Establishing a Leadership Standard

The most successful leaders leave a legacy by establishing a pipeline of leaders that is better than what they inherited and, in addition, becomes the standard against which the rest are compared.

-Ram Charan

Team Building: Getting Highly Competent Individuals to Work Together

(21805) Ram Charan says:

An important part of know-how is being able to get high-energy and competent people to commit to the total business rather than just their own careers. Building a high-performing team is a tremendous opportunity to enhance the business and propel it forward.

Cooperation Is Essential to Team Building

Once you’ve taken the time and effort to recruit smart and competent people, the next challenge is to mold these people into a team who synchronize their work in such a way that will propel the business forward. The natural tendency is for each person to focus on their own specialty, but if you plan on achieving something of note, you need to get everyone pulling in the same direction. Quite simply, this is the only way to generate the synergy that comes when high-performing individuals build something together.

To mold a great team of leaders who work together well:

Shape a common view of your business–by sharing all of the data you have available. Get everyone on the same page by letting them master the basics of the business factually and accurately. It’s not until the entire team knows everything you do that they can truly add some value. Get everyone up to speed by ensuring they know your company’s marketplace realities, challenges and resources in fine detail.

Confront directly any behaviors that dilute the team’s effectiveness–something that will take courage. Many people try to avoid or gloss over conflict or hope the problem will resolve itself eventually. That’s a waste of time. Whenever someone does something that dilutes the team’s effectiveness, you need to have the inner courage to confront them directly, tell them that is unacceptable and ask them to change.

Bring to the surface and resolve any conflicts–before they have a chance to cause delays or problems. By anticipating and then resolving conflicts early on, you avoid the possibility of them becoming personalized. You should expect conflicts to come in three general flavors or themes:

Task conflicts–who will do what?

Process conflicts–how will we get this done?

Resource conflicts–where will we apply our resources?Pick the right people to be on the team–which generally will be a mix of those who have technical competence, decisiveness, the ability to deliver what is promised, the respect of subordinates and the esteem of peers. Even when you have highly skilled people available, bear in mind that everyone has to be willing to place the organization’s success ahead of their personal agendas for the team to perform to maximum effect. Having anyone who puts their personal agenda ahead of what’s best for the team is a real problem. Some people also find it difficult to make the transition from being productive personally to coaching and managing the productiveness of others. Getting the right people on the team is also further complicated by the fact that there will be departures from time to time and therefore new people will need to be integrated into the team at different times. A newcomer may be intimidated by the established team relationships at first and find it hard to become a contributing member of the team. These challenges are all part and parcel of picking the right people to be on the team.Providing worthwhile feedback and coaching–so team members can know what they need to be doing to become high performers. Feedback is most effective when it is provided promptly and in written form. When people have confidence that the feedback they’re receiving will be helpful in their careers, they usually are more responsive to receiving coaching and training. These are all essential components in team building.

Recognize and avoid those activities that can destabilize the team–which may include these types of pitfalls:

Having a “last in, first out” mentality towards personnel management

Being afraid to express a controversial point of view

Forming small groups who are “in the know”

Being afraid to give honest feedback

Making final decisions over and over

Know-How

Judging: Matching the Right People to the Right Tasks

(21804)

Someone with know-how selects and develops other leaders who can take their place when the time is right. They build a team of people who can get things done rather than trying to do it all themselves.

Fostering Future Leaders

One sure indicator of someone with know-how is that they always leave their organization stronger than how they found it. They have a real talent for spotting and then developing new leadership talent. They actively search for people with latent leadership potential, create growth opportunities where these people can leverage and deepen their abilities and allow them to grow progressively stronger. This makes their organizations stronger and more flexible because there is a deep pool of leadership talent available.

Your job as a leader is to get the job done, not to try and do everything yourself. The only way you can achieve this consistently is by growing other leaders, or more specifically by building a pipeline of future leaders. In this way, you won’t have to deal with every issue yourself.

Managing Talent Appropriately

Many organizations start with a job description and then find the right person to fill that opening. Someone with know-how reverses that dynamic. They spot leadership talent early and then create a career path that will give that individual room to grow and develop. As these individuals take on progressively more complex challenges, they then become more competent to take on a greater role in the business in the future. This is more than conducting an annual performance review. Instead, it requires that you create a view about the person’s current competencies and then match that person’s weak areas with challenging stretch assignments that will promote personal growth.

So how can you achieve this in practice?

Become better at spotting leadership talent in others–by observing their actions, decisions and behaviors up close. Keep in mind that you will have personal biases of your own, so you constantly need to cross-check your thinking with others.

Try pooling your observations about others–so you get a fuller and more accurate picture of each individual’s positive and negative attributes. Muster evidence and probe beyond generalities when you consider what a person brings to the table in this way.

Be prepared to “drill down”–and get to the truth about a person. This may be a matter of keeping notes about multiple meetings, or you may need to talk with the people they work with in depth. Go beyond superficial observations and get down to the real nitty-gritty details before making a judgement.

Develop your future leaders effectively–by both clarifying what path they need to follow to grow and what they need to be working on in their current job. Don’t be so focused on the opportunities of the future that you fail to notice their current shortcomings. Help people see what aspects of their current performance need to be enhanced if they are to reach their full potential. Have regular face-to-face dialogues where you spell out what’s going well and what isn’t. Over a period of time, these discussions will be very helpful and worthwhile.

Establish clear non-negotiable criteria–so they genuinely understand what each job requires them to do to succeed. If you make these lists of criteria too long, you cause confusion. Focus like a laser on what really matters, spell that out and then let the person use their own initiative.

Find constructive ways to deal with any mismatches that occur–because you can never really be sure what will happen when dealing with people. Some will rise to the challenges placed before them but others will fail miserably. There are all kinds of reasons for this but at the end of the day, you’d better be prepared and willing to deal with any problems that are generated. This may be a case of finding them another position that is a better match to their talents or making it clear to the person that their future lies elsewhere.As previously mentioned, the genuine acid test of your judging know-how is whether or not you succeed in building a pipeline of future leaders. This is more than merely specifying your criteria for future leaders. It also goes well beyond spending money on training and development programs. You have to work with others to identify the leaders of the future and make sure they receive assignments that will stretch their abilities and expand their knowledge. They need to be exposed to a wide variety of markets, cultures, consumers and business models. And their ongoing progress needs to be tracked and monitored regularly.

Know-How

Leading: Shaping the Way Your People Work Together

(21803)

Astute leaders manage the social aspects of their organizations to deliver results. They resolve problems and then synchronize everyone’s efforts so a common objective is achieved rather than letting everyone do their own thing. Leaders with know-how change their organization’s internal social system.

Managing Your Organization’s Social System

Another dimension of know-how is having the ability to make your organization’s social system deliver just what is needed when it is required. Getting people to work together towards a shared objective is a vital business skill. Sometimes, this is likened to herding cats–you can put loads of energy into it but at the end of the day everyone pretty much does whatever they like.

Managing your organization’s social system has two parts:

1. Determine the key decisions that need to be made and get the right people making them

2. Actively shape and mold the behaviors that are displayed in making those key business decisions

Leading Your Organization Through Critical Tests

A leader with know-how will develop a social system that is in sync with what the business ought to accomplish. If there is a problem, he or she will initiate corrective actions and wake sure specific steps to fix it.

An active approach

To actively manage and improve your organization’s social system, there are a few things you can do:

Map how decisions currently get made

Track how readily information flows around your organization

Diagnose your operating mechanisms and make sure each is geared to the right business result

Provide incentives for people to upgrade obsolete internal systems with better ones

Initiate and guide an internal dialogue where people evaluate the quality and substance of their decision making with a view towards suggesting improvementsEncouraging Productive BehaviorThe place where the rubber figuratively meets the road when it comes to managing a social system generally lies at the “critical intersections”–at all those places where information needs to be exchanged, conflicts need to be resolved, trade-offs need to be agreed upon and decisions must be made. It’s absolutely vital that your social system encourages productive behavior at these various critical intersections. It’s your job as a leader to design and implement a well-oiled social system with operating mechanisms that function well at those critical intersections. You also have to signal which behaviors are acceptable and which are not through ongoing dialogue.

Resolving Hidden Conflicts

Most companies’ existing social systems are a mishmash of different building blocks that are either poorly designed or that have evolved over a period of time. That’s why there are often a number of unresolved conflicts lurking just beneath the surface. This leads to inefficiency and wasted energy–for example, sitting through meetings that achieve nothing. Your job as a leader with know-how is to eliminate waste.

Key questions

There are four questions you should be asking all the time:

What is the purpose of our existing operating mechanisms and how good are the linkages between them?

Which of our operating mechanisms are worth keeping in place and which should be replaced by newer and better designed options?

Which operating mechanisms should be completely rebuilt?

Are there new operating mechanisms we should be developing and then integrating into our social system?

Tweaking Your Social System

The best social systems are designed around your own organization’s most important business activities. When you’re trying to achieve new or different business results, it stands to reason you’ll also need to tinker with your social system to achieve those results on an regular basis. Otherwise, people will probably go on doing what they have always done, which will mean your output will remain pretty much the same as it has always been. If you’re out to achieve something different, your social system will need either tweaking or a major overhaul.

The Home Depot Story

A good example of this was when Bob Nardelli was appointed CEO of Home Depot in 2000. The company had grown from a single store in 1978 to around eleven hundred stores generating $40 billion in revenue by 2000, so they were obviously doing many of things right.

However, all kinds of problems that lurked beneath the surface had been generated by that growth. The company was emphasizing sales at the expense of every other metric, including profitability, cash flow and inventory management. Individual store managers were making their own purchasing decisions, failing to take full advantage of Home Depot’s scale. Nardelli came up with some new ways to keep the company growing. He also developed systems that would enable those changes to take root and flourish.

Nardelli’s new system

A new internal planning process called SOAR–Strategic Operating and Resource Planning

A weekly two-hour planning meeting involving all of the senior management team

A new Store Manager Council where new initiatives were discussed and agreed uponAs a result of these and other new operating mechanisms, Home Depot’s revenue nearly doubled to $80 million by 2005, which in turn generated strong earnings-per-share growth for the company. Nardelli would later be caught up in controversy over his severance package with Home Depot, but nobody can doubt he had the know-how to change Home Depot’s social system.

Know-How

Pinpointing: Noticing External Change Before Others Pick Up on It

(21802)

Savvy leaders stay ahead of the curve and act before their competitors even start to respond. They pick up on changes in the environment early and adjust for what will work in the future, not what worked in the past.

Hone Your Senses

A second aspect of know-how is your ability to “connect the dots”–that is, to pick up on all the clues that come in daily about ongoing changes in the marketplace and assemble them into sound judgement about where your business needs to be in the future.

To do this effectively, you need to be able to look at your business and industry from the outside in. You need to be looking at everything that is happening in the general business community as if you had no vested interests. If you can pick up on changes early on, you’ll then have time to try new ideas, run some real-world tests, apply your resources and if necessary reposition your business more advantageously.

External changes can be cyclical or structural. As a rule of thumb, cyclical changes need to be managed and can be deferred to some extent, whereas structural changes are long term and therefore require permanent corrective actions to be taken. Being able to see pending external changes before they occur is more an exercise in pattern recognition than anything else. Those who are skilled in pinpointing change are typically very adept at detecting patterns in the external environment. This competency then allows them to act confidently and decisively while others are still bogged down sorting, sifting and analyzing the data.

Angles of Observation

To pick up on emerging patterns, there are seven reasonably straight-forward questions you need to be able to answer:

What is happening in the world today?Look at all the changes that are taking place and try to get a complete mental picture. You’ll need to fill in the gaps and decide how changes in one area will have likely flow-on effects elsewhere.

In terms of my personal frame of reference, what has worked for me and which aspects have not?People with know-how have the ability to engage in some self-reflection. You need to evaluate why you may have failed to pick up on some clues in the past and then do something about it.

What are the potential responses from those who are most affected?Savvy business leaders evaluate all potential responses. They look through the eyes of different groups and make an informed judgment about what is most likely to happen. You must learn how to do this.

What will changes in the big picture mean for my organization and its strategies?Once you have the big picture issues in place, you can then determine what the flow-on effects will be on your own enterprise. You can then develop workable strategies that will allow you to seize any and all new opportunities.

What would need to happen for new and exciting opportunities to open us for us?Spend time getting a feel for the prerequisites that will need to fall into place first. You will then be able to differentiate what level of certainty there is, and how far along the sequence of unfolding events are.

What can we do to play a role in making those respective changes happen proactively?This generally means reorganizing your business to be positioned for the new opportunities. You may also need to look at your leadership pipeline, management structures and other practices.

What can and should we do next?Once you’ve assimilated all this information and processed it, you then need to go ahead and move. There’s no use accurately anticipating change but then sitting back and doing nothing worthwhile about it.

Keep Your Eye on the Big Picture

It’s easy to become so immersed in what you’re doing that you develop a form of myopia to everything else. Those with know-how are always busy becoming better at what they do because they can see their own business model in the context of the big picture. To enjoy those same advantages, you need to become skilled at pinpointing the changes coming soon and placing your business in an advantageous position. This is important because the world is changing all the time.

Know-How

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