The following is an excerpt of an article I wrote, titled “Leadership Observations of a Management Consultant.” I will be releasing more excerpts over time.
“WHY CAN’T I JUST RULE BY FEAR?”
A Preoccupation With Titles:
It is amazing how much energy is expended by individuals to attain the title of “leader.” If that energy were redirected altruistically to focus on what is best for the customer, the shareholder, or the other stakeholders who depend on the organization’s success for their success, there is no limit to what a business could accomplish.
Sadly, though, altruism has become as anachronistic in American business as jousting has become in solving land disputes. Our business schools are happily turning out future leaders who have both a distorted sense of reality and an inflated sense of their own divinity. These future leaders enter the workplace armed with an academic pedigree, an ambition born from privilege, and a complete lack of understanding about what it takes to truly lead an organization.
Don’t get me wrong – I believe business schools have their place. Any academic institution that can teach individuals how business works, how the various components of a business interact, and how the financial side of business must be structured to ensure profitability, provides a service that cannot be ignored. However, there is a huge difference between understanding how a business works, managing the various components of a business, and providing leadership to the employees of a business.
The relentless pursuit of career advancement, the single-minded focus on “climbing the ladder,” the lust for power and authority, have become too commonplace in business today. Individuals begin their careers with the erroneous belief of “be promoted or perish;” that their sense of self-worth is based on their job title, rather than measured by what they accomplish for and with others.
“Having a leadership job title does not make you a leader any more than eating at McDonalds makes you a hamburger.”
The Difference Between a Manager and a Leader:
Leader: a person who leads: as (1): a person who directs a military force or unit (2): a person who has commanding authority or influence.
Manager: one that manages: as (1): a person who conducts business or household affairs (2): a person whose work or profession is management.
– Merriam Webster Dictionary
Much has been written about the difference between a manager and a leader. A manager is an organizational administrator with a formal job title. Their job is to manage the people in an organization and ensure that their assigned tasks are being performed correctly. They administer the budgets and finances of the organization, and they administer the performance management programs for their organization.
While the experiment of “Self Directed Work Teams” from the 80’s and 90’s has yielded mixed results, depending on industry, function and corporate culture, it has shown one thing clearly – organizations do not need managers to function. However, organizations do need leaders to be successful.
A leader is a rallying point for an organization. This individual inspires others into action. This individual gives the organization a sense of purpose, and gives the employees of the organization a sense of belonging to something bigger than themselves. This individual defines the culture of the organization by their actions, and establishes the standard of behavior for the organization.
A leader is in a position of tremendous influence within an organization. A manager who is also a leader can accomplish much. A manager who is not a leader, but works well with the real leader, can also accomplish much. But, a manager who is at odds with the real leader will either be overshadowed by the real leader until their position becomes irrelevant, or they will have to remove the real leader in order to survive. Once a weak manager has removed the real leader from their organization, they must either be ready and capable of taking on the leadership role within the organization to fill the void, or be prepared to see the performance of their organization suffer.
“Leaders are the reason employees use for doing what they do.”
The behavior of a leader serves as an example for others to follow. A leader who understands this and demonstrates the highest form of ethical and principled behavior will inspire others to behave the same way. However, a leader whose ethics and principles are questionable can lead an organization astray, and even bring about the collapse of the organization totally.
Kenneth Lay of Enron fame is an example of a leader who set the standard of behavior too low. His unethical behavior, which included making his sister’s travel agency the official corporate travel agency, sent a clear signal that the acceptable standards of behavior could include defrauding the shareholders. Enron eventually collapsed under the weight of its own illegal practices and poor leadership practices.
Because of their position of influence over the behaviors of others, a leader must demonstrate and embody the highest of ethical and principled behaviors. These behaviors must be genuine, not something done for show. Some of the most critical behaviors a leader must demonstrate include the following:
Courage. Not enough emphasis is given to courage in business today. The culture of most companies is to either enforce conformance to way things have always been done, or to keep everyone blindly herded down a common path. Courage is the ability to step away from the herd, see things dispassionately and clearly, determine a better path, and passionately convince others that the better path is the way they should go. Courage is standing up for one’s convictions and being willing to walk away, rather than follow the wrong course of action. Courage is also knowing that, while the needs of the individual must not be overlooked, the needs of the organization must take precedence. The path of least resistance is to not make the hard decisions, to avoid what could be considered unpopular – leaders do not travel this path. Leaders know that, sometimes, sacrifices must be made for the greater good, and a true leader is willing to make those sacrifices for the right reasons.
Integrity. During the 90’s integrity stopped being a standard of behavior and started being the punch line of jokes. It became “unstylish” to demonstrate a sense of integrity. Put simply, integrity is doing the right thing because it is the right thing to do. It is admitting when one is wrong and being willing to accept the consequences for one’s actions. Integrity focuses on the greater good, not on what is good for the individual only.
Honesty. Open, honest communications is one of the most important characteristics of an effective leader. A 19thcentury author once wrote: “Honesty is spiritual power. Dishonesty is mortal weakness, which forfeits divine help.” Once a leader is discovered to be dishonest, the bond of trust they have with their staff is irrevocably severed. Leaders are often placed in a position where they cannot reveal information to other people; but, that is not a mandate for dishonesty any more than the need to be honest is a mandate to break a confidence. Jack Welch, the former CEO of General Electric, coined the phrase “The Organization Knows,” to describe the fact that the employees generally know what is going on. Employees, therefore, have the truth as they understand it to compare against what their leaders are telling them. Credibility is something every leader needs to be successful, and honesty is one of the primary ways a leader’s credibility is established and maintained.
The following parable emphasizes this point more clearly.
A successful business man was growing old and knew it was time to choose a successor to take over the business.
Instead of choosing one of his Directors or his children, he decided to do something different. He called all the young executives in his company together.
He said, “It is time for me to step down and choose the next CEO. I have decided to choose one of you.” The young executives were shocked, but the boss continued. “I am going to give each one of you a SEED today – one very special SEED. I want you to plant the seed, water it, and come back here one year from today with what you have grown from the seed I have given you. I will then judge the plants that you bring, and the one I choose will be the next CEO.”
One man, named Jim, was there that day and he, like the others, received a seed. He went home and excitedly, told his wife the story. She helped him get a pot, soil and compost and he planted the seed.
Everyday, he would water it and watch to see if it had grown. After about three weeks, some of the other executives began to talk about their seeds and the plants that were beginning to grow.
Jim kept checking his seed, but nothing ever grew. Three weeks, four weeks, five weeks went by, still nothing.
By now, others were talking about their plants, but Jim didn’t have a plant and he felt like a failure.
Six months went by – still nothing in Jim’s pot. He just knew he had killed his seed. Everyone else had trees and tall plants, but he had nothing. Jim didn’t say anything to his colleagues, however.
He just kept watering and fertilizing the soil – he so wanted the seed to grow.
A year finally went by and all the young executives of the company brought their plants to the CEO for inspection.
Jim told his wife that he wasn’t going to take an empty pot. But she asked him to be honest about what happened.
Jim felt sick to his stomach, it was going to be the most embarrassing moment of his life, but he knew his wife was right. He took his empty pot to the board room. When Jim arrived, he was amazed at the variety of plants grown by the other executives. They were beautiful – in all shapes and sizes.
Jim put his empty pot on the floor and many of his colleagues laughed, a few felt sorry for him!
When the CEO arrived, he surveyed the room and greeted his young executives.
Jim just tried to hide in the back. “My, what great plants, trees, and flowers you have grown,” said the CEO. “Today one of you will be appointed the next CEO!”
All of a sudden, the CEO spotted Jim at the back of the room with his empty pot. He ordered the Financial Director to bring him to the front. Jim was terrified. He thought, “The CEO knows I’m a failure! Maybe he will have me fired!”
When Jim got to the front, the CEO asked him what had happened to his seed – Jim told him the story.
The CEO asked everyone to sit down except Jim. He looked at Jim, and then announced to the young executives, “Behold your next Chief Executive Officer! His name is Jim.” Jim couldn’t believe it. Jim couldn’t even grow his seed.
“How could he be the new CEO?” the others asked.
Then the CEO said, “One year ago today, I gave everyone in this room a seed. I told you to take the seed, plant it, water it, and bring it back to me today. But I gave you all boiled seeds; they were dead – it was not possible for them to grow. All of you, except Jim, have brought me trees and plants and flowers. When you found that the seed would not grow, you substituted another seed for the one I gave you. Jim was the only one with the courage and honesty to bring me a pot with my seed in it. Therefore, he is the one who will be the new Chief Executive Officer!”
MORAL: If you plant honesty, you will reap trust!
“All managers are in leadership positions, but not all leaders are managers and not all managers are leaders.”
Regulatory Compliance and The Ethical Center:
As mentioned before, leaders are the reason employees use for doing what they do. Whether this is a business leader or a political leader, the leader sets the standard for what is acceptable behavior.
I have worked with a number of companies and clients in the area of regulatory compliance. I have had the pleasure of working with companies that place very great emphasis on complying with federal, state, local, and even international regulations. The leaders of these companies established the standard of behavior that illegal and unethical behavior is not to be tolerated from anyone at any level.
“The Ethical Center” is defined as the point at the core of someone’s behavior. When the Ethical Center is in the middle of what is considered to be “Ethical Behavior,” the behavior of the individual is well within what is considered to be ethical.
However, if the Ethical Center has moved closer to the boundary of ethical behavior because of unethical or illegal acts, the behavior of the individual can no longer be considered to be ethical. As this individual commits more unethical or illegal acts, regardless of the size or magnitude, their Ethical Center will continue to move further out of the ethical circle until unethical behavior becomes the normal mode of operating. As reprehensible as this is for an individual, it is devastating to an organization when a leader exhibits this behavior because it sends a clear signal to everyone that unethical and illegal behavior will be tolerated and even encouraged. This is the “Road to Enron,” and can only result in the eventual destruction of the organization and those within it.
Many leaders whose Ethical Center has moved away from the center of ethical behavior did not set out to commit overt unethical or illegal acts. More often, the movement of the Ethical Center happens with small actions taken over a long period of time. They arise from such euphemisms as “we can afford the business risk of not being in compliance,” and fantasies/delusions like “we will never get caught.”
As a Management Consultant, I can appreciate that some regulations are too expensive for some companies to implement. I have worked with many companies to assess the business risk of non-compliance so they can make the best business decision possible under the circumstances. In all cases, I recommend compliance, but I understand when the cost of compliance is beyond the resources of the company.
However, when compliance is well within the means of a company and they simply decide that they are comfortable absorbing the “business risk” of non-compliance, then the company is “picking and choosing” which regulations they want to comply with and this is unethical, and potentially illegal, in every instance. Leaders who take this approach have Ethical Centers that are rapidly approaching the boundary of ethical behavior, if it has not already crossed that line. These leaders are already traveling down the Road to Enron, and will ultimately destroy themselves and their organizations if not stopped.
Leaders must set and embody the standard that each individual in the organization be well within the boundaries of ethical behavior. Whenever unethical or illegal behavior is uncovered within the organization, the leader must take immediate actions to remove that behavior, and potentially those who committed the unethical or illegal acts. Regardless of how long the unethical or illegal behavior has gone on, or the source of the unethical or illegal behavior, the leader must have the moral courage to stand up for what is right. Failure to take appropriate action against unethical or illegal behavior is itself unethical behavior and causes the leader’s Ethical Center to take that small step down the wrong path.
True leadership is the courage to do the right thing because it is the right thing to do – regardless if whether is the popular thing to do. Leaders who only chose the popular paths are cowards.