Real Leaders Don't Boss (22 page)

At the end of the day, you bet on people, not on strategies.

—Larry Bossidy, former CEO, Honeywell International; former chairman and CEO, Allied Signal Corporation; and former COO, General Electric Company

The current global recession has created a tsunami of workplace turmoil that has taken its toll on organizations and their employees professionally and personally. Many so-called leaders see tough times as license to use and abuse employees. Not only are discontent, distrust, and desertion running rampant in the workplace, but employees and executives are constantly worried about layoffs, trust in company leadership has waned, and job security with big corporations is nonexistent across the board. More workers are becoming small-businesspeople and setting out on their own—not by choice, but out of necessity.

This disaster scenario doesn't have to become commonplace, however. Real leaders who take charge can have a positive influence, even in tough times. These individuals recognize the true value of their greatest asset—the employee—and inspire and
guide their people to succeed. A real leader's engagement and motivation bring value to employees, who, through that motivation and sense of purpose, bring value to the organization.

Real leadership lessens workplace stress and promotes enthusiasm, loyalty, productivity, and the bottom line for everyone. It is the ripple effect compounded. This is true especially in tough economic times, because real leaders see those times as prime opportunities to step out ahead of the pack and set an example worth following.

Though real leadership makes a real difference in business performance at any time, studies show that with the right leadership, the kind that promotes engaged and enthusiastic workforces, the bottom line can go up in tough times. Research from a recent Hay Group Insight study supports that premise. The study found that employees who were engaged and enthusiastic could channel that motivation to deliver results, and employee job satisfaction improves, too.
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“Our research shows that even during the [economic] downturn, companies that have focused on maintaining open and honest communication with employees, ensuring that strategic directions are clear, and fostering trust and confidence in senior leaders are seeing positive returns on their investments,”
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said William Werhane, Insights' global managing director. “Even while cutting costs, our research shows companies can still engage their employees through soft-dollar investments made by their leaders and managers.” The study goes on to report:

Companies that engage and enable their employees outperform on both revenue growth and profitability. Organizations in the top quartile on engagement demonstrate revenue growth 2.5 times that of organizations
in the bottom quartile. And, companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater. Moreover, companies in the top quartile on both engagement and enablement exceed industry averages on five-year return on assets, return on investment, and return on equity by 40 to 60 percent.
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Still not convinced that the right leader with this “touchy-feely” approach makes a difference? More statistics from the Hay study include:

Businesses with high employee engagement levels have customer satisfaction scores 22 percent higher than companies with lower levels of employee engagement. Companies that both engage and enable employees show a 54 percent increase in customer satisfaction.

Companies with high levels of employee engagement have 40 percent lower turnover rates than those with lower levels, and companies that both engage and enable employees show a 54 percent lower rate of voluntary turnover.
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Yet another survey—a seven-year study conducted by the Workplace Research Foundation and the University of Michigan—found a direct correlation between employee motivation and the financial performance of their companies. The study, “The National Benchmark Study: Employee Motivation Affects Subsequent Stock Price,” involved nearly 3,500 employees at more the 840 companies in the United States. The study found that the greater employees' engagement and motivation, the better employee and company performance.
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Employees want to work for leaders who are upbeat, ethical, positive, industrious, energetic, fair, honest, supportive, competitive, engaged, competent, and down-to-earth. A real leader has those qualities and something more: the ability to
impart those qualities to others. A real leader takes a personal interest in others' career development by mentoring and teaching instead of ordering and demanding.

Too many people today lack the inspiration to achieve the potential greatness within them. Real leaders provide that inspiration, and the greatness they bring out in others can be measured in achievement, satisfaction, and successes—financial and otherwise.

Abbott Laboratories is an excellent example of a 123-year-old perennial corporate leader whose enlightened and inspired vision has historically come from its top ranks and trickled down. Its leaders' beliefs and passions permeate the workplace. I was fortunate to have been a PhRMA fellow there. Abbott, a perpetual standard on “best places to work” lists, is a pharmaceutical giant. For many years, its leadership team created a great learning environment, because it prided itself on getting the best and the brightest young staff through its entry-level professional development program. The company attracts great scientists through good salaries and benefits packages as well as enlightened management practices. Young people have the opportunity to interact with many divisions within the company, working mothers have a supportive environment, and the company maintains its commitment to social responsibility. Abbott Laboratories recently decided to split into two companies to increase shareholder value, one for medical devices and the other for its research-focused drug products. Like many of America's major pharmaceutical houses confronted with healthcare reform, Abbott faces many new challenges ahead.

Remember Allan Smith from the University of Michigan in
Chapter 3
? He was a distinguished faculty member and dean at
Michigan's prestigious law school, and served as interim president of the university for some time. But he was neither elitist nor stuffy, and never pretentious. His career included being vice president for academic affairs at Michigan, a position that wielded considerable budgetary clout, and yet he always championed the faculty member who had a new idea. Smith is the kind of leader that inspires others to greatness.

Senator Richard Lugar does not let his position and formidable resume keep him from taking the time and making the effort to pay attention, listen, and share his wisdom and knowledge—not just with his peers and the president of the United States. He has been known to spend lunch hours jogging around the Capitol with his congressional interns, pointing out historical sites and explaining the different monuments and memorials. He also makes sure his interns sit in on important Senate committee meetings so that they are well informed and know what's going on. It is that kind of caring that inspires long-term respect and relationships with staff. It is a major reason young people gravitate to him and learn so much from him.

Someone with a boss mindset may think corporate culture means instituting “casual Friday” in the workplace. But a leader knows that culture goes much deeper than a slogan. Perhaps the most crucial link that connects great leaders and their all-important vision is the personal value system they live, demonstrate, and teach to others. Those values become ingrained in the fabric of the business and in large part foster the corporate culture.

A culture is made up of values, perhaps those of the company's founder or a recent CEO. If either had or has a very strong ethical framework, it's very likely the company will operate
in the same way. If the CEO's value system is not strong, it is quite probable the company culture will eventually model that behavior.

Most companies have mission statements or vision statements, and most have strategic plans in place, all of which affect the company's culture. Fostering a corporate culture is an intentional effort to create a desired work environment. The culture will differ, depending on the time, the place, and those involved, but each culture has a powerful influence on how business is conducted and by what kinds of people. The University of Notre Dame, for example, has a clearly defined culture based on the founding order's view of how to run a Catholic institution of higher education.

A good corporate culture unites people around core purposes, creating unity, clarity, and, for some, greater comfort. The corporate culture functions in its given industry, but it also must be effective in its marketplace. If a marketplace does not embrace the culture of a company, that company's product or service will not sell, and the company cannot thrive.

Great leaders recognize the links between culture, community, and sales, and realize that a strong corporate culture unites people and provides them with a sense of purpose bigger than any product or service. Real leaders treat employees as their greatest asset, investing in and motivating them. They expect high standards of employee behavior—the same standards they model and reinforce. Their values also include frugality, a desire to establish traditions that can be developed and built upon, and a resiliency to get right back up when knocked down by market forces. Corporate culture, if left alone, can deteriorate, resist change, or stagnate with the end result of unhappy, disillusioned, and discontented employees.

David Brandon is one of today's real leaders. He is director of athletics at the University of Michigan, where he
previously served as a regent. He is also former chairman and CEO of Domino's Pizza. Brandon stands out as someone who surrounds himself with the best people—people with high ideals, people constantly striving for excellence, people with morals and integrity, people who won't break the rules, people who win the right way. He fosters that behavior in others by modeling it without pretension. He is not afraid to get his hands dirty and never asks more of anyone that he does of himself, and he is a people person who's always there when you need him.

Inside a company, corporate culture and community are often intertwined. It is not a coincidence that many of the perennial “best places to work” today are in Silicon Valley, where companies such as Google, Facebook, Apple, and others have impressive corporate cultures, strong community ties, and unparalleled creativity. Their leadership fosters those strengths. As Massachusetts Institute of Technology's Timothy Sturgeon wrote in
How Silicon Valley Came to Be
, “the drive to play with novel technology has been a major driver in the area's success.”
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A great way to foster community in the workplace is to allow ownership. Leaders know the importance of a shared commitment and pride in the work done, and so they do not take all the credit for successes, financial or otherwise, or for new developments or inventions. When you work as a leader with employees to solve a problem, it is often best to suggest direction, concepts, or steps in the process to help people come up with their own solution—even if you already have an answer. That effectively transfers the pride of ownership to your employees. When an idea “belongs” to someone, they are much more committed to it, and they act on it accordingly. And when
you see this process work, it gives you a great feeling of satisfaction as a true leader. You may also learn something from them in the process.

During his active military service Navy Adm. William Thompson served as Chief of Information for the U.S. Navy (CHINFO). Like David Brandon, he believed strongly in the importance of surrounding himself with the best talent available. As a result, the efficiency of his Pentagon-based CHINFO that served the U.S. Navy and Marine Corps was unparalleled. Along with dramatically improving the quality, accuracy, and frequency of the Navy's communication with its forces around the globe, Adm. Thompson deserves credit for markedly improving the utility, education, training, and professionalism of Navy public affairs worldwide. It was Thompson, after all, who commissioned the design of CHINFO's logo and whose motto “Nothing But The Truth” has stood the test of both time and enormous challenge.