Results-Based Leadership

Transcription

1 Results-Based Leadership How Leaders Build the Business and Improve the Bottom Line by Dave Ulrich, Jack Zenger and Norm Smallwood Summarized by permission of Harvard Business School Press Copyright 1999 President and Fellows of Harvard College 234 pages Focus Leadership & Mgt. Strategy Sales & Marketing Finance Human Resources IT, Production & Logistics Career Development Small Business Economics & Politics Industries Intercultural Mgt. Concepts & Trends Take-Aways Charisma, speaking ability, vision, work habits and other positive characteristics aren't enough to make a great CEO. The right approach to leadership balances attributes and achievement. As Peter Drucker says, "Leadership is all about results." GE defi nes leadership behaviorally. The company asks, "What must a great leader do to achieve results?" Most companies use only a fraction of their human capital. Good leaders motivate employees to produce more. Align your company's capabilities with the strategic demands of the marketplace. Collecting market-research data on your customers doesn't necessarily mean you understand them. The notion that the customer is always right is a myth. In fact, you must choose your customers wisely. Results-oriented leaders develop the next generation of leaders. Rating (10 is best) Overall Applicability Innovation Style To purchase abstracts, personal subscriptions or corporate solutions, visit our Web site at or call us at our U.S. office ( ) or Switzerland office ( ). getabstract is an Internet-based knowledge rating service and publisher of book abstracts. getabstract maintains complete editorial responsibility for all parts of this abstract. The respective copyrights of authors and publishers are acknowledged. All rights reserved. No part of this abstract may be reproduced or transmitted in any form or by any means, electronic, photocopying, or otherwise, without prior written permission of getabstract Ltd (Switzerland). This summary is restricted to the personal use of Lisa Howard-grabman ([email protected])

2 Relevance What You Will Learn In this Abstract, you will learn: 1) How management science has overemphasized charisma and such attributes in leaders; 2) Why results are at least as important as skills; and 3) How to balance results with attributes to do a better job of running your company. Recommendation Dave Ulrich, Jack Zenger and Norm Smallwood s book is really a broadside against the cult of personality that rules so much of the current thinking about what makes leaders great. Amazingly, even in the pragmatic world of business, personality attributes such as the vision thing often dominate conversations about what you need to become a great leader. But great leaders are great because they achieve great results. The authors seek a balanced approach that recognizes the importance of both strong executive skills and bottom-line success. They provide questionnaires, charts and exercises. getabstract strongly recommends this book to managers and aspiring leaders who are looking for a practical approach. Abstract Being capable and possessing the attributes of leadership is terrifi c, but capability must be put to appropriate, purposeful use. The Cult of Personality A management consultant paces a room filled with smartly dressed, up-and-coming executives attending a seminar on leadership. The consultant tells them to write down their personal responses to the question: In the future, an effective leader in this firm must Some answer that their leader must have vision. Others say the leader of the future must have integrity and an exemplary character. He or she must be a good communicator, another replies. And the leader must have the charisma to motivate others to excel. Future leaders must build teams that can respond adeptly to changes in the marketplace, another contends. What is the one thing missing from all of these answers? the consultant asks. For a moment, the consultant paces, his shoes clicking on the floor breaking the silence. Then facing the audience, the consultant answers, Results. None of you has said that the future leaders of your company must achieve results. Leaders who aren t getting results aren t truly leading. Overlooking results when it comes to analyzing what makes a great leader is endemic, and the problem goes beyond leadership-development courses. Most books on corporate leadership also reflect this cult of personality. Experts focus solely on attributes such as charisma, work habits, speaking ability, vision, opinions, communication, and even the likes and dislikes of famous CEOs. The message is that to be successful, you must emulate them. Results This persona-centric approach shows only half the picture. Of course, character played a part in the success of well-known CEOs such as Jack Welch or Larry Bossidy. But if you become fixated on attributes, so many of which are purely personal, you will lose sight Results-Based Leadership Copyright 2007 getabstract 2 of 5

3 Real leadership doesn t consist of beating your peers to the next rung on the ladder. It means getting results that benefi t the entire organization. This does not mean less attention to the leader s attributes, but it does mean making sure that leaders understand and commit to the results they must produce and how they are produced. One criterion for successful results leadership must be the ability to balance short-term results without inhibiting or preventing longerterm results. Leaders who want to create an organizational result around learning need to encourage constant experimentation. They must look outside their organization continually for new ideas. of the most important measure of leadership: results. Great leadership without results is a non sequitur. Management guru Peter Drucker says, Leadership is all about results. GE defines leadership behaviorally. The company evaluates what its leaders do and the results of their actions. To be a great leader, you need both character and results. Through the force and balance of their personalities, great leaders achieve long-lasting results that are in their firms best interests, not just their own. Value Your Human Capital The following formula defines the term human capital: Human capital = employee capability x employee commitment. If either employees skills or their dedication or both improves, productivity will increase. Excellent leaders develop their organizations human capital by motivating their colleagues and employees to work harder and more efficiently. They keep everyone focused on a common goal. Mere talk is not enough. As the late American football coach Vince Lombardi once said, When everything is said and done, more is being said than done. Many companies talk about improving the productivity of their workforce, but fail to take action. Increase the value of your human capital by using the following principles: Take advantage of the human capital you already have Often, companies have a lot of human capital that goes unused. In the service economy, human capital is critical. Look for employees who build good relationships with customers. Human capital appreciates Unlike other assets, which depreciate rapidly in value, human capital can become more valuable as the company grows. The challenge is to turn human capital into customer value. Readjust human capital priorities Companies tend to invest the least in the employees who have the most customer contact, such as receptionists and customer service center staff. However, line workers rather than managers or the CEO are the people most likely to determine your customers experiences and influence their opinions. Increase employees commitment to your organization by using tactics like these: Flexible schedules Today s employees often juggle work and family responsibilities. Take their time crunch into consideration in your human resource policies. Task diversity Employees often enjoy varied, creative work assignments. The feeling that they have created outcomes useful to others motivates them. Promotion opportunities Employees who feel they have a future with the firm naturally feel motivated. Provide opportunities for workers to learn new skills and to develop their abilities. Recognition Acknowledge employees good work with both pats on the back and major incentive rewards. Nurture a sense of community Relationships are a great motivator. Focus on the bonds within a corporate community rather than on the privileges of hierarchy. The point of building your human capital ultimately is to enhance overall organizational capital, which goes beyond the achievements of individual members. For example, members of an orchestra playing together may create music that surpasses the abilities of the individual players. Results-Based Leadership Copyright 2007 getabstract 3 of 5

4 Organizations don t think and do. People think and do. Leaders seeking results thus need to focus their attention on people and on increasing human capital. Leaders interested in investing, leveraging and expanding their human capital should spend time raising standards, setting high expectations and demanding more of their employees. Leaders must produce in the arena of employee results because it so profoundly affects all other areas of corporate achievement. Connecting attributes to results and results to attributes becomes the next agenda for building effective leadership. Improving Overall Performance Successful organizations do the following: Promote learning. Tear down silos, that is, unproductive boundaries. Respond positively to shifts in a changing marketplace. Hold fast to the notion of accountability, the idea that the company must attain certain bottom-line objectives. But developing these capabilities isn t enough. Take the following four steps to improve corporate performance across the board: 1. Align capabilities Your organization s capabilities should reflect the competitive conditions your business faces in its particular industry. Its strengths should be those that enable it to achieve its overall strategy. 2. Improve capabilities Invest time and resources in enhancing capabilities. This is a continuous process. Aim to react more quickly, behave more wisely and compete more successfully. 3. Measure capabilities Measure your organization s capacities to evaluate its progress. You can t become a results-based leader if you don t measure results. 4. Take action Managers often spend a disproportionate amount of time dealing with hierarchy, structure, rules and responsibilities. Measuring and improving the organization s capability is more important in the long run. Shift the focus from hierarchy to action and achievement. Investor Results Any experienced CEO will tell you that obtaining results from employees and customers is not enough. You have to bring home results for investors, who expect a return on the funds they have entrusted to the company. While market vicissitudes are beyond the CEO s control, good management in areas such as employee productivity and customer relations ultimately increase shareholder value. Being an effective steward of shareholder s money requires: Cost management Carefully monitor big ticket costs. Encourage employees to find opportunities for savings. However, as AlliedSignal CEO Larry Bossidy said, You can t shrink your way to greatness in business. Expanding the company Your financial goals should not consist only of cost cutting; they should include growth as well. After all, the amount by which you can cut costs is limited; growth is not. Building a growth culture Focus on the future rather than the past. Encourage your team to look for opportunities to expand. Take appropriate risks. Developing leaders at every level Nurturing new leaders, or luring them into your company, is one of an executive s most important jobs. One caveat: Financial results are important, but they are not the only ones worth achieving. Invest in employees, in building the organization and in improving service to your customers. Customer Service Myths Many of the most important results relate to customers, including customer satisfaction, market share and brand recognition. Beware of these myths, which will block you from getting the customer results you require: Results-Based Leadership Copyright 2007 getabstract 4 of 5

5 A sense of urgency is conveyed by what the leader says, how quickly the leader makes decisions, what the leader rewards. The customer is always right Sometimes, customers are dead wrong. They don t know what they need or want. Provide good products and services, and your customers will realize they need your company. Delight all your customers You can t please everyone. Instead, decide which segment of the market to focus upon and target the customers you choose to serve. Connection comes from data Many companies make the mistake of assuming that if they collect a great deal of data about their customers, they therefore have a close relationship with them. Market data can be misleading, so do research but don t overemphasize it. Leaders Building Leaders Preparing the leaders of the future is one of an executive s most important responsibilities. Training future chiefs requires helping up-and-comers achieve a track record of results. People tend to have strengths in one leadership area or another. To rise to the top, however, you need strengths across the board. Link attributes with results by following these steps: 1. List the attributes you need to achieve your company s strategy List such abilities as motivating employees, fostering an atmosphere of professionalism, leading by example, communicating vision and making decisions. 2. Link each attribute to a result Follow the attributes you ve listed with the phrase so that. For example: Our future leader must communicate vision so that our company can expend fewer resources, develop new products and gain market share. 3. Achieve a balance Address all your organization s needs. 4. Operationalize the results Determine how you will measure performance and improvement. Next, focus on results. Good leaders: The fi nal test of any leader lies in the preparation and success of the next generation. Have passion for results They show enthusiasm and talk openly to employees about their plans. Have a focus on results They tell stories about results, they celebrate organizational achievements and they look for opportunities to achieve even greater results in the future. Ask results-based questions. Find out not only What do you think? but also What did you do? Ask potential leaders what result they re trying to achieve, whether those results are balanced, how they intend to measure them and what challenges they re encountering along the way. About The Authors Dave Ulrich is a business professor at University of Michigan and editor of the Human Resource Management Journal. He has published numerous articles on business topics. Jack Zenger runs an organization that enhances other companies industrial performance. An expert in training, he has written many books on business topics. Norm Smallwood is CEO of a training and consulting company and co-authored the book Real-Time Strategy. Results-Based Leadership Copyright 2007 getabstract 5 of 5