Category Archives: Corporate Leadership

Leadership Styles in Financial Companies versus Non Financial Companies

The recent financial turmoil has gone by several different names; the ‘Recession’, the ‘Credit-Crunch’ or the ‘Financial Meltdown’. What is consistent however is the scathing view of the broadcasters and politicians of the business leaders who ran the financial institutions that either collapsed or required government cash injections to remain operational. For example, the financial products division of AIG (American International Group) was led by Joseph Cassano, who made big bets with AIG’s reserves on the worthiness of mortgaged backed securities – which increased short term profits but ultimately led to the destruction of the corporation.
At the heart of the criticism is their lack of governance over risk. This is the polite way of wording the accusation that many leaders were reckless with shareholder funds, and leveraged the financial institutions – gearing up the risk, in order to inflate their own bonuses.
These are damning criticisms indeed. But I wonder out-loud whether these negative characteristics apply only to financial institutions, and not their industrial counterparts. Are industrial leaders really more risk averse and reliable? Or, as I propose – has the media simply ‘assumed’ that industrial leadership is steadier than the financial sector, because of the simple fact that no bad stories were emerging from the sector?
Well, we could look at corporate failures in the past few decades to allow us to conclude on how the two industries stack up. If we take a look at Wikipedia’s ‘List of Business Failures’ page, we can see that there were many financial companies that met the criteria for listing. The list hides many failed companies which were acquired by larger groups and merged into their operations.
What is evident is that countless industrials and other non-financials failed in the last decade, including Borders Group (Book Store), BlockBusters (Video Store) and News of The World (British Newspaper). The volume of non-financial organisations is surprising – with no financial companies featuring in the 2010, 2011 or 2012-to-date listing. The reasons for these failures vary. Some companies operate in dying industries (such as those where products are moving to online product leaders and away from traditional retailers and distributors), however one can be confident that shareholders ridiculed Blockbuster’s leadership team for not foreseeing and responding to this seismic shift in the marketplace, which has occurred gradually from 2004 onwards since the founding of YouTube. We could therefore easily suggest that bad leadership is not the premise of financial institutions alone.
AIGThe recent financial turmoil has gone by several different names; the ‘Recession’, the ‘Credit-Crunch’ or the ‘Financial Meltdown’. What is consistent however is the scathing view of the broadcasters and politicians of the business leaders who ran the financial institutions that either collapsed or required government cash injections to remain operational. For example, the financial products division of AIG (American International Group) was led by Joseph Cassano, who made big bets with AIG’s reserves on the worthiness of mortgaged backed securities – which increased short term profits but ultimately led to the destruction of the corporation.
At the heart of the criticism is their lack of governance over risk. This is the polite way of wording the accusation that many leaders were reckless with shareholder funds, and leveraged the financial institutions – gearing up the risk, in order to inflate their own bonuses.

Challenges Change but Leadership is Constant

Business leaders face challenges and risks in good times and bad.
If there weren’t any challenges, leaders wouldn’t be needed. If nothing ever changed, good management would be enough.
The ability to deal with challenges is what defines a leader. Leaders that respond to challenges with focus, resolve, and execution are most often successful in meeting them. Those that are slowed by unfavorable headwinds, demoralized by setbacks and get bogged down in activities that don’t create value are those that fail.
Today’s business climate is as challenging as any in recent memory.
To gauge the challenges and risks facing today’s business leaders, the risk management and reinsurance giant Aon surveys about a thousand of them every year. This year, not surprisingly, business executives around the world identified the current economic climate as the number one challenge facing businesses and their leaders. The global economic slowdown poses risk for all enterprises, large and small.
The business leaders’ 2011 top ten risks list also reflected some new concerns. For the first time, the leaders surveyed listed “failure to innovate and meet customer needs” as a top-10 risk. Start-ups and other upstart businesses, perhaps enabled by new technologies, are more forward-looking and proactive and pose a threat to their more established competitors.
Another new concern, also technology-related, is the risk of technology or system failure. All aspects of business are now so dependent on technology that an interruption, whether intentional or accidental, could be catastrophic. Moving up the list this year is the concern that firms will lose valuable human resources and be unable to attract talent due to layoffs and downsizing. Other top challenges cited were regulatory changes, reputation management, and increasing competition.
The Aon survey certainly reflects a business climate with strong and shifting headwinds but the response of business leaders to these challenges should be based on principles and principles never change. One such principle is the power of execution: when the way forward is clear, do not let the resistance stop you. Leaders who move forward decisively will always face resistance but once you have considered all the factors and decided on the right path, follow that path decisively. Another component of execution is to act boldly. If competitors are out-innovating you and you need to take your organization in a new direction to compete, do so boldly.
Like execution, the power of focus is an important leadership principle when facing tough and shifting challenges. Part of maintaining focus as a leader and an organization is to eliminate activities that don’t add value. Don’t get bogged down in the weeds. If certain meetings or activities are unnecessary and unprofitable, get rid of them. Focus is especially important in times when no one can afford to waste time or carry unnecessary baggage.  Likewise, it’s important to identify your MVP activities, where MVP stands for most valuable and profitable. Every segment of every day is more valuable than ever. Maximize that value by spending your time on the activities that benefit your organization most.
Finally, when faced with difficult and changing times, leaders must serve as a source of hope for their organizations, communicating their belief that something better is just down the road. This doesn’t mean ignoring or glossing over difficulties, but rather showing people that if they face them head-on and decisively, the challenges can be overcome.
I’ve observed, spoken about and written about these leadership principles for years. While the challenges change, the essentials of great leadership do not. While the principles that leaders use may change in the way that they are applied, the underlying truth of the principle ultimately pays off.
While the world around us, and the business climate we face, can change at breakneck speed, our responses to new challenges should be based on abiding principles of leadership. And whether you have a title or not, if you meet the challenges you face with action based on these principles, you meet the true definition of “leader.”
(And for a look at how to develop leaders at every level, click here.)
What are your biggest challenges as a leader? Please feel free to share your thoughts with me on Facebook and Twitter as well as in the comment box below

Business leaders face challenges and risks in good times and bad.

leaderIf there weren’t any challenges, leaders wouldn’t be needed. If nothing ever changed, good management would be enough.

The ability to deal with challenges is what defines a leader. Leaders that respond to challenges with focus, resolve, and execution are most often successful in meeting them. Those that are slowed by unfavorable headwinds, demoralized by setbacks and get bogged down in activities that don’t create value are those that fail.

Today’s business climate is as challenging as any in recent memory. Continue reading

Five Elements of Authentic Leadership

In Ancient oriental Philosophy, wood, fire, earth, metal, water are five basic substances in nature movements, all five elements of nature could be integrated into the contemporary leadership and management essential.
Five Elements of Nature to Define the Authentic  Leadership
Wood – Means doing good things with elegance and personality. By nature, wood need grow and sprout in the Spring, Same as “Wood style” of leadership, blossom with innovation, inspiration and influence,  to lead via nature, not via brute force.
Fire –On behalf of propriety, self-esteem, mix humanity with humility,    “Fire-Up” Summer style leadership will lead with passion, sincerity, vision and mission, perception with great presentation.
Earth—or Soil stand for gentle temperament but confidence and honesty. “down-to-earth” style leadership means great attitude, taken responsibility, the listening skills and nature connection and engagement.
Gold—On behalf of justice with strong temperament,  “rule of gold” means equality, you should treat others as you want to be treated, gold could also mean the autumn, harvest, to deliver the sustainable result, with measurement culture, the incentive and rewards to the contribution.
Water –On behalf of the flowing wisdom,  the insightful observation, the analytic prediction, and the art of good management practices.  Water may also mean Winter, the knowledge accumulation, the energy re-charging and long term sustainability.
Also be said that benevolence, righteousness, propriety, wisdom and trust of the Five Elements
are the substance to achieve the Level Five leadership Mr. Jim Colin defined:
The person who knows how to build enduring greatness through paradoxical blend of personal humility and professional will:
1) Drive for sustained results: The difference between the Level 5 and other leaders is that they are driven to produce sustainable results for their organizations. The idea is that level five leaders create long term sustainable change.
2) Set up successors for success: Level 5 leaders are generally more interested in the success of the organization than there own personal success. They want to leave a lasting legacy of an organization that continues to prosper. They are self confident enough to hire competent people (get the right people on the bus) and then delegate.
3) Modesty: Should demonstrate compelling humility. They act with quite, calm determination; and rely on inspired standards, not inspiring charisma, to motivate.
4) Take responsibility: Level 5 leaders stand out because they take responsibility when things go wrong. They do not look to blame others when things do not work out as expected. In addition, they rarely seek to take credit for things that go right, generally seeking to attribute the success to other factors.
5) Organization focus: The ambition of the Level 5 leader is first and foremost on the organization. Their desire for success for the organization that they lead far outweighs their drive for personal rewards.

In Ancient oriental Philosophy, wood, fire, earth, metal, water are five basic substances in nature movements, all five elements of nature could be integrated into the contemporary leadership and management essential.

Five Elements of Nature to Define the Authentic  Leadership

Wood – Means doing good things with elegance and personality. By nature, wood need grow and sprout in the Spring, Same as “Wood style” of leadership, blossom with innovation, inspiration and influence,  to lead via nature, not via brute force.

Continue reading

What is Good Leadership in the 21st Century?

In this article I will examine the subtle changes in what is good leadership that have occurred over the past few decades, and how the modern perception of good business management and leadership skills has warped over time.
The first change that I can discern is the principle of accountability and transparency. In the 1960s, people never knew how much their leader earned as a salary or in bonuses. All payroll information was top-secret, and salaries of the board members were sometimes not even known by other board members.
Fast forward to 2012, and leaders have their salaries published in the financial reporting of the corporation. In the UK – the Companies Act 2006 states that if the total remuneration of all directors is greater than ?200k, then the full pay details of the highest paid director must be published.
This sensitive disclosure has caused a wave of shareholder backlash in recent weeks – met equally by the disgust of the leader subordinates themselves. This has had a bizarre effect on leadership in these organisations. Leaders now feel more like they must ‘justify’ their salary to their subordinates, and are therefore less likely to make huge demands of employees without also showing that they are putting in ‘super’ levels of effort and hours to make the company a success.
The second change in good leadership has resulted from the unbalancing of the developing economies away from primary (farming) and secondary (manufacturing) industry, and towards services. The consequence of this seismic change in the economic landscape is that fewer ‘worker bees’ are required, and more creative individuals, educated professionals, and aspirational employees have emerged. The management route is now on the table in almost every organisation, and is pushed to lower-level employees as a way of tethering themselves to the company, and motivating them to excel in their job in the hope of beginning a career path out of a entry-level job.
This has meant that leaders are trying to not only ‘direct’ the actions of workers, but also to ‘recruit’ them into the larger vision of the organisation. An example would be the larger ‘manager class’ of workers in supermarkets  – almost all of whom began stacking shelves, but joined a management scheme because they exhibited the right leadership traits, and eventually marginally increased their wage.
The changes outlined above are two of many incremental developments in the world of leadership. Why don’t you take a look at your own organisation, and see how the role of leaders has changed there over the past 30 years?

goodLeadershipIn this article I will examine the subtle changes in what is good leadership that have occurred over the past few decades, and how the modern perception of good business management and leadership skills has warped over time.

The first change that I can discern is the principle of accountability and transparency. In the 1960s, people never knew how much their leader earned as a salary or in bonuses. All payroll information was top-secret, and salaries of the board members were sometimes not even known by other board members. Continue reading

Lead With Self Confidence

I’ll never forget one particular manager I worked for early on in my career who surrounded himself with “Yes” men and women.
He lacked the self-confidence to lead and and it showed in his decisions and in his circle of advisors. He failed to earn the respect of his staff, which resulted in little innovation or inspiration. Turnover was high, and morale was low. (The opposite of what it takes to be a Level 5 leader.)
Self-confidence in leadership is important for many reasons.
Kyle Zimmer, president and CEO of First Book, a non-profit organization providing books for children, exemplifies a self-confident leader.
New York Times reporter Adam Bryant interviewed her on early leadership lessons.
It crystallized for me 3 ways a self-confident leader inspires the work environment:
It doesn’t mean your the smartest person in the room. Have the self confidence to surround yourself with people who are smarter than you. Know how to lead and inspire and foster new ideas. People will respect you and want to work with you. Give credit where credit is due and let them make you look good. You get the credit for having them on your team!
Your people define your culture. You might have an idea of the culture you are looking for. Have no mistake, you are hiring to fit that culture. Your interview questions will tie in closely with the culture you seek. In First Book’s example, they wanted self-starters and leaders. It was very important to what they were building. So they asked interviewees “what have you started or built?” A self-confident leader knows the culture will evolve as your organization and your people evolve. Give them some say.
No one is afraid to tell you if you have a bad idea? This is my biggest takeaway. Do you instill an environment of collaboration and respectful debate? Would your staff be too fearful of telling you your idea is no good? And can you handle the feedback in a humble way if they did so?
You may or may not agree with them, and in the end, you have the final right to veto – you are the CEO, after all.
Try this exercise: Ask your employees, your clients, and your stakeholders – “What are three things you love about working with us and three things you would fix if you could?”
Some of my best leadership lessons come from my previous employers; both the good and the bad. What about yours? What would you add to the list?
selfI’ll never forget one particular manager I worked for early on in my career who surrounded himself with “Yes” men and women.
He lacked the self-confidence to lead and and it showed in his decisions and in his circle of advisors. He failed to earn the respect of his staff, which resulted in little innovation or inspiration. Turnover was high, and morale was low. (The opposite of what it takes to be a Level 5 leader.)
Self-confidence in leadership is important for many reasons.
Kyle Zimmer, president and CEO of First Book, a non-profit organization providing books for children, exemplifies a self-confident leader. Continue reading

Rediscovering Leadership In Professional Organizations

leadership2.jpgAll of us join professional organizations for a reason-a friend belongs, we need to for credibility, etc. Many times we let years slide by and we don’t stop and review those reasons. Unless something sets off a boundary–lack of funds, the organization runs itself into a ditch, or a leadership problem.

When doesn’t it fit any longer? Is there a pattern to you dropping a membership?

I know, as an accountant for 15 years, I joined organization after organization. Without knowing it, and after delegating it to my assistant, I realized that I belonged to 32 organizations. Yes, at one time. Yes, I know this is probably exceptional. Yes, I can blame it on my assistant or being too busy. But I’m not. It wasn’t until I began to take a complete review of those memberships that I realize many no longer fit.

During the review process, I learned to ask different questions. Let me share with you a 6-step process that I’ve used for the last 8 years that I know will help you: 1) choose more wisely in the future; (2) set your intention and expectations first; and (3) know what you want to give back.

This 10-minute exercise will save you time and money as well as make money and create time with smarter choices in the future. Continue reading

Help Others To Discover Their Potential

coach.gif Most of us find ourselves in a position to help others achieve more of their potential than we realize. Sure, as leaders, supervisors, and parents we can see ourselves in that position; but the fact is that all of us are uniquely qualified to help at least one other person in our lives reach their potential. I believe it is part of our purpose in life to serve others in this way – to encourage and support people we care about in becoming their best selves.

Many books (some of which sit on my bookcases) have been written about coaching and helping people develop their skills. This article won’t be a definitive list, but it will share my perspective on the essential ingredients in helping others reach their potential. Continue reading