Lead by Greatness. How Character Can Power Your Success THE SUMMARY IN BRIEF CONTENTS IN THIS SUMMARY, YOU WILL LEARN: Leadership

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1 September 2015 Leadership Lead by Greatness How Character Can Power Your Success THE SUMMARY IN BRIEF Business visionaries already recognize that the next wave of growth won t come from a narrow focus on profits and process. Rather, it will come from leaders who successfully distinguish their organizations by infusing them with innovation, energy, and heroic performance. These leaders will be individuals who express their unique sense of destiny and purpose and who are able to connect, inspire, and instill in others with their own passionate sense of purpose. Lead by Greatness presents a life-changing leadership philosophy. By integrating ancient wisdom insights, cutting-edge strategic thinking, and deep interviews with more than 30 CEOs from some of America s fastest-growing, privately held companies, this philosophy shows how a new breed of leaders can use their sense of destiny and purpose to stimulate business growth even in times of economic stagnation. It further explains how leaders can access and radiate transformational energy, inspiring the people around them to heroic achievement and delivering unrivaled growth. IN THIS SUMMARY, YOU WILL LEARN: The Purpose of Business and the importance of Corporate Soul. How to discover your Leadership Fingerprint and Personal Purpose. How to inspire trust and lead your organization toward greater growth. CONTENTS Part I: The Case for Greatness Page 2 Spiritual DNA Page 3 by David Lapin Part II: Unlocking Your Corporate Soul Page 4 Measures and Principles Page 5 Unleashing Generosity Page 5 Part III: The Next Era of Leadership Page 6 Published by Soundview Executive Book Summaries, 511 School House Rd., Suite 300, Kennett Square, PA USA 2015 Soundview, Inc. All rights reserved. Reproduction in whole or part is prohibited. September 2015

2 THE COMPLETE SUMMARY: LEAD BY GREATNESS by David Lapin The author: David Lapin corporate advisor, keynote speaker, and rabbi has earned the respect of global business leaders through his unique ability to identify a business s current strategic opportunities and operational challenges while, at the same time, understanding and unraveling the complex dynamics of the human spirit. This ability, combined with his uncompromising position on growing revenue and maximizing profit, places him in the mastery category amongst international speakers, thought leaders, and organizational advisors. Lead by Greatness by David Lapin. Copyright 2012 by David Lapin. Published by Avoda Books. 338 pages. ISBN Summary copyright 2015 by Soundview, Inc. PART I: THE CASE FOR GREATNESS Not a Soul in the Boardroom Like individuals, groups of people sports teams, families, and even corporations have souls: a personality and an essence that makes them unique. The difference is that whereas individuals are born with a unique essence, the unique essence of an organization needs to be uncovered and cultivated. This authentic essence is what I call corporate soul. A company s corporate soul is the reason its customers stay loyal to it and why its best employees never leave. When companies are true to their essence their corporate soul they embrace their unique purpose and values, getting to the core of who they are and distinguishing them from others. The resulting distinction sets them apart as recognizably different from similar companies and sustainably protects them from the threat of imitation. Distinction is an intangible gold mine, and the real secret to developing its worth lies with great leadership men and women of exceptional character. What a Company with Soul Looks Like Southwest Airlines is a company with soul. Despite competing in what would appear to be a commoditized industry, no other airline has successfully replicated the Southwest experience and business model. This is due to the strategic way Southwest uses its corporate soul. A company s soul is authentic when it resonates deeply with its leaders and employees not only as a business strategy, but also as an all-encompassing way of life. Allan Pullinger, CEO of Rand Merchant Bank, told me that the Bank s leadership brand is a brand for life, not just for work. Pullinger states, If our leadership brand doesn t resonate enough with our leaders that it embraces their whole life, they shouldn t be working here. The way we are at work must be authentic to who we are at home. This is basic to character. Leaders of character are authentic. Their actions align with their values in business and beyond as they courageously lead by their own greatness. They do not look over their shoulders at what their competitors are doing, because that only places limitations on what they themselves could be doing. Leaders of character inspire their organizations with something of the spirit of their own authenticity. When aligned with the beliefs and passions of its leaders, an organization can then authentically be itself. Character School In order to succeed in either relationships or business, one has to put the needs of others before one s own; this is the essence of character greatness. One needs to be generous and humble, willing to trust others and cultivate the trust of others in oneself. One needs the backbone to stand by what one believes to be true and right. My research has shown that the character traits of leadership greatness are identifiable: Authenticity, Purpose, SUMMARY Published by Soundview Executive Book Summaries (ISSN ), 511 School House Road, Suite 300, Kennett Square, PA USA. Published monthly. Subscriptions starting at $99 per year. Copyright 2015 by Soundview, Inc. Available formats: Summaries are available in several digital formats. To subscribe, call us at SUMMARY ( outside the United States), or order online at Multiple-subscription discounts and corporate site licenses are also available. Rebecca S. Clement, Publisher; Sarah T. Dayton, Editor in Chief; Ashleigh Imus, Senior Editor; Masiel Tejada, Graphic Designer; Eileen Spatz, Contributing Editor 2 Soundview Executive Book Summaries

3 Mastery, Humility, Vulnerability, Generosity, Awareness, and Wisdom. Great leaders display a remarkable similarity in possessing these traits, which can be developed. However, there are few individuals who are willing to embark on a journey to their own greatness. This is because there is a human tendency to focus on solutions to problems outside us rather than focusing within. It s very hard to look in the mirror when we don t like what we see. Thus, we are quick to make external changes: fixing structure, operations, marketing, and public relations; we implement technology, drive innovation, manage employees, and incentivize managers. These are all symptoms of problems, not causes. We ourselves, and the choices we make, are the root cause of our own challenges and of the challenges that face our organizations. Greatness is something any one of us can choose; it takes only one person to start the process. The Power of One I lived in South Africa during its dramatic transformation from a repressive apartheid regime to a vibrant democracy. Working with business and government leaders during and after this transition, I came to have a real understanding of President Nelson Mandela and watched how he, one man, affected millions of people. By observing President Mandela, I learned how a person does this and, moreover, that one doesn t need to be a president or a CEO to make a remarkable impact on countless others. Anyone can do it. Mandela united a divided nation and healed a broken people; he even brought our differences into harmony. He did it through the authority of his personal stature as a human being (i.e. his character), rather than through the power or status of the government he led. He did it with compassion, wisdom, and persuasion. People followed him out of respect, not fear. I realized then that it is nearly always individuals who change the world not societies, governments, or organizations. You Are Nuclear A great spiritual figure known as The Rebbe told me when I was a young man, You are a spiritual being, and every time you meet someone, a nuclear reaction occurs, not a chemical one. A nuclear chain reaction can release several million times more energy than a chemical reaction. Each person on whom you have some impact can in turn affect the lives of countless others. This belief was later borne out in a 20-year Harvard study, showing that emotions can pass among a network of people up to three degrees of separation away. Think about the people with whom you engage in a week, and how many people they each mix with and how many people there are in that network three degrees of separation from you. The number could be well into the millions! Nothing you do or say, and no attitude you exude, exists within a vacuum. Every action, expression, and mood gives rise to reactions in others. You are a nuclear reactor committing powerful energy. You emit energy all the time, and it travels far beyond your geographical confines. The only real way to change others is to change yourself. Further, when leaders make the choice to change themselves, it will inevitably transform their teams as well. The first step in implementing change toward greatness is to know both who you are and who you could become. To do this, you will need to discover your authentic self and the unique purpose for which you were created. Spiritual DNA Each individual is uniquely distinguishable from every other, and these differences go beyond physical and genetic characteristics, extending to unique preferences and values. The implication is that every person also has a unique way of making moral and strategic choices. We describe this unique way of making choices as your Leadership Fingerprint (or what is referred to in the book as Spiritual Fingerprint ), a fingerprint that is as real as the concentric ridges in your fingers. Your Leadership Fingerprint is an invaluable tool in making difficult choices, in explaining your viewpoint to others, and in understanding theirs. Recognizing your Leadership Fingerprint requires serious soul-searching, but doing so will ultimately help you navigate your pathway through life. Mapping your Leadership Fingerprint To discover your own Leadership Fingerprint, you will first need to identify and list your unique set of value-drivers. Value-drivers are a subset of your values and they differ in an important way: value-drivers are the values for which you have made or would be willing to make significant sacrifices. You use value-drivers to make moral and principled choices and resolve Soundview Executive Book Summaries 3

4 difficult dilemmas. Try to list between five and seven value-drivers. The next step in the process of mapping your Leadership Fingerprint is to identify your core value-driver: the single value-driver that is central to your authentic self. Your core value-driver is the one you are least likely to compromise. If you were to compromise your core value-driver, your entire system of value-drivers would implode because it was undermined at its core. Next, draw a set of five to seven concentric circles and place your core value-driver in the center circle. Then, ask yourself which of the remaining value-drivers would most logically follow from your core. Continue this way, placing each value-driver in the order such that each one drives and energizes the next. Finally, check to make sure that in the event of a conflict between two of your value-drivers, you would always sacrifice an outer value in favor of the one closer to the core. The resulting system of value-drivers is your Leadership Fingerprint. Diagnosing and Resolving Value Conflicts If you feel that you are not functioning at your full potential, you can use your Leadership Fingerprint to diagnose the root cause. To do this, first check your outcome value-driver, the last one of your concentric circles. It is there that you are most likely to notice something is wrong. If you are not optimally delivering on your outcome value-driver, next check how well you are delivering on the value-driver beneath it. Continue by peeling the onion until you find where in your Leadership Fingerprint you began diluting or compromising on a particular value-driver. That is where you will begin to reactivate your Leadership Fingerprint and make new, more authentic decisions and choices. Additionally, if you find there is a need to strengthen and reactivate your Leadership Fingerprint, you may also start by working with your core value-driver, from the inside out. Nourish and energize your core to deliver results on the outer rings of your system. It s Not Just Who You Are; It s Why You Are I believe we all embark on our life journey in hopes of making a difference and having our deepest spiritual needs filled each day; that our purpose in life is not to make money, but to earn money from the meaningful differences we make in the lives of others. The quest for meaning is the striving of the human soul; it is a spiritual need, but it has a place at work, too. When work is meaningful and purposeful, people bring far more energy and innovation to it than when it is not. Vast resources of human energy, innovation, and productivity wait to be liberated by managers willing to learn how to inspire employees with a passionate belief in their own dignity and human value of the work they do. Articulating Your Purpose There are three factors that will help you discover and articulate your personal purpose: your capabilities, your primary beneficiaries, and your passions. Your capabilities stem from your individual assets, such as your physical abilities and learned skills, upbringing, education, mental capacity, personality traits, worldview, life experiences, network of contacts, and innate talents. Create a list of your assets and then articulate a few ways you could use this unique blend of assets to benefit others; these are your capabilities. Once you have articulated your capabilities, you will see that many different people could benefit from what you have to offer. It s important to identify the single set of people or groups of people that could derive the most value from your capabilities. These are your primary beneficiaries. They might be your family, your employees, your customers, or underprivileged children in your city. To identify your passions, ask yourself what activities in your work or personal life energize you. What are the activities that bring you a sense of joy and satisfaction when you do them? Which activities give you a sense of all-around well-being? When you have identified these activities, ask yourself what about them energizes and uplifts you, because this is how you will find your passions. To craft your personal purpose statement, first check to see how well your capabilities and your passions are aligned. Then identify both the tangible and 4 Soundview Executive Book Summaries

5 intangible services you could provide to the people you highlighted as your primary beneficiaries. These services should combine the use of your capabilities with activities about which you are passionate. Finally, write one or two sentences describing the tangible and intangible benefits you provide and to whom. PART II: UNLOCKING YOUR CORPORATE SOUL Breathing Soul into a Corporation Great leaders know how to access their own souls; great business leaders know how to use this knowledge to articulate their corporate souls to unlock powerful new waves of economic value. Corporate soul goes far beyond matters of culture to manifest itself in the differentiated design of its product offering, too. Steve Jobs articulated this perfectly: Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service. Some might ask, Why would an almost spiritual concept like the corporate soul be fundamental to economic success? The answer is that spirituality is, in fact, what makes us creative human beings, distinguishable from every other living creature. Our spirituality provides us with the capacity to create ideas and products that are unique and different from those created by others, and this distinction is the core of any competitive business strategy. Two Operating Systems There are two operating systems that drive human behavior and that function side by side: our defensive survival instinct and our creative, heroic drive. We are free to choose which of the two operating systems to follow in any given moment of our lives. This choice is the most significant choice we ever make, because everything else flows from it. Both of these operating systems are founded on a need for security and well-being. However, one system protects our physical security while the other maintains our spiritual well-being. The human soul does not need protection; it needs nourishment. Meaning nourishes the soul. Purpose drives it. Crafting a Golden Culture Corporate culture does more than inform every individual in an organization about what attitudes and behaviors are expected of them. Culture is responsible for generating human energy and also reflects an organization s soul. Culture, like soul, is intangible. The company s culture and its values not its products, processes, or structure create the intangible offering that truly differentiates it from other companies. The next big wave of growth will come from businesses whose leaders know how to convert low-cost intangibles like culture into high bottom-line value. Although cultivating a great culture demands emotional investment, leadership wisdom, and a genuine care for people, it is a financially low-cost investment with a high economic return. This is why great leaders pay attention to it. An authentic culture, at the very soul of a business, is something competitors cannot imitate. Espoused Expectations vs. Implied Ones It is better for an organization not to espouse its values at all than to flaunt its values while failing to apply and practice them. When employees perceive a disconnect between their organization s espoused values and those that it practices, they lose trust in management, and management often doesn t know the reason why. To ensure alignment, we must first understand implied employee contracts. Implied employee contracts describe the way employees experience and interpret management s expectations of them. They are essential to building a company culture, and there are four of them: 1. We value our people unconditionally. This implied contract means that people in the organization feel valued by leadership as human beings, irrespective of their performance levels. 2. We value our people for what they contribute to the company. A culture where the implied message is we value our people for what they contribute makes people feel valued and respected as human beings. 3. We value our people s contributions. This implied contract is often deliberately used in production plants Soundview Executive Book Summaries 5

6 where skill requirements are relatively low and employees are easily replaced. 4. We value our people so that they will increase the contributions they make. This implied value is useful when talent is scarce or when there is a need to further train and develop them through on-the-job training. Nearly always, especially when the business is healthy and growing, the second implied contract delivers the highest levels of performance and accountability. To propagate this culture you need to balance and juggle two leadership imperatives. The first is to lead by values and principles and to ensure that conversations in the business are chiefly about principles. The second is to relentlessly track performance numbers and share them so that both managers and employees understand their contribution. The single most vital skill to building a golden culture is an organization s ability to balance its focus between quantitative performance measures and qualitative business and ethical principles. Measures and Principles Principles, whether strategic or ethical, are qualitative inputs, and results are their quantitative outputs. You can drive behavior using principles, values, meaning, and purpose. However, there is only one way to measure the outcomes of business: by using quantitative metrics. Great leaders measure performance numerically all the time, but they never drive performance with numbers; they drive their teams with an inspirational vision, a higher sense of purpose, sound business principles, and ethical values. If you try to lead people with numbers, you only manipulate people into acting. Once the fear factor lets up, manipulated people revert to old habits. However, when you lead people with strategic vision, higher purpose, and moral principle using numbers only for measurement and feedback you unlock their discretionary energy and inspire them to innovate. People will surprise you with their efforts. Don t Just Say It; Convey It The foundation of robust communication rests more on the ability to hear than on the capacity to speak. Communication is ineffective if it isn t heard, no matter how eloquent the speech. As leaders, we need to hear our people, but just as importantly, we need to make sure the people we lead hear us. Controlling people by imposing status usually entails a veiled threat of force in the event the other person does not comply. When people feel intimidated, they become defensive, set up protective barriers, and cease to hear. Instead, they justify and rationalize; they blame others and play victim. Their survival instinct takes over, and they shut down their creative, heroic drive to protect it from possible abuse or exploitation. Successfully managing a hard conversation requires connecting with and challenging the other person in a way that does not raise his or her defensive barriers. Great leaders provide a safe space for people to make an occasional mistake, to take responsibility for their actions even when they are negative and to give honest feedback. Then, people will perform not out of fear of consequence, but out of a sense of responsibility and a desire to not disappoint. Unleashing Generosity Just imagine an organization that has generosity as part of its corporate soul. Imagine having employees who always make sure to give the utmost value to their employers. Such companies do exist; and there are great leaders who have built cultures of generosity that translate into premium returns. Great leaders create cultures of generosity by removing the fear of abuse and exploitation and embracing a culture of appreciation and reciprocation. Sometimes we might reciprocate simply by saying thank you in a genuine and heartfelt way. However, at times it can be difficult to thank others, because doing so exposes a level of vulnerability that we are trained to hide. Expressing gratitude shows that we need others, that they did something valuable for us, and that we feel in some way indebted to them. When we consistently reciprocate and authentically appreciate people for what they do, we demonstrate that they will never be taken for granted, nor will their generosity be exploited. Making people feel valued and indispensable doesn t diminish their effectiveness; rather, it increases it exponentially. When people feel trusted and valued, they bring their souls, their passions, and their creative, heroic 6 Soundview Executive Book Summaries

7 drive to work, making a far bigger difference that anything we might have expected of them. This is generosity. Transforming Intangibles into Gold Intangible assets such as culture, intellectual property, leadership competence, and reputation add a great deal to a company s worth. Intangibles can translate into more value when they add to the customer experience. Think about what happens when you apply intangible values like appreciation, generosity, humility, and dignity to the way you view and interact with your customers. What might that do to your sales and profit margins? We tend to view customers as people that have a need for commodities or services, but people will often pay significantly more if those commodities or services also satisfy their deeper, intangible needs and desires. With the application of intangible concepts like purpose, authenticity, and corporate soul, companies are proving time and again that better tangible results ensue. The Purpose of Business Is the purpose of a business to make profits? Or is profit the measure and outcome of a business that successfully and efficiently satisfies the needs of its customers? I believe a business s higher purpose is to make a contribution to the well-being of people. Contribution is the purpose; profit is the outcome. Profit is the measure of the corporation s success. Most companies start with a tangible product and then try to build a valuable, intangible quality into it. Google did it the other way around. Building on their unique values and passions, Google s founders started with little more than a corporate soul and a brilliant intangible concept: to organize the world s information and make it universally accessible for free. At first, they had no idea how to monetize this intangible idea. They had to find a tangible component to its offering for which customers would pay; otherwise, its business model could not have been sustained. When the intangible components of your offering are borne out of your essential corporate soul rather than out of its easily imitable operational processes, your offering will remain unique in the marketplace. This is because no competitor has, or can have, your corporation s soul. Finding Your Company s Soul The process of finding a company s soul is similar to finding an individual purpose, and similar questions will need to be asked. Ideally, these questions are asked throughout all levels of the organization. 1. What are your company s capabilities? These capabilities emerge from the unique tangible and intangible assets of the company, particularly its leaders. Using the unique portfolio of strengths and assets can help an organization understand what it provides for its customers that its competitors cannot. 2. Who is your primary customer? In designing a company s product and services, attention will focus on the primary customer and his or her deepest human needs (beyond the needs for a tangible product). The primary customer is by no means the only customer. However, the business strategy and nature of a company s offering will vary depending on the chosen primary customer. 3. What are you passionate about? The passions of an organization s leaders distinguish that organization and give it energy. A company soul is, to some degree, molded by the personal passions and values of the leadership team. Part III: THE NEXT ERA OF LEADERSHIP Cultural Intelligence Cultural intelligence is about knowing how to uphold the dignity of people and quickly build their trust, irrespective of their culture, faith, or nationality. This is particularly pertinent when doing business in emerging economies. Mastering cultural intelligence goes well beyond overcoming the challenges of differences between cultures; it offers a new and superb opportunity for economic advantage. Cultural intelligence is advantageous for domestic businesses as well. Doing business domestically requires more cultural intelligence than ever before. Both your team and your customer base likely consist of a spectrum of cultures and backgrounds, and in order to be effective, you must lead with, exhibit, and demonstrate a culturally intelligent corporate soul that can be universally embraced. Soundview Executive Book Summaries 7

8 Cultural Difference People from different cultures don t always look different, but they do see and experience the world in different ways. Despite these differences, there is a simple and authentic language of universal dignity that, when used authentically, enables people to feel respected regardless of where they come from. To master this language of universal dignity, it is helpful to understand three primary lenses through which we experience our lives. No individual or nationality sees the world through any single lens; we experience life through a composite of all three lenses to varying degrees. These varying degrees can create significant differences in our experiences of the same event. 1. Structural. People using this lens might see or seek perfection in objects and structures. Structural people create and admire hierarchical organizations governed by clear metrics, with a results-oriented culture of accountability. 2. Ideological. People using this lens might believe perfection can be found only in specific ideological models such as an economic, political, psychological, or religious model. They do not accept compromise or adulteration of the model. 3. Relational. People using this lens might see or seek perfection in their relationships with others. They believe the quality of relationships and feelings are more important than structure, technology, and ideology. By understanding the three primary cultural lenses and how they play out differently, it becomes easier to appreciate others differing and unique views of life and to communicate with them in a way that resonates with their beliefs and values. Cultural Architecture for a Global Economy People are inspired by a higher corporate purpose that resonates with their own beliefs and values and by the authenticity of people with whom they work. An inspired workplace is one in which all three cultural lenses function in harmony: people connect with relational competence; they set targets and budgets with structural competence; and they work toward a higher ideological goal, with a corporate purpose that unites them. New Leaders for a New Generation Well-directed, talented young people in your business can help accelerate your journey into the future and help you leapfrog from yesterday to tomorrow. Ideally, you want droves of brilliant young talent craving to work on your team because your corporate soul resonates with them, because they feel inspired by your higher corporate purpose and are energized by your mentorship. Every adult generation in history has felt a gap between their own and their children s generation. Our parents complained about our sense of entitlement and lack of discipline, as their parents did about them, and so on. But today s gap between older people (i.e. Baby Boomers) and the generation born after the creation of Internet (i.e. Millennials) is different from any other generational divide. As challenging as Millennials are to Boomer managers, today s younger workers do want good leaders, role models who portray competence and humility. They admire people who lead not by their status, but by their human greatness. Conclusion Your corporate soul is the fountainhead of your company s authenticity and purpose, and for it to flourish, your company must be staffed and led by people of character people who lead by greatness. A corporate soul cannot be invented or engineered; it can only be discovered. Leaders of character possessing qualities of human greatness discover their corporate souls, articulate them, and use them to build strategic distinction. You have it in you to be such a leader, one who is imbued with greatness. RECOMMENDED READING LIST If you liked Lead by Greatness, you ll also like: 1. Grounded by Bob Rosen. Renowned CEO advisor Bob Rosen proposes a new approach to leadership in which leaders at every level can become more self-aware and develop their untapped potential. 2. Becoming Your Best by Steven Shallenberger. Discover the 12 principles you need to follow in order to reach your highest potential and drive the kind of innovation that turns good companies into industry leaders. 3. The Good Ones by Bruce Weinstein. Ethics expert Bruce Weinstein presents 10 crucial qualities associated with high-character employees. 8 Soundview Executive Book Summaries

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