final sentence 

there was a long silence. The audience 

sat overwhelmed by what they had 

just witnessed. Then, they leapt to 

their feet for a long standing ovation. 

Real leaders have the courage to be 

authentic. It was not his tears that 

moved this audience—it was his 

courage to be unabashedly authentic—to 

be publicly real. Whether the 

emotion is anger, compassion, pain, or 

joy, the authenticity of leaders 

changes the nature of the connection 

and invites a valued link with others. 

Leaders too often associate their 

mantle of authority with a requirement 

for detachment. “I don’t care if 

my employees like me,” the swashbuckling 

ruler announces, “I just want 

them to respect me.” Such a view is 

often a preamble to emotional distance 

and calculated encounters. The 

pursuit of aloofness as the expression 

of authority invites evasiveness, not 

enthusiasm. It triggers reserve, not 

respect. An open-door policy is not 

about a piece of furniture. It is about 

an attitude of vulnerability. 

Organizations with genuine leaders 

have more than their share of 

employee engagement and cuttingedge 

breakthroughs. Turnover is lower 

because people value an environment 

free of passive-aggressive game playing, 

cynicism, and suspicion. Customers 

are loyal longer because they 

trust what they experience. Suppliers 

give better breaks because they view 

encounters as long-term investments, 

not short-term transactions. 

Real leaders don’t wear rank. 

Combat troops are better behaved in 

the field (where battle is likely to 

occur) than in the relative safety of the 

rear area. As an infantry commander 

in Viet Nam, I wondered if it was 

related to the fact that military leaders 

remove markings of rank while in the 

field, since enemy snipers seek to get 

battlefield leaders in their crosshairs to 

strip their adversary of command. 

This left the concept of “leadership” 

less related to obvious authority and 

more with subtle influence. It also 

took the focus off of “whom” and 

placed it squarely on “what.” Those 

officers who resorted to barking 

orders in a desperate attempt to signal 

rank often found their edicts sabotaged 

or circumvented by adroit foot 

soldiers skilled at deception. 

Once I invited a fellow consultant to 

assist me with a group of senior executives 

of a long-term client. She had 

heard me rave about the CEO of this 

company. Her flight was delayed and 

the meeting was underway when she 

arrived, preventing me from introducing 

her. After listening to the group in 

a spirited dialogue over a strategic 

challenge, she asked me, “Which one is 

the CEO” It was the highest compliment 

I could have bestowed on a 

leader fond of saying, “Never add any 

more leadership than is needed.” 

Leaders without rank busy themselves 

with the business of mission and 

course, not might and conceit. 

Real leaders care about spirit. “This 

is the best work I have ever done in 

my life,” said a colleague who had just 

completed a difficult consulting project. 

What I witnessed was not the 

pride in his voice, but the lump in his 

throat and the emotion in his eyes. 

Chores extract toil, but causes unearth 

spirit. Real leaders care less about toil 

and more about spirit. They see spirit 

as a light that can easily go dim and 

view their role as helping associates 

keep the rheostat turned up. They do 

this by constantly reminding them of 

the cause and by personally demonstrating 

passion about that cause. 

Great leadership comes from creating 

a remarkable experience for associates. 

Real leaders know that if they 

constantly give employees their best 

enthusiasm, zeal will be the response. 

Real leaders invite passion. “You are 

Interstate Hotels and Resorts,” said 

Vice President Jill Kallmeyer at her 

recent all-managers conference. “So 

take personally every encounter with 

every guest and every associate.” Jill is 

renowned for her passion for the 

employees and customers. Real leaders 

look for ways to add value “to every 

encounter.” Instead of shouting an 

order, they inspire with a story. Instead 

of learning about customer experiences 

from a survey, they find out face to 

face and ear to ear. Instead of being 

quick to blame, they assume the best 

and avoid assumptions. They are 

myth-averse, preferring to unearth the 

facts, not rely on insinuations. Their 

“up close and personal” approach 

attracts passion for those around them. 

Margery Williams’ Velveteen Rabbit 

contains great lessons for leaders in the 

dialogue between the wise skin horse 

and naive rabbit. “Real isn’t how you 

are made,” said the skin horse to the 

rabbit. “It’s a thing that happens to 

you. It doesn’t happen all at once, you 

become. It takes a long time. That’s 

why it doesn’t often happen to people 

who break easily, have sharp edges, or 

who have to be carefully kept.” 

Realness comes through promoting 

others, not on preening self. 

LE 

Chip R. Bell is founder and senior partner with The Chip Bell 

Group. A renowned keynote speaker, he is the author of several 

best-selling books including Magnetic Service. 

www.chipbell.com 

ACTION: Be authentic. 



Development 

Growing Leaders 

Might there be a shortcut 

IT’S NATURAL TO MAKE DECISIONS USING 

mental shortcuts. While these shortcuts 

often save us time and yield 

good results, they can get us into a lot 

of trouble when selecting future leaders. 

Basing leadership succession decisions 

on gut instinct and mental 

shortcuts is a sure recipe for failure. 

Few organizations have succession 

management plans that support the 

development of future leaders. 

Succession planning needs to go far 

beyond choosing high-potential leaders. 

From our 2006 Leadership Forecast, 

we draw seven guidelines for success: 

1. Align leader success profiles with 

business needs. Development programs 

are most valuable when they 

develop leaders in ways that address 

your business needs. So, focus your 

HR programs on leader success profiles 

(e.g., competency models) that 

support the business model. For 

example, if the business strategy 

emphasizes creativity and innovation, 

leader success profiles should include 

behaviors that promote high employee 

involvement. We find that the top 

priorities selected by leaders are 

building customer relationships, controlling 

costs, leveraging talent, and 

maintaining or improving quality. 

Start with your business priorities as 

means for identifying what it means 

to be a strong leader. 

2. Accurately diagnose leader skills. 

We find that three out of ten leaders 

fail to demonstrate the skills and qualities 

necessary for success. Most leaders 

are good at bringing in results, but 

they are less capable at bringing out 

the best in their coworkers. After 

defining leader success profiles, organizations 

need to objectively measure 

leadership capacity. Doing so will produce 

an assessment of strengths and 

development needs. Methods such as 

360-degree assessments, roleplays, and 

in-basket exercises provide a wealth of 

information for development. Also 

assess leaders online and through vali- 

by Paul Bernthal and Rich Wellins 

dated personality assessments. 

3. Base selection and promotion 

decisions on skills and motivation to 

lead. Many decisions to promote individuals 

into leadership positions are 

based on their performance. Past performance 

is a good predictor of future 

performance; however, individuals 

promoted into leadership roles often 

face a different set of job demands for 

which their past performance is not a 

reliable predictor of future success. 

The two most common reasons for 

leader failure are poor interpersonal 

skills and personal qualities. Leaders 

are typically promoted based on their 

ability to get results, but they lack the 

rest of the package to back it up. 

When making internal promotions, 

you need to assess skills relative to the 

job in question. Assessing the candidate’s 

personality and motivation to 

lead can help you predict the person’s 

success in his or her new role. Use 

testing, assessment, or other measure 

of skills in developing leaders. 

4. Identify leader potential early. The 

demand for strategic leaders is outgrowing 

the supply, meaning you need 

to identify and invest in people with 

the greatest potential for growth as 

strategic leaders. It will become more 

difficult to find new senior leaders in 

the next five years. Few organizations 

effectively identify high-potential leaders 

early in their careers. An effective 

identification process focuses on the 

hard-to-acquire skills, traits, and abilities 

that characterize people who will 

grow into strategic leaders capable of 

driving performance. 

5. Win the support of senior management. 

Many senior leaders have come 

to realize that their leadership strength 

provides a competitive advantage. 

When asked about their top priorities, 

senior leaders selected “retain, 

improve, and leverage talent” as their 

most important priority (ranking above 

growth and controlling costs). The role 

of senior leadership in leveraging talent 

is critical when considering succession 

management programs. 

Three factors determine the quality 

of succession management programs: 

1) involvement of the CEO (or senior 

leader); 2) involvement of line management 

to identify and develop candidates; 

and 3) collection of objective 

assessment data regarding employees’ 

current performance and readiness/ 

potential. Senior leaders need to mentor 

others, scout talent, and hold others 

accountable for developing talent. 

6. Include “learning by doing” options. 

In the past, designing and implementing 

development programs was fairly 

straightforward. Today, leader development 

has moved away from traditional 

training programs to ones that 

take the learner out of the work environment. 

The most effective development 

efforts include special projects 

and assignments where learners can 

receive feedback when trying out new 

approaches and skills. Formal training 

and workshops are the most common 

development resource, but they are not 

the most valuable resources for 

improving leader skills. 

7. Ramp up the role of coaches and 

mentors. The challenges confronting 

leaders today are complex. The impact 

of these forces on the lives of leaders 

has been dramatic—thus, the growing 

need for coaches and mentors who can 

provide individualized direction to 

help leaders identify their needs, focus 

their behavior, and overcome obstacles. 

The specialized attention of a coach 

provides leaders with an individualized 

diagnosis of needs, feedback, 

development planning, one-on-one 

training, and tracking of results. The 

leaders who have used a coach or mentor 

find it valuable. Clearly, coaches 

and mentors have a critical role to play 

in the development of leaders. 

By following these seven practices, 

you avoid shortcutting your success.LE 

Paul Bernthal manages DDI’s Center for Applied Behavioral 

Research. Rich Wellins is a Senior VP at Development 

Dimensions International (DDI), a global HR consulting firm 

specializing in leadership. www.ddiworld.com 

ACTION: Follow these seven guidelines. 


Competency 

Dimensions 

You Can’t Win at 

Golf with One Club 

Effective leaders excel in five dimensions. 

IMAGINE THIS SCENE: TIGER WOODS 

arrives for the Masters with only a 

driver in his golf bag. When asked, 

“Where are your other clubs” he 

replies, “Well, my driver is my 

favorite club, and I figured I could 

just use it for all my shots.” 

Many executives and leaders use 

the same logic when leading their 

teams; they use a single approach to 

leadership—a command-and-control 

style being the “club of choice.” Most 

still buy into the myth: there’s one 

right way to lead for all situations. 

This article reveals five key dimensions 

that leaders need to master. 

Since IT, speed-to-market cycles, 

higher employee education, and cultural 

changes have rendered the command-and-control 

approach far less 

effective, we propose that executives 

try other clubs—such as servant leadership, 

visionary leadership, and 

coaching. There is no one right way to 

lead that works in all situations. Relying 

on any one approach is like trying 

to win at golf with just one club. 

We define effective leadership as 

achieving desired results through 

people’s willing participation. 

Effective leaders use five key leadership 

approaches or dimensions: 

Dimension 1. Commanding—taking 

charge. There are times when 

Commanding is not only acceptable, 

it’s desirable. We define Commanding 

as taking charge and seeking immediate 

compliance to quickly effect a desired 

result. The primary context in which 

this dimension is needed is a genuine 

crisis, particularly in turnaround situations 

or tragedies. In these circumstances, 

the need for quick decisions, 

combined with employee insecurities, 

call for a Commanding approach. 

Rudy Giuliani’s remarkable leadership 

during the days and weeks following 

9/11 are a powerful testament 

to the benefits of a Commanding 

es more problems than it solves. 

Dimension 2. Visioning—pointing 

the way. While you can command 

short-term compliance, you can’t command 

ongoing commitment. One 

powerful approach for fostering lasting 

commitment to excellence is 

through the skilled use of Visioning. 

As Peter Senge says, “Few, if any, 

forces are as powerful as shared 

vision.” Visioning involves creating and 

effectively communicating a clear and 

compelling picture of a worthwhile vision 

for the group. Visioning is particularly 

important in times of change. 

For example, when Scandinavian 

Airline Systems (SAS) was experiencing 

a significant loss in profitability, 

CEO Jan Carlzon employed various 

means to create a new passion around 

the vision of delivering outstanding 

customer service each and every time a 

passenger had contact with the airline. In 

a single year, SAS turned a $20 million 

loss into a $54 million profit! The airline 

went on to garner several awards 

and, in Carlzon’s words, “The new 

energy at SAS was as a result of the 

20,000 employees all striving toward a 

single goal every day.” 

Visioning is also vital in keeping 

people focused on long-range goals, 

sustaining motivation, and tapping 

into people’s deepest motivations for 

performing with excellence. Visioning 

is the leadership club that senior leaders 

use most often. 

Dimension 3. Enrolling—getting 

buy-in. Margaret Wheatley states, 

“People only support what they create.” 

Enrolling involves creating buy-in 

and commitment by genuinely seeking 

input or employing democratic decisionmaking 

processes. A skilled use of 

Enrolling fosters high employee commitment 

and leads to high quality 

decision-making and production. 

The history of Harley-Davidson provides 

a powerful example of the benefits 

of Enrolling. While Commanding 

had brought the company back from 

the brink of bankruptcy, Enrolling sustained 

and improved their performance. 

Harley’s senior management 

team began to elicit the ideas, concerns, 

complaints, and dreams of all its 

employees to foster continuous 

improvement. The ensuing results at 

Harley—sustained profits and 

renewed market leadership—speak to 

the power of Enrolling. 

Enrolling involves eliciting, implementing, 

and recognizing employee 

ideas as well as facilitating consensusbased 

decision-making. When he startby 

Scott Campbell and Ellen Samiec 

approach during difficult days. 

Although Giuliani had been at his 

lowest ebb in opinion polls just prior 

to the attack on the Twin Towers, his 

reputation was salvaged (he even 

won Time’s Person of the Year award) 

due to his strong leadership in its 

aftermath. His efficiency, aura of 

authority, rapid-decision making, 

inspirational words, and compassionate 

actions toward the victims and 

their families fit perfectly the needs of 

the moment. The strength of his 

Commanding approach allayed people’s 

fears, renewed their hope, and 

gave them an emotional anchor. 

When the circumstances are dire— 

during turnarounds and tragedies— 

people look for Commanders. As Faye 

Wattleton says, “The only safe ship in 

a storm is leadership.” Extreme crises, 

such as impending bankruptcy, extreme 

and rapid loss of market share, or natural 

disasters or tragedies, require a 

swift, definitive, Commanding style of 

leadership. We need the determination, 

decisiveness, and toughness of 

the “Crisis Conqueror” in such circumstances. 

Unfortunately, many leaders rely 

on Commanding in non-crisis contexts, 

resulting in low morale, high 

turnover, and mediocre performance. 

Many executives fail to see any connection 

between these conditions and 

their command-and-control approach. 

Using a commanding style of leadership 

when the situation doesn’t call for it caus- 


ed leading IBM, Lou Gerstner drew on 

the wisdom of his senior team in 

reaching a new strategic direction. 

Gerstner acknowledged that he needed 

his senior team to fill in the gaps in 

his understanding of the IT sector. His 

capacity to draw out their best insight 

and thinking was critical to the plan 

that guided IBM’s turnaround. 

Dimension 4. Relating—creating 

harmony. We define Relating as creating 

and sustaining strong relationships 

between you and staff members, and 

among staff members, with the goal of 

creating harmonious working relationships 

characterized by mutual trust, 

respect, and goodwill. The use of 

Relating has positive payoffs. 

Mike Abrashoff’s leadership as 

Commander of the USS Benfold, an 

awe-inspiring, guided-missile Naval 

destroyer, provides an example of the 

skillful use and practical benefits of 

Relating. Under his leadership, the 

Benfold went from having one of the 

worst retention rates in the Navy to 

100 percent re-enlistment, and having 

one of the worst states of combat 

readiness to winning the coveted 

Spokane Trophy for best combat readiness 

in the fleet. Abrashoff attributes 

this success to the emphasis he placed 

on his relationships with the crew. 

Abrashoff learned the names, family 

history, and personal story of every 

one of his 310 crewmembers; instilled 

a sense of each member’s personal 

importance to him, regardless of their 

rank; and attended to issues of harmonious 

crew relationships and 

potential discrimination. The Relating 

dimension creates and sustains positive 

relationships. 

Dimension 5. Coaching—developing 

people. This dimension focuses on developing 

people’s potential and performance 

while aligning their goals and 

values with those of the organization. 

Coaching is a key dimension for 

sustaining employee motivation, 

increasing retention, developing talent, 

and expanding the leadership base 

within the organization. 

Just as great golfers use all the clubs 

at their disposal, so too great leaders 

use all five leadership dimensions— 

the choice of dimension governed by 

the context and desired outcomes they 

wish to achieve. That is the real key to 

achieving desired results through people’s 

willing participation. 

LE 

Scott Campbell is a speaker, author, consultant, and Director of 

Training, and Ellen Samiec is the Director of Coaching for 5D 

Leadership. They are co-authors of 5-D Leadership (Davies- 

Black). www.5DLeadership.com, stories@5Dleadership.com 

ACTION: Exercise these five dimensions. 

Performance 

Failure 

Why CEOs Fail 

I see nine reasons. 

by Glenn Waring 

FOR THE PAST 12 YEARS, 

I’ve worked with 

hundreds of CEOs and 

noted a positive side to failure. 

Successful people fail more frequently 

than others because they make more 

attempts. Successful CEOs learn to 

take risks and take losses in stride. So, 

one answer to “why CEOs fail” is 

“because they know that calculated 

risks are necessary to succeed, and 

such ventures will involve failure.” 

Failures teach successful CEOs; 

and, over time, nine lessons seem to 

account for most of the learning: 

1. An inability to see the bigger picture. 

If you’re being eaten by a lion, it’s 

tough to see the lion. Some pressures 

are industry-wide, even 

global, and the CEO may 

have to divest a core business 

to succeed (John Teets 

revamped Greyhound by 

selling the buses). This is 

difficult, and it is why so 

many successful CEOs surround 

themselves with 

good peers and mentors. 

2. An aversion to using 

solid financial practices. A 

CEO I know once shared 

with me that he didn’t pay enough 

attention to financials before he saw 

his publicly traded company forced 

into bankruptcy. The reason, he said, 

was that the numbers would simply 

“swim together,” overwhelming his 

discomfort with financial indicators. A 

CEO first has to see a compelling need 

to learn how to avoid going broke. 

3. A lack of clear vision. Successful 

CEOs lead the organization to where it 

needs to be, and find ways to get buyin 

at all levels. This is hard—otherwise, 

all organizations would do it 

well. Done right, clear vision can substitute 

for the field manual, empowering 

everyone to make crisp decisions 

in the company’s interest. 

4. Lack of passion. Most organizations 

no longer need arms and legs (command 

and control); instead, they need hearts 

and minds (sell and enroll). People 

need to be led more than they need to 

be managed. A lack of passion is usual- 

ly burnout, which comes from solving 

the same problem over and over. 

When things aren’t going well, CEOs 

need to face the difficult task at hand. 

Successful leaders know themselves, 

seize opportunity, and pursue meaning. 

When I see a lack of passion in 

otherwise successful CEOs, I gently 

suggest that they revisit personal core 

beliefs. The questions of Who am I and 

Why am I here beg to be answered, and 

if urgent tasks continually pull you 

away from considering these questions, 

burnout and depression may be 

the result. Passion matters, greatly. 

5. Lack of clarity on the reasons for 

success. Great CEOs hold their associates 

accountable for knowing what 

activities cause results. CEOs focus on 

what to do, and let associates take care 

of the “how.” Then, associates regularly 

monitor the activities that lead to success. 

For a sales manager this might 

mean counting and posting the number 

of cold calls and referrals every week, 

in addition to the actual sales results. 

Champions win consistently because 

they understand what causes a win. 

Successful CEOs foster 

innovative methods for 

getting work done before 

they let their associates 

take care of the “how.” 

6. Distractions such as 

acquisitions. Successful 

CEOs pay attention to the 

central task—putting 

the organization in 

touch with reality, and 

leading with clear focus. 

7. Disconnecting from 

customers. Some of my most successful 

CEO clients are on the road over 

half the time, talking to customers. 

8. Disconnecting from employees. 

The best leaders find ways to keep in 

touch with their employees, not only 

because they’re genuinely interested in 

their lives, but also because they realize 

there’s great knowledge in the ranks. 

9. Integrity outages. I’ve heard 

many people complain about leadership 

that says one thing and does 

another. Associates will tolerate no 

more than about three inconsistencies 

before they start to tune out. 

My CEO clients teach me every day 

what it means to be decisive and fully 

engaged in life. I’m certain of two things: 

Confusion is a precondition to learning, 

and losses accompany success. LE 

Glenn Waring is President and CEO of EffectiveOrganization.com. 

waringg@EffectiveOrganization.com, 888-299-2395 

ACTION: Take risk and learn from failure. 


National 

Human Capital 

Summit 

Conference & Expo 

Chicago Marriott Downtown Hotel 

Workshops: April 5, 2006 

Conference: April 6 - 7 , 2006 

The Most Important Human 

Capital Event of the Year 

Dr. Richard Florida 

Hirst Professor, School of Public Policy at George Mason 

University and Author of “The Rise of the Creative Class” 

Rich Karlgaard 

Publisher of Forbes Magazine and Author of “Life 2.0” 

Dr. Noel Tichy 

Professor, University of Michigan and Author of 

“The Leadership Engine” and “The Cycle of Leadership” 

Dr. Peter Cappelli 

George W. Taylor Professor of Management and Director, 

Center for Human Resources, The Wharton School 

Dr. Roger Martin 

Dean, Rotman School of Management, University of Toronto and 

Author of “The Responsibility Virus” 

Dr. Sydney Finkelstein 

Professor, Tuck School of Business at Dartmouth and 

Author of “Why Smart Executives Fail” 

Dr. Philippe Baumard 

Professor, Strategic Management, Haas School of Business and 

Author of “Managing Imaginary Organizations” 

Dr. Jac Fitz-enz 

Founder, Saratoga Institute and Author of “The ROI of Human 

Capital” 

Register at 

www.humancapitalinstitute.org 

Dr. John Sullivan 

Professor of Management, San Francisco State University and 

Author of “Rethinking Strategic HR” 

Hubert St. Onge 

Principal, SaintOnge Alliance, and Noted Author 

Helen Handfield-Jones 

Co-author of “The War for Talent” 

To learn more please call us at 866.538.1909

Human Capital Institute New Benefits for 2006 

We’re excited to announce a series of new benefits for HCI 

Professional Members, to be introduced for 2006. HCI offers the 

opportunity to learn, share and grow your career with the most 

forward-thinking human capital and business leaders in the world. 

4 New Research Reports from Aberdeen Group (a $1,600 value) 

HCI Professional Members will receive four FREE Aberdeen 

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reports sell for $399 apiece, so your $199 membership investment 

will give you an 800% ROI with this new benefit alone! 

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Renew for 2006 and receive a monthly subscription to Leadership 

Excellence, HCI’s Journal of Human Capital and Management 

Strategy. Recent contributors to our exciting new magazine include 

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(Your ROI just increased to 900%) 

30 New Master’s Webcasts 

Each month in 2006, HCI will provide Professional Members with 

FREE access to live Webcasts featuring the world’s most prominent 

talent management and business strategy experts. This year, 

members will share the latest insights from Dr. Marshall Goldsmith, 

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Boudreau, Dr. Jac Fitz-enz, Dr. David Ulrich and many, many more 

160 New Webcasts and White Papers 

Professional Members can also tap into any of over 160 new 

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development and leadership. 

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HCI is building the most advanced electronic networking tools in 

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new toolset will enable you to tap your colleagues for information 

and answers, broaden your professional network and scale your own 

career brand. 

24 New Industry Talent Council 

Every industry vertical has a unique set of talent challenges. HCI’s 

new Industry Councils offer human capital professionals and line 

executives a neutral forum for comprehensively and cooperatively 

evaluating industry issues, opportunities and metrics. 

4 Global Summit Conferences 

Beginning with our inaugural Human Capital Summit in Chicago, 

April 15-17, HCI is planning a series of four Global events in 2006, to 

be held in North America, Europe, Asia and Australia. 

To learn more please call us at 866.538.1909 or log on to www.humancapitalinstitute.org

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Performance 

Failure 

Why Smart Executives Fail 

Take the time to learn from your mistakes. 

by Sydney Finkelstein 

SIX YEARS AGO, 

a research team at 

Tuck Business School 

launched an investigation into what 

drives the success or failure of chief 

executives. Our goal was not only to 

understand why businesses break 

down and fail, but to focus on the people 

behind these failures; not only to 

understand how to avoid disaster, but 

to anticipate the early warning signs of 

failure. We wanted to expose the roots 

of breakdown in a definitive way. 

Some answers were as surprising 

as the sudden fall from grace of many 

of the leaders we studied. In fact, 

many qualities that sound like the 

attributes of a dream enterprise turn 

out to be the basis for a nightmare. 

Many qualities we aspire to emulate 

turn out to be ones we are better off 

without. For investors, many signposts 

of “success” turn out to be 

markers for failure. Despite all that 

could go wrong, the real fiascos can 

be blamed on five causes: 

1. Choosing to ignore change. 

Companies that have been successful 

in the past often let their history and 

culture take over—a combination that 

closes down new ideas. When the 

mobile telephone business shifted 

from analogue to digital in the mid- 

1990s, for example, formerly dominant 

Motorola was slow to respond. 

Hence, Nokia became market 

leader—a position it still holds today. 

Motorola—along with Rubbermaid, 

Wang Labs, and General Motors—was 

fully aware of how the market was 

shifting but chose not to do anything 

about it. This finding calls for more openmindedness 

in companies, including 

open discussion of mistakes, negative 

feedback when warranted, and a culture 

that heeds three warning signs: 1) 

you can’t figure out why your competitors 

seem to be successful; 2) you 

focus on one element of the business 

at the expense of others; 3) you create 

excuses for why you don’t listen when 

your customers ask for something. 

2. Brilliantly fulfilling the wrong 

vision. The notion of strategic intent is 

straightforward: Focus on a clear, 

powerful goal that defines what victory 

would be for your company, marshall 

all resources in that direction, 

and never waver in your resolve. 

In principle, strategic intent is a 

powerful idea. In practice, people just 

seem to get in the way. What looks 

like a logical intent often breaks down 

when executives get caught up in “the 

one big idea” fallacy. For example, for 

the old advertising group Saatchi & 

Saatchi, being “No. 1” was the only 

acceptable outcome, leading it to make 

acquisitions where it had no capability. 

Here are three warning signs: 1) you 

have always used the same approach— 

it has worked in the past, and it will 

work again; 2) you have your customers 

figured out, as you have 

known what they wanted for years; 

3) you run your overseas business just 

as you run your domestic business—if 

it isn’t broken, you don’t fix it. 

3. Identifying too closely with company. 

While most investors and 

employees would like their leaders to 

be fully committed to their jobs, most 

egregious mistakes occur when executives 

are too closely connected to their 

companies. Such executives treat the 

company as an extension of themselves—and 

act accordingly. 

For example, Samsung’s chief executive 

Kun-Hee Lee decided to enter 

the automobile industry (a $3 billion 

mistake) simply because he liked cars. 

GM’s former CEO, Roger Smith, 

devised a plan to combat Toyota by 

embracing robotics. 

Here are three warning signs: 

1) your CEO identifies so completely 

with your company that there is no 

clear boundary between personal 

interests and corporate interests; 

2) your CEO devotes excessive time to 

fulfilling personal missions that do not 

benefit the company; and 3) your CEO 

tends to reinvest in initiatives that he 

or she favors, despite your inability to 

make those initiatives work. 

4. Exhibiting executive arrogance. 

Some executives are not only arrogant—they 

are proud of it. People 

who dealt with GM and IBM in their 

glory days remember the condescension 

with which these companies 

regarded everyone outside their ranks. 

Webvan, eToys, and most dotcoms 

made little secret of the disdain they 

had for traditional businesses. 

Cabletron, Motorola, and Wang 

believed they had the only technology 

worthy of being taken seriously. 

Here are three warning signs: 

1) your CEO believes that your company 

can do whatever it pleases because 

of its dominant position; 2) your CEO 

seems to disrespect competitors and 

suppliers; and 3) your CEO elevates 

PR over strategic considerations. 

5. Relying on past formulas for success. 

Executives often revert to harmful 

or inappropriate strategies as the 

result of a “defining moment” earlier 

in their careers. It’s usually the one 

thing they are most known for—the 

thing that gets them their subsequent 

jobs, the thing that makes them special. 

Once people experience this “defining 

moment,” they tend to let it define them. 

For William Smithburg of Quaker, the 

defining moment was his successful 

promotion of Gatorade. He then tried 

to repeat that behavior with Snapple. 

Here are three warning signs: 1) your 

CEO tends to make the same decisions 

repeatedly; 2) your CEO tends to shut 

down lines of inquiry that differ from 

his preferences; 3) your CEO seems 

unconcerned with all that could go 

wrong in his strategic initiatives. 

How often do we take the time to 

learn from mistakes People run organizations, 

and they are subject to biases, 

pressures, and misjudgements; yet 

the price they pay for these mistakes 

can be immense. If we do not learn, we 

are destined to fall into the same traps. 

Knowing why smart executives fail 

enables us to choose a different path.LE 

Sydney Finkelstein is the Steven Roth Professor of 

Management at the Tuck School of Business at Dartmouth. He 

is the author of the best-seller Why Smart Executives Fail, 

(Portfolio, 2003). He can be reached at 

sydney.finkelstein@dartmouth.edu 

ACTION: Heed the warning signs. 


Performance 

Culture 

Will Your Next Mistake Be Fatal 

Create a culture that learns from its mistakes. 

by Robert E. Mittelstaedt, Jr. 

WE ALL LIKE TO THINK 

that “yes, we 

make mistakes, but we 

learn from them and go on.” Unfortunately, 

individuals, teams and organizations 

rarely learn as much as they 

should from mistakes. Why are some 

leaders better at recognizing mistakes 

early, correcting them, and learning 

from the experience without major 

damage The answers are more consistent 

than you might realize. 

pounded by a denial of facts followed 

by attempts to cover up the truth 

while trying to fix the problem. 

Neither of these mistake chains was 

life-threatening for BP or AmEx, but 

both were wake-up calls. Mistakes are 

costly, and compounded mistakes 

have costs that rise exponentially. 

2. Strategy mistakes. Strategy mistakes 

exhibit similar patterns; however, 

strategy mistakes are more likely to 

be life-threatening and usually result 

from ignoring signals. 

For example, Kodak, a pioneer in 

digital technology, would not accelerate 

the killing of their chemical-imaging 

cash cow. Not until 2002, when 

Kodak film sales had the first yearover-year 

sales decline in history, 

did the board consider that 

change was inevitable. 

Kodak ignored the signals 

and chose to 

believe that film-based 

imaging would dominate 

the industry 

longer. Kodak’s acceptance 

of the digital revolution 

came late, but 

at least it came. This 

will save the company, 

but Kodak will never 

again be as profitable 

or as dominant. 

3. Cultural mistakes. 

Culture creates an 

environment that is 

conducive for either mistake creation 

or avoidance. 

Here are a few examples: 

• Johnson & Johnson. Almost 25 

years after the handling of the Tylenol 

poisoning situation, J&J is still the gold 

standard for a culture that stays 

focused on doing the right thing. 

• NASA. They exhibited the best and 

the worst of “we must get there,” 

despite signals that danger lurked in 

the wings (literally in the case of 

Columbia). The same culture that facilitated 

amazing accomplishments bred 

arrogance and reduced safety. 

• Enron. Modest success in the 

pipeline industry combined with easy 

money led executives to believe they 

were destined to greatness. The “we 

can do anything” culture that devel- 

Three Mistake Patterns 

Most mistakes are related to execution, 

strategy, and culture. Some are 

driven by individuals, but most really 

big blunders are team 

efforts. While the 

specifics differ, the patterns 

are similar. 

Consistent patterns 

include: ignoring warning 

signs; dismissing or 

rationalizing away certain 

data; failure to 

communicate; failure to 

seek assistance; disbelief 

of the serious 

nature of potential or 

unfolding consequences; 

and failure to 

take timely action. 

1. Execution mistakes. 

Execution mistakes occur when 

there are no or inadequate procedures 

developed in advance; a failure to follow 

established procedures; or a situation 

that no one has seen previously. 

Examples of execution mistakes include: 

• The March 2005 explosion at BP’s 

refinery in Texas City, Texas that killed 

15 workers, injured 170 others, and 

damaged the plant. To their credit, BP 

rapidly announced that the disaster 

was the result of a series of operational 

and planning mistakes. 

• The launch of the Optima card by 

American Express. AmEx had to write 

off $265 million because they assumed 

that AmEx customers would have 

fewer credit problems when allowed 

to carry a balance. This was not true. 

The assumption mistake was comoped 

became a corrosive force of 

destruction when ethical and legal 

lines were crossed in the quest for 

ever-greater accomplishments. 

• McDonald’s. The Golden Arches 

lost their luster when diversification 

and competitive distraction caused the 

company to lose sight of what had 

made them successful. Returning to a 

focus on the proper execution of the 

core business was required. 

Learn-From-Mistakes Culture 

Too few leaders study and learn 

from mistakes, but this painful exercise 

can be a source of power and competitive 

advantage. To learn from your 

mistakes and those of others, make the 

following commitments: 

1. Do not stop taking risks. This is 

the easiest way to avoid mistakes, but 

taking no action is often the biggest 

mistake of all, especially when it 

comes to strategy. 

2. Require analysis of mistakes and 

learning. Charge those involved in 

analyzing what happened and why, 

along with the learning points that 

need to be understood by others. 

3. Learn to recognize the pattern of 

mistakes. Prepare your people to recognize 

these patterns before a disaster 

happens. Train for different scenarios. 

4. Fly the airplane. Airplanes have 

crashed simply because of pilot distraction. 

When confronted with a 

potential crisis, ask, “What is the most 

important thing I should be doing” 

5. Establish and enforce standard 

operating procedures. A major cause of 

problems is the lack of standards or 

failure to follow standards that are set. 

6. Never ignore customer data. Your 

customers are your best market sensing 

mechanism. Ignore what they tell 

you at your peril. 

7. Create a culture with a purpose. 

Most cultures develop by accident. 

Those that are designed to accomplish 

a purpose are more effective. Does 

your culture do what you want it to 

8. Understand economic forces and 

laws. Industry economics change over 

time. Track your likely future economic 

environment. You can’t violate the 

laws of economics for long. 

You will make mistakes—if you 

don’t, you are not taking enough risks. 

But you can make fewer of them, catch 

them early, and learn from them. LE 

Robert Mittelstaedt is dean, W. P. Carey School of Business, 

Arizona State University and author of Will Your Next 

Mistake Be Fatal (Wharton School Publishing) from which 

this article has been adapted. Robert.Mittlestaedt@asu.edu 

ACTION: Assess your culture. 


Performance 

Productivity 

21st-Century Structure 

Get the best from your professional knowledge workers. 

ABOUT 50 YEARS AGO, PETER DRUCKER 

coined the term “knowledge 

worker” to describe people whose basic 

means of production was no longer 

capital, land, or labor but, rather, the 

productive use of knowledge. 

Today, these knowledge workers, 

or professionals, represent a high percentage 

of the employees in many 

companies. These talented people 

undertake most key line activities, 

innovate new ideas, and produce and 

manage the intangible assets that are 

the primary way companies create 

value and compete. And yet these 

people often find their work obstructed. 

Creating and exchanging knowledge 

and intangibles through 

interaction with their peers is the 

heart of what they do. Yet most 

squander endless hours searching for 

the knowledge they need—and coordinating 

their work with others. 

To boost the productivity of your 

professionals, you must modify your 

vertical structures to let different 

groups of professionals focus on clear 

tasks—line managers on earnings, for 

instance, and off-line teams on longerterm 

growth initiatives—with clear 

accountability. Then create new networks 

and marketplaces that make it 

easy for professionals to interact collaboratively 

and find knowledge. 

Four Design Principles 

You can build this new structure, 

reduce the complexity of interactions, 

and improve collaboration by implementing 

four design principles: 

1. Simplify the line structure. 

Clarify the reporting relationships, 

accountability, and responsibilities of 

the line managers who make good on 

earnings targets, for all other considerations 

will get short shrift until 

short-term expectations are met. 

Eliminate matrix and ad hoc structures 

that muddle decision-making 

authority and accountability. Narrow 

the scope of the line manager’s role to 

by Lowell L. Bryan and Claudia Joyce 

current earnings. 

Create an enterprise-wide governance 

mechanism for decisions that 

cross line functions—such as managing 

shared IT costs. Clarify the decision-making 

authority of each 

member of the senior leadership team. 

Take vital support functions, which 

demand focused management, out of 

the line structure, so that specialized 

professionals can run these functions 

as shared utilities. Defining roles consistently 

helps the people in those 

roles to interact and collaborate. 

2. Manage dynamically. Dynamic 

management—a combination of disciplined 

processes, decision-making 

protocols, rolling budgets, and calendar-management 

procedures—makes 

it possible to manage the portfolio of 

initiatives as part of an integrated 

approach. This forces leaders to make 

resource allocation trade-offs, explicitly, 

rather than allowing them to be 

made by down-the-line managers. 

Ongoing tasks—such as launching 

new products, building new businesses, 

or redesigning a technology platform 

—call for small groups of full-time, 

focused professionals with the freedom 

to discover winning value propositions 

by trial and error (deductive tinkering). 

Few line managers have the 

time or resources for such a discovery. 

Devote about 2 percent of spending 

and some of your best talent to developing 

longer-term strategic initiatives. 

Each major one should have a senior 

manager as its sponsor to ensure that 

resources are well invested. Once an 

initiative is ready to be scaled up, it 

can be placed in the line structure. 

3. Develop knowledge marketplaces, 

talent marketplaces, and formal networks 

to stimulate the creation and 

exchange of intangibles. These markets 

and networks help your professionals 

exchange knowledge, collaborate, and 

develop communities that create 

intangible assets. They not only minimize 

the search and coordination costs 

of professionals who exchange knowledge 

and other valuable intangibles 

but also maximize the opportunities 

for cost-effective, productive interactions. 

Moving into knowledge marketplaces, 

talent marketplaces, and formal 

networks will make all three more 

effective. A knowledge marketplace 

helps members of a network to 

exchange knowledge, which strengthens 

the network. A talent marketplace 

works better if the people who offer 

and seek jobs in it belong to the same 

networked community. 

4. Measure performance. Rely on 

measurements of performance (not 

supervision) to get the most from selfdirected 

professionals. Relinquish 

some supervisory control and let people 

direct themselves, guided by performance 

metrics, protocols, standards, 

values, and consequence-management 

systems. Accountable leaders must 

measure performance, even as their 

workers become more self-directed. 

What’s needed is inspired leadership, 

not more intrusive management. 

In terms of motivating desired 

behavior, measuring performance is 

more important than providing financial 

incentives to reward it. Tailor metrics 

to individual roles and people. Get 

the metrics wrong, and unintended 

behavior is the result. Create metrics 

that hold people individually accountable 

for their contribution to collective 

success—an idea we call holding people 

mutually accountable. 

A company that tries to simplify its 

structure without helping self-directed 

professionals to collaborate easily 

might increase its efficiency, but 

decrease its effectiveness. So, we invite 

you to design a new model, using new 

principles that take into account the 

way professionals create value. By following 

these principles, you will get 

more value, at less cost, overcome the 

challenges, and capture the opportunities 

of today’s economy. 

LE 

Lowell Bryan is a director and Claudia Joyce is a principal in 

McKinsey’s New York office. www.mckinsey.com 

ACTION: Boost your productivity. 


Ethics 

Responsibility 

Sometimes Less Is More 

Be sensitive to the subtle effects of power. 

WE SEEM TO BE OBSESSED 

with a particular view of what 

leadership entails, as exemplified in 

this quote about GM’s CEO: “Rick 

Wagoner’s aura envelopes the planet. 

His every move sends ripples around 

the globe. His every decision affects the 

actions of millions in countless countries.” 

This view of leaders as central 

figures, active, making decisions, and 

controlling outcomes persists in spite 

of Jim Collins’ description of more 

modest “level-five” leaders. 

Many positive benefits accrue to 

leaders from the belief that what they 

do matters a lot. First, if leaders are 

the central causal agents determining 

performance, then the enormous rise 

in corporate CEO compensation (to an 

average of about $10 million or 533 

times average salaries) is justified. 

Second, people tend to want to 

ascribe self-enhancing attributes and 

effects to themselves. When people 

believe they have been involved (even 

peripherally) in making a decision or 

creating a product or project, they 

believe the result is better as a way of 

justifying their involvement. 

For followers, there are also advantages 

from a belief in the potency of 

leaders, as it produces a sense that 

events are actually under the control 

of the leader. 

All of this might be a harmless halftruth—except 

that it affects what people 

in leadership roles do, the decisions 

they make, and their effects on others. 

by Jeffrey Pfeffer and Robert I. Sutton 

tion to help guide what their subordinates 

do. The best leaders make their 

presence felt. But surveillance makes 

people nervous and cause them to 

expend energy dealing with the monitoring. 

Too much control saps initiative, 

and surveillance undermines 

intrinsic motivation and the joy of 

mastering a task on one’s own. Sometimes 

getting out of the way of great 

people and letting them do their jobs 

is the best thing a leader can do. 

2. Bullying and self-centered behavior. 

People who get paid great sums 

compared to others, receive adulation 

in the press, and have their every 

whim catered to and their every word 

parsed are, unless they are extraordinary 

beings, likely to believe their own 

press and think of themselves as powerful, 

almost omnipotent, people. 

Power tends to distort the behavior of 

those in power, causing disinhibition 

and a lack of sensitivity to others. For 

instance, people in powerful positions 

are more likely to tease others, to 

stereotype those in less powerful positions, 

and to attend to their own needs 

without considering the effect on others. 

Descriptions of the behavior of 

former New York Stock Exchange 

CEO Richard Grasso and former 

Warnaco leader Linda Wachner detail 

acts of rage and vengeance that leave 

subordinates fearful and resentful. 

People who are fearful don’t take entrepreneurial 

or risky actions. People 

who feel stereotyped, abused, and bullied 

are not likely to be engaged in and 

motivated by their work. Turnover 

Six Harmful Effects 

Here we highlight some of the 

more harmful effects, which make 

placing too much faith in leaders and 

leadership a dangerous half-truth. 

1. Overcontrol and monitoring. The 

cultural stereotype of leadership and 

leader behavior produces many leaders 

who believe they ought to ask 

questions, provide guidance, give lots 

of positive and negative feedback, 

and provide information and direcgoes 

up. People will not expend effort 

for leaders they don’t respect. 

3. Inhibiting others from taking 

responsibility. Orpheus, the Grammyaward 

winning chamber orchestra, has 

been much studied because it operates 

without a conductor—it is musiciancentric 

rather than conductor-centric by 

design. Ronnie Bauch, managing director 

of Orpheus, says that the conductorcentric 

or leader-centric organizations 

have many problems. One difficulty is 

that after a while, everyone pays attention 

mostly to the leader—who is, after 

all, in control. So, people stop listening 

as closely to each other. They stop hearing 

suggestions that don’t come from 

the top. Hence, they lose a lot of information 

and wisdom. 

Second, there is a bad dynamic in 

which leaders take on responsibility, 

others cede responsibility to leaders, 

who in turn take on more responsibility, 

which leads others to cede even 

more control and responsibility, and 

the cycle continues. In Orpheus, without 

a conductor to make all the decisions, 

people are compelled to learn 

how to do public relations, fundraising, 

programming, hiring, and other 

things usually left for the leader to do. 

By contrast, in places with strong leaders, 

people tend to cede decisions and 

activities to that leader—why bother 

making suggestions or taking on tasks 

if you will be overruled or if the task 

will get redone by the leaders 

Third, because people take on fewer 

tasks and try to influence fewer decisions 

in the presence of dominant leaders, 

they obviously don’t learn as 

many things or as well. Practice and 

experience, coupled with knowledge 

and training, are the best teachers. 

Without engaging in fund raising or 

public relations, without feeling 

responsible for making decisions, people 

don’t engage in these activities 

and, as a consequence, don’t learn how 

to do things nearly as well. 

What’s a Leader to Do 

Effective leaders do four things: 

1. Act and talk as if they are in control 

and project confidence about the 

future. When Steve Ciesinski was CEO 

of the resume-processing software 

company Resumix, the company had 

to redesign its product even while 

maintaining the commitment of its 

customers and keeping its employees 

during the dot-com boom. Although 

the company faced many challenges, 

Ciesinski always told the truth and 

provided a path and program for the 


company that offered some assurance 

of a successful future. The company 

was eventually sold to HotJobs at a 

good price, because of the confidence 

that Ciesenski projected. 

2. Take credit and blame. When 

Gary Loveman, CEO of Harrah’s 

Entertainment, made a bad decision 

about the company’s health insurance, 

he went around the company telling 

everyone that the decision was his, 

that he knew the decision caused 

employees expense and inconvenience, 

and that he would fix it. His 

behavior serves as a role model for 

accepting responsibility, for admitting 

mistakes, and for letting people know 

that bad outcomes can be fixed. 

3. Know when to get out of the way. 

Leadership does involve getting things 

done through and with other people. 

Being too ubiquitous, too much in control, 

causes problems. If you tell everyone 

what to do all the time and monitor 

their every action, why bother hiring 

talent The best way to train yourself 

to get out of the way is to have lots of 

direct reports. This guarantees that 

you can’t possibly oversee each one 

too closely. Hire people who can do 

their jobs without close supervision. 

When you have talented people, you 

don’t need to do their work for them. 

4. Be sensitive to the effects of 

power on the powerholder. Knowing 

that power causes people to do weird 

things, shrewd leaders mitigate this 

tendency. Some, like George Zimmer, 

CEO of the Men’s Wearhouse, have 

advisors, including people in the spiritual 

community, who keep them centered. 

Others avoid the perquisites of 

power such as private dining rooms 

and reserved parking, and associate 

more with front-line employees to 

keep in touch. Some embrace the 

ideals and behavior entailed in servant-leadership, 

the idea that the best 

leaders have customers they need to 

satisfy—the people who work for 

them—and that leaders succeeds only 

to the extent that their people thrive. 

Understanding the effects of leader 

behavior can help senior managers 

avoid dangerous half-truths, build 

more effective organizations, have 

more satisfied and fulfilled employees, 

and have more fun themselves. LE 

Jeffrey Pfeffer is the Thomas D. Dee II Professor of OB at the 

Graduate School of Business at Stanford University and 

author or co-author of 11 books including The Knowing- 

Doing Gap. Robert I. Sutton is Professor of Management 

Science and Engineering in the Stanford Engineering School. 

They are coauthors of Hard Facts, Dangerous Half-Truths, 

and Total Nonsense (HBS Press). 650-723-2915, 

Pfeffer_Jeffrey@gsb.stanford.edu 

ACTION: Practice these four behaviors. 

Culture Design 

Culture 

by Design 

Or is yours by default 

by Jack Daly 

YOU CAN SMELL A 

culture. How does 

your culture smell 

Does it smell good, or does it stink 

Do you have a culture by design, or by 

default At times, it can be difficult to 

identify your culture, since you are 

part of it. Spend 30 minutes at a company, 

and you can describe the culture. 

Every company has a culture, so 

identify the key factors you seek and 

manage them accordingly. 

When I think of leaders and culture, 

Herb Kelleher and Jack Welch come to 

mind. In Southwest Airlines 

and GE, we have two companies 

where the leaders 

established a culture and 

worked to ensure it permeated 

the enterprise. While 

both leaders and companies 

were effective in establishing 

their respective cultures 

and delivering solid bottom-line 

results, their cultures 

were different in 

design. But, designed they 

were. Culture headliners at Southwest 

have been fun, empowerment and teamwork. 

At GE, we see training and communication 

as the headliners. 

Companies that “manage their cultures 

well” over time consistently outperform 

companies that don’t. Revenues 

increased 682 percent vs. 166 percent; 

stock prices increased 901 percent vs. 

74 percent; net income increased 756 

percent vs. 1 percent; job growth 

increased 282 percent vs. 36 percent. 

I’ve identified three ingredients of 

their business successes: vision, key 

people in key spots, and culture. 

Five Design Mandates 

Here are five ideas to jump-start 

your design of a winning culture. 

1. Be who you are. Winning cultures 

reflect who the leader is and the company’s 

core values. A shared mission 

and values can be liberating—empowering 

your associates with confidence 

and trust to make the right decisions. 

If people have to refer to a manual to 

make daily decisions, you hamper service 

and lengthen the sales cycle. 

2. Training should be an integrated 

process. Training is an inside job—not 

something to be abdicated to an outside 

provider. While an outside firm 

can provide clarity of direction, help 

to design the training process, and 

provide for interval course correction, 

the ultimate day-to-day responsibility 

for training rests inside the company. 

3. Recognition systems—don’t leave 

“thanks” to chance. Put systems in 

place to ensure regular recognition. 

Imagine an outsider asking your associates, 

“By a show of hands, how 

many of you are ‘overly recognized’” 

People are starving for recognition, 

and the recognition doesn’t need to be 

heavily weighted financially. In fact, 

one of the most powerful recognitions 

is the age-old handwritten note. 

4. Communicate. Knowledgeable 

companies communicate, and they do 

it proactively and consistently. 

Howard Schultz, Chairman of 

Starbucks, is constantly 

reminding the company 

that even though it is big 

and successful, that does 

not mean Starbucks can’t 

execute each cup of coffee 

better. Share the news and 

realize that communication 

involves both talking 

and listening. 

5. Recruit and hire the 

best—and start them right. 

Think “culture first, experience 

second.” You can train people 

in the business; however, attempting 

to retrofit people into a culture is a 

Herculean challenge. Invest considerable 

time in the recruiting and screening 

process, as opposed to just filling 

an empty seat. Once you find the winning 

hire, implement an orientation 

plan so that the new hire isn’t just 

thrown to the wolves, or ignored. 

Create a work environment that is 

challenging, satisfying, and fun. 

Storytelling-can be the most effective 

tool to ensure the culture message resonates. 

People often forget concepts, 

but remember stories. So, spend more 

time sharing stories that underscore 

your desired culture. Stories are simple, 

timeless, and memorable. 

What percent of your time is spent 

on designing and implementing your 

culture Don’t rush to the urgent at 

the expense of the important. LE 

Jack Daly is an executive coach, speaker, and the author of several 

books. www.professionalsalescoach.net 

ACTION: Design your winning culture. 



Power 

Power and Influence 

Decipher the language of leadership. 

by Judith E. Glaser 

POWER IN THE WORKplace 

has traditionally 

been defined as 

force, dominance, assertiveness, 

strength, invincibility, and authority. 

As we observe others rise to higher 

levels of leadership, we ask ourselves 

“How do they do it” Our observations 

can easily lead us to conclude 

that the most powerful (most dominant) 

make it to the top and that the 

rule of thumb is that to rise to a leadership 

position, we must bring into 

play our behaviors of force, dominance 

aggression and strength. 

However, power and leadership 

are being redefined. No longer are we 

comfortable equating leadership with 

force, and power with dominance. In 

forward-thinking corporations, power 

is shifting from I-Centric to We-Centric, 

and this shift requires a commitment 

and a plan of action. 

Throughout history, leadership has 

been critical to performance, to success, 

and to the greater good. The 

“leader” is often perceived as a solitary, 

charismatic figure, similar to a 

movie star. People behind the scenes 

are often not acknowledged, despite 

the fact that all play critical roles! 

Who of us wants to be the actor on 

stage and who wants to be behind the 

scenes Who of us sees ourselves leading 

initiatives to successful conclusions 

We each must choose our roles. 

The distinction between the leader 

and others is not a gender distinction. 

Women can rise to leadership positions, 

as long as they understand how. 

In the movie 9 to 5, administrative 

assistants are initially intimidated by 

their boss’s arrogance and allow him 

to take credit for work they accomplished. 

The women finally ban 

together to create a force he is unable 

to reckon with. They take over their 

workplace and create an environment 

in which they and others thrive. 

In Working Girl, Melanie Griffith 

plays an administrative assistant to a 

female boss, who steals her ideas and 

presents them to impress a business 

partner. When her boss falls on a ski 

slope, Melanie moves into position to 

represent her idea in her most charming, 

tactful way, and to show her boss’s 

true deceptive colors in a public forum. 

All of us, both men and women, 

face similar challenges every day: How 

to bring our leadership ideas, voice and 

talents into the world without stepping 

all over others How to exercise 

our talents in a world with other talented 

executives through fair and honest 

interactions and dynamics, without 

one-upping, stepping all over each 

others’ toes, deceptively undermining, 

intimidating, taking credit from 

other’s success, or self-promoting. 

Dominance and Submission 

In the climb up the ladder of leadership, 

we need to find ways to move 

up to the next level. How we influence 

others along the way will determine 

how we climb. How do we use our 

power and influence in ways that create 

support around us 

Learn how to positively influence. 

The meaning of influence ranges from 

the dominant and authoritative, to the 

more important and significant. At one 

end, it is being influential because of 

“fear.” At the other end, it is being 

influential out of recognized importance, 

significance, and contribution to 

the greater good. To be recognized as 

important—to have others see our talents 

and reward us—is the challenge 

that we all face in the rise to the top. 

How can women get recognized 

Why do women have more difficulty 

making it to the top Women have as 

much ambition as men. On the rise to 

the top, however, women tend to 

experience more obstacles along the 

way, and over time their ambition is 

diluted, obfuscated, and mitigated. We 

give-up and give-in—since fighting for 

what we want gets exhausting. When 

the obstacles feel like they are too big 

to overcome, we look for other 

avenues to fulfill our dreams. We leave 

and tell ourselves it’s just not worth it. 

Men get rewarded and chosen more 

often because men have a more dominant 

voice. Women start careers with 

the same level of ambition, yet 

encounter forces that challenge their 

strength and tenacity to make it to the 

top. One challenge comes from the 

hardwiring differences of men and 

women—how each responds when 

something they desire is taken away. 

Men and women respond differently 

when they face the loss of a desired 

object—a job, a car, a paycheck, a promotion, 

or a project. When something 

men desire is taken away, they tend to 

become more aggressive and go after 

what they want. Males are more dominant 

and will go into fight behaviors 

more easily and quickly than females. 

Females are more submissive in the 

face of loss. They may respond by crying, 

calling for someone to come to 

them. The female instinct is bonding. 

Rather than turning to their aggressive 

responses, women are more inclined, 

when a desired object is removed, to 

want others to comfort them. The pejorative 

labels of submissive, acquiescing, 

unassertive, deferential, and meek are 

often given to women. 

These are both truths and stereotypes, 

yet we are influenced by these 

beliefs. The challenge of women rising 

to positions of importance remains our 

power-puzzle to be worked out. 

Here are some guidelines: Create a 

feedback-rich culture to establish healthy 

relationships. Make beliefs transparent. 

Create communication signals to move 

forward together in a healthy way. 

Shift from an I-Centric to We-Centric 

behavior and mindset. Emotional IQ: 

Self-awareness and self-management. 

Collaborative IQ: Ability to build 

mutually beneficial relationships with 

others. Innovative IQ: Making the 

future health and success of the enterprise 

the center of attention 

Avoid potential de-railers: Failure to 

manage your bio-reactive behaviors; 

failure to build mutual relationships 

with others; and making you the center 

of attention. 

LE 

Judith E. Glaser is CEO of Benchmark Communications, Inc. 

and author of Creating WE (Platinum Press, 2005), selected 

as one of the best business books of 2005 and The DNA of 

Leadership. www.creatingwe.com, 212-307-4386 

ACTION: Assess your use of power. 


Competence 

Learning 

Learning Organizations 

W h a t d o t h e y r e a l l y d o 

by Warren Wilhelm 

FOR YEARS WE’VE BEEN 

using the term 

“learning organization,” 

without being sure exactly what 

it means or how to create one. 

Learning organizations, and the 

people in them, learn constantly from 

everything they do. They use their 

own experience and that of others to 

improve their performance. They 

learn from their successes, and failures. 

Continuous learning is systemically 

built into the DNA and 

infrastructure. The value of continuous 

learning is espoused, driven, and 

role-modeled by the CEO and senior 

management. Every member knows 

that continuous learning is expected 

and will be rewarded. 

In a learning organization, communication 

is open and widespread; people 

at all levels are included in most 

communications because it’s assumed 

that everyone “needs to know.” 

Further, senior leaders show that they 

are learning constantly by communicating 

what they are learning as they 

learn. People are rewarded for learning—with 

recognition, growth jobs, 

promotions, and financial compensation. 

And, people who don’t learn are 

managed out of the organization. 

Competitive Advantage 

To be a learning organization provides 

competitive advantage. LOs are 

superior competitors. They have 

superior brand equity. They attract 

and retain the best talent. 

With such advantages, many organizations 

strive to be LOs. However, 

becoming and sustaining a LO 

requires a lot of work, dedication, 

time, energy, and resources. Many are 

thwarted in their attempts by the 

press of daily work, inability to persevere, 

lack of support from the top, or 

lack of commitment to the idea. 

Yet, despite these obstacles, we can 

cite many examples of companies that 

have been true LOs for years, if not 

decades. Their long-term success is 

testimony to the value of continuous 

learning. Examples include: 

• General Electric. Their Crotonville 

learning center drives continuous 

learning by managers and other leaders, 

as they return to learn and teach at 

transitions in their careers. 

• Goldman Sachs. Their Pine Street 

learning center provides essential 

learning to a large segment of their 

managerial population. 

• Pizza Hut. They constantly invent 

and implement new technology; and 

recognizing the lifetime value of their 

customers, treat them as long-term assets. 

• Honeywell (AlliedSignal). As they 

apply Six-Sigma approaches, quality is 

constantly improved while costs are 

simultaneously decreased. 

• Microsoft. They successfully made 

the massive shift in mindset from 

desktop to internet when their marketplace 

changed. 

• Johnson & Johnson. Driven by their 

famous Credo, they constantly 

improve their products and invent 

new ones, always with the user at the 

center of their focus. 

• Apple Computer. They perceive 

unrecognized marketplace needs and 

create new products to fill them. 

• Toyota Motor. They use Lean 

Manufacturing and Continuous 

Improvement to make small but 

never-ending improvements in products 

and processes. 

• USA Today. They invented and keep 

reinventing publishing technology to 

move information colorfully and electronically, 

and to manage distribution. 

What’s common to these companies 

is their founding on basic principles 

and values, and their continuous 

learning to keep them thinking and 

acting ahead of the competition. They 

create new markets, new market 

approaches, new products, and greater 

customer value constantly. They never 

squander their market advantage by 

letting their competition think or act 

ahead of them. 

How Do We Do It 

So, if we want to create a true learning 

organization, how to do it First, 

the CEO or senior leaders must 

believe in the value of continuous 

learning. They must clearly communicate 

the value the organization places 

in learning by words and by actions. 

Senior leaders need to show how 

they continuously learn: personally 

conduct after-action reviews, review 

projects at key junctures, talk freely 

about what they are learning from 

outside, publicly question others 

about what they are learning, work to 

eliminate any resistance to learning 

that may appear, and stay open to 

learning, even when business conditions 

make it difficult. 

Structural enablers should also exist: 

• Create mechanisms for information 

transmittal and diffusion, such as brief 

reports, standup meetings, daily 

emails, and town meetings. 

• Reward people for using these 

mechanisms; discipline people for not 

using them. 

• Create central repositories of relevant 

knowledge. 

Some organizations have helped to 

imbed these structural enablers by 

creating the position of Chief 

Knowledge Officer (CKO). It is the 

role of this person to manage information 

by overseeing the flow of information 

coming in and assuring that it 

is directed to where it will be most 

useful. We most often see this role in 

intellectual capital companies, like 

consulting firms, whose basic products 

are essentially information. 

A CKO is different from a CLO. 

The CKO assures the collection and 

dissemination of information, while a 

CLO is responsible for members’ learning 

what is most useful to them at any 

given time. Both roles can be critical to 

maintaining a LO: 

The most successful LOs perpetuate 

their advantage by: 

• Encouraging people to collect information 

across all boundaries 

• Being sure that information is 

shared, not forgotten or hoarded 

• Encouraging casual information 

sharing as a way of organizational life. 


Advances in electronic media over 

the past decade or so have made this 

much easier. 

In the best learning organizations, 

all members are constantly involved in 

feedback loops. This means that they 

seek feedback from their colleagues on 

ideas they have or actions they’ve 

taken. They routinely give feedback to 

others; and also give “feedforward” 

ideas and suggestions to their associates 

on a regular basis. This dynamic 

activity assures that everyone is learning 

from everyone else all the time. 

Once a true learning organization 

has been created, continuous learning 

must become a way of life. It is baked 

into the culture. Once started, learning 

must not be allowed to slow down or 

stop. Examples of other learning organizations 

that have mastered continuous 

learning and product adaptation 

include Southwest Airlines, Intel, 

Cisco Systems, Wal-Mart, Charles 

Schwab, Disney, and Dell Computer. 

All of these companies were built 

on unique premises, and have flourished 

because they never stopped 

learning and moving forward into 

new frontiers related to their core 

premise. Other companies have not 

fared so well, largely because they 

stopped learning at some point: the 

American railroads (AmTrak), followers 

in the oil industry (Gulf, Amoco), 

Greyhound Bus Company, followers 

in the computer industry (RCA, GE, 

Compaq), the Great Atlantic and 

Pacific Tea Company (A&P), 

Woolworth, Kmart, and some department 

stores. Sadly, American auto 

makers have not appeared to learn 

from changes in their marketplace, or 

from the success of their non- 

American competitors. This lack of 

learning may prove fatal, unless they 

can “learn to learn” more efficiently in 

the future. Their plight provides us all 

with a model of why continuous 

learning is so critical, and what can 

happen if learning is ignored or not 

pursued vigorously enough. 

For all organizations, at some point, 

survival may depend upon becoming 

a learning organization! Efforts to 

move in that direction are never wasted, 

and in fact may help to guarantee 

the survival of ideas, products, and 

jobs for their members. 

LE 

Warren Wilhelm, former CLO for Amoco and AlliedSignal, 

conducts research on leadership, consults, and teaches at 

Thunderbird, the Garvin School of International Management, 

and SMU. He is the author of Learning Architectures: 

Building Organizational and Individual Learning. 

Warren@WilhelmConsulting.com 

ACTION: Plan how you can become a LO. 

Performance 

Growth 

Small Giants 

Be great instead of big. 

by Bo Burlingham 

SOONER OR LATER, 

every business 

leader must make an 

important choice that has to do with 

how far and how fast you want the 

company to grow. No one will warn 

you about it, or prepare you for it. 

Your banker, lawyer investor, or 

accountant will likely encourage you 

to grow as fast and as far as you can, 

and others will send similar signals. 

If you constantly hear about the 

need to grow or die, if every other 

company seems to be trying to get to 

the next level, if the only companies 

being celebrated, or even 

taken seriously, are the 

biggest or the fastest-growing, 

you may never even 

think about other options. 

You do have a choice, 

however, and the payoff for 

choosing the less-traveled 

path can be huge. It can 

affect every aspect of your 

business—from your relationships 

with the people 

you work with, to the control 

you have over your time and your 

future, to the impact you have on the 

world around you, to the satisfaction 

and fulfillment you receive from your 

work. For proof, look at the companies 

that I call Small Giants. 

Small Giants don’t fit comfortably 

into any of three normal categories: 

big, getting big, and small. Some are 

tiny; others are quite large. Most are 

growing, often in unconventional ways, 

but several have chosen not to grow at 

all, and a few have scaled back. 

Small Giants strive to be the best at 

what they do. Most have been recognized 

for excellence. They have all had 

the chance to raise a lot of capital, 

grow fast, do mergers and acquisitions, 

expand geographically, and follow the 

well-worn route of other companies. 

Yet they choose not to focus on revenue 

growth or geographical expansion, 

pursuing instead other goals. 

They usually remain privately owned 

and closely held or employee-owned. 

These companies share a certain 

quality. You can sense it as you walk 

around their facilities, see it on the 

bulletin boards and in the faces of the 

people, hear it in their voices, and feel 

it in the way they interact with one 

another, with customers, and with 

strangers. They have a buzz, a sense of 

excitement, anticipation, movement, 

purpose, direction, of going somewhere. 

They find themselves in sync 

with their market and with each other. 

Everything just seems to click. 

But what is that elusive quality Let’s 

call it mojo or charisma. When leaders 

have charisma, people want to follow 

them. When a company has charisma, 

people want to associate with it. 

Five Leadership Factors 

Where does their mojo come from 

The major factor is the influence of the 

leaders in five areas: 

1. They have clear ideas about why 

they are in business and what they want 

out of it. Clarity allows them to resist 

the pressures put on companies to grow 

in ways that their leaders 

may not want. 

2. They are passionate 

about what their companies 

does. Their passion is 

the driving force behind 

the company’s commitment 

to being the best. 

3. They build close ties 

with the communities 

where they do business— 

and not just by “giving 

back.” They hire locally, get 

involved with local schools, support 

other local businesses, serve on local 

boards, give to local charities, contribute 

to the community’s well-being 

and reflect its character. 

4. They develop intimate relationships 

between their companies and 

their employees, customers, and suppliers. 

People are treated with respect, 

dignity, integrity, fairness, kindness, 

and generosity. Relationships with customers 

and suppliers are built around 

personal, one-on-one connections. 

5. They keep their companies private 

and closely held. They know that 

they will be free to pursue their goals 

only if they aren’t beholden to outside 

shareholders, and so they don’t take 

their money. 

Small Giants’ leaders set high standards 

for themselves and companies.LE 

Bo Burlingham is an editor-at-large of Inc. magazine and the 

author of Small Giants: Companies That Choose To Be 

Great Instead of Big (Portfolio). www.smallgiantsbook.com, 

boburlingham@aol.com 

ACTION: Consider being a small giant. 


Competence 

Intelligence 


Practice resonant leadership. 

FOR THOSE BOLD ENOUGH TO LEAD, 

the challenges are immense. 

Globally, leaders are up against an 

unstable world with social systems 

that no longer meet the needs of families, 

communities, or nations. The 

changes baffle our sense of reason and 

ignite panic, anger, as well as impulsive, 

ineffective responses. Global conflicts 

now touch us personally. 

Let’s look at one leader who consistently 

meets today’s challenges. 

Whether cheering his basketball team 

or walking in the Student Union, Scott 

Cowen exudes enthusiasm. His path 

to being the inspirational President of 

Tulane University was the football 

field, covert operations as a U.S. Army 

Ranger, a doctorate, and then, becoming 

a professor and Dean at Case 

Western Reserve University. There 

Scott revealed a talent for motivating 

leaders to emerge from the ranks of 

research professors at the Weatherhead 

School of Management. He spent 

hours talking to executives about their 

future challenges. Then, he searched 

for people studying topics that held 

promise for these coming needs. 

Once found, he enticed these farsighted 

individuals to join the faculty 

by talking about possible research discoveries 

and programs. And he 

encouraged existing faculty to create 

concepts for research centers and 

development programs. He listened 

for insight, fed excitement about innovations, 

and asked people to develop 

the concepts with colleagues in circles 

of dialogue. While Scott guided them 

through the minefields of academic 

politics, they took the visible lead. 

In eight years, Scott inspired more 

than 15 faculty members to become 

leaders of programs that created new 

markets for the school, like the 

Executive Doctorate in management. 

Scott’s excellent leadership continues. 

He got everyone out of Tulane 

and moved to safety at least 12 hours 

before Hurricane Katrina struck. 

by Richard Boyatzis and Annie McKee 

Sustaining Resonant Leadership 

The men and women we call resonant 

leaders are stepping up, charting 

paths through unfamiliar territory, and 

inspiring their people. They are finding 

new opportunities, creating hope 

in the face of fear and despair. These 

leaders are moving people—powerfully, 

passionately, and purposefully. And 

they do so while managing the 

inevitable sacrifices inherent in their 

roles. They give of themselves, in the 

service of the cause, while also caring 

for themselves, engaging in renewal, to 

ensure they can sustain resonance over 

time. They are inspiring their people to 

reach for “impossible” dreams. 

Resonant leaders are in tune with 

those around them. This results in 

people working in sync with each others’ 

thoughts (what to do) and emotions 

(why to do it). Leaders who can 

create resonance are people who have 

developed emotional intelligence—the 

competencies of self-awareness, selfmanagement, 

social awareness, and 

relationship management. They act 

with mental clarity, not simply following 

a whim or an impulse. 

Emotionally intelligent leaders 

build strong, trusting relationships. 

They know that their emotions are 

contagious, and drive their people’s 

moods and performance. They know 

that while fear and anger may mobilize 

people in the short term, these 

emotions backfire quickly, leaving 

people distracted, anxious, and ineffective. 

They have empathy. They read 

people, groups, and cultures accurately. 

They inspire through passion, commitment, 

and concern for people and 

the vision. They cause those around 

them to want to move, in concert, 

toward an exciting future. They give 

us courage and hope, and help us to 

become the best that we can be. 

Resonant leaders blend financial, 

human, intellectual, environmental, 

and social capital into a potent recipe 

for effective performance. In addition 

to being great to work with, they get 

results. They know the market, technology, 

people, and organization. Resonance 

enables them to use this expertise 

in pursuit of performance and engage 

the power of all who work there. 

Even good leaders are finding it 

very difficult to sustain their effectiveness—and 

resonance—over time. Why 

They give of themselves constantly. 

When leaders sacrifice too much for 

too long—and reap too little—they 

can become trapped in the Sacrifice 

Syndrome. Leadership is exciting, but 

stressful. It is the science of power and 

influence—and power creates distance 

between people. Leadership is lonely. 

Leaders are often cut off from support 

and relationships with people. 

Our bodies are not well equipped 

to deal with this “power stress.” Over 

time, we become exhausted—we burn 

out or burn up. The constant small 

crises, heavy responsibilities, and the 

perpetual need to influence people can 

be such a heavy burden that we find 

ourselves trapped in the Sacrifice 

Syndrome and slip into internal disquiet, 

unrest, and dis-stress. When dissonance 

takes over, we suffer 

physically and emotionally, and our 

cognitive functioning is impaired. 

Dissonance becomes the default, and 

spreads quickly to those around us. 

To counter the Sacrifice Syndrome, 

leaders need to focus on renewal: 

attending to themselves and others by 

cultivating experiences that energize 

and reinvigorate. Three paths help 

leaders to create resonance and to 

restore and renew themselves—and others—mindfulness, 

hope and compassion. 

They reverse the negative effects of 

power stress. By attending to oneself, 

encouraging an optimistic vision of 

the future, and caring for others, leaders 

can ignite resonance in themselves 

and those around them. 

LE 

Richard E. Boyatzis, Ph.D. is Professor of OB and Psychology, 

Weatherhead School of Management, Case Western Reserve University, 

and coauthor with Annie McKee of Resonant Leadership 

(HBS Press). 216-368-2053, richard.boyatzis@case.edu 

ACTION: Become a resonant leader. 



Followers 

Measure of a Leader 

What followers say about effectiveness. 

WE PROPOSE A NEW MODEL 

to identify and train effective 

leaders. We look at the followers to 

determine the quality of leadership. 

We are not examining leadership in 

terms of a person’s position. We examine 

the effect that any one person has on 

the behavior of others. 

You are a leader only if you have 

followers. Thus, the focus of any 

study of leadership should be on the 

relationship between the leader and 

the followers. Follower behavior, not 

leader behavior, defines leadership. 

Four criteria of the followers’ 

behavior define leadership: 

1. Followers deliver discretionary 

behavior directed toward the leader’s 

goals. Followers make sacrifices for the 

leader’s cause. The most effective leaders 

get more out of their followers than 

they are required to give. In essence, 

individuals donate some of their time 

and energy to the leader’s cause. 

2. Followers make sacrifices to 

advance the leader’s cause. This implies 

a commitment to the leader and his 

cause and is an example of a voluntary 

choice rather than a forced one. 

3. Followers reinforce or correct 

others so that they also conform to the 

leader’s teachings and example. This 

criterion talks about the relationship 

the followers have with each other as 

a result of the leader’s example. They 

agree that the leader and his objectives 

are worthy enough that they will 

be supportive of one another. 

4. Followers set guidelines for their 

own personal behavior based on their 

perceived estimate of that which the 

leader would approve or disapprove. 

The follower and the leader respect 

each other for what each contributes 

to the cause. 

Much of leadership is to be found 

in the context. Would Churchill have 

been considered a great leader without 

World War II Probably not. Yet 

Churchill did not change his personality 

so much as did the situation. 

by Aubrey Daniels and James Daniels 

Three Factors 

In a historical sense, we judge the 

greatness of a leader by three factors: 

1. Magnitude of their impact. 

Leaders are judged by the vigor and 

growth of their message and by the 

pervasive influence of that message. 

When others base their life decisions on 

the example or teachings of a leader, 

one condition of greatness is met. 

2. Duration of their impact. Great 

leaders produce disciples who extend 

their message and example beyond 

their immediate role. How long the 

leader remains an influence to others 

is part of the leader’s legacy. Some 

leaders may be judged as great by their 

contemporaries but leaders’ legacies 

depend on how people in the future 

recount their stories. 

3. Number of followers. The number 

of followers is also significant. Fame 

and notoriety are indicators of the 

numbers of people impacted by the 

words or example of a leader. 

Greatness as a leader assumes effectiveness. 

Since greatness is such a fragile 

designation, we talk about effective 

leaders. While we may refer to people 

that history has denoted as great leaders, 

we focus on those who lead others 

in any venture or cause, regardless of 

its magnitude, duration, or impact. 

We caution you not to value leadership 

over management. Both roles are 

equally valuable. The durability of the 

leader’s vision depends on the quality 

of management. In fact, one role of a 

leader is to ensure the quality of management—that 

there are systems and 

processes in place that will outlive personalities 

and ensure the leader’s legacy. 

In effective organizations leadership 

and management are complementary. 

Both functions must be fulfilled. The 

better you see the differences, the more 

effective you can be in both roles. 

One challenge for managers is 

learning how to be leaders. Many mistake 

the form for the essence. It is 

normal for managers to look to prominent, 

successful leaders as their models. 

Too often, however, they copy the 

behavior that is an impediment to 

their model’s success rather than a 

cause. They are seduced by what they 

see and usually what they see is only a 

small sample of the leader’s behavior. 

Just as looking to the North Star 

permits the Captain to guide his ship, 

looking at the behavior of followers 

permits leaders to develop their skills. 

Traditionally leaders are measured 

by their impact in three dimensions: 

Did they grow the enterprise Did the 

enterprise achieve prominence Did 

the leader leave a positive legacy 

One’s accomplishments, however, 

can slip away at any time, or they can be 

cancelled by some significant failure. 

The only disadvantage of measures 

that are based on long-term results is 

that they give little guidance to anyone 

seeking to grow leadership skills. Realtime 

measures are more meaningful. 

Measurement in leadership serves 

its greatest function when it is used to 

establish causal relationships between 

leader behavior and follower behavior. 

Measurement should help the leader 

answer the questions, “What must I do 

to cause this number to change” This 

assumes that you can count something, 

since a judgment does not offer 

you the same benefit. Judgments are 

indirect measures and subject to interpretation. 

Actual counts are preferred. 

When we measure leadership, we 

use numbers that pertain to follower 

behavior. Our questions then become: 

“How do I get more people to do X” 

The best predictors of leadership 

are to be found in the behavior of the 

leader’s followers: How do the followers 

respond to the leader’s direction 

How focused are the followers on the 

leader’s goals How do the followers 

relate to each other How do the followers 

react to the leader himself 

These indicators provide the best 

forecast of the leader’s impact. LE 

Aubrey Daniels, Ph.D. and James Daniels are the authors of 

Measure of a Leader (Performance Management 

Publications). 678-904-6140, www.aubreydaniels.com 

ACTION: Measure your effectiveness. 


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