Manifesto for Real Leaders
For the past 35 years I’ve been helping leaders win. Winning is never easy. Especially now. And it’s not just because competition is more fierce and game-changing technology is being developed every nano second. Winning is hard because most of us don’t spend enough time critically thinking about what winning means to us. Instead we tend to accept others’ definition of winning and then start sprinting in a direction that has no finish line. This rarely leads to life’s biggest win—personal happiness and true contentment. And increasingly, neither does it lead to winning at making money.
So what does it mean to win? A research base of 250,000 business leaders over three decades confirms that humans have three prime motives. This is important. Our prime motive constantly directs our attention and focuses our energy on goals we believe will make us happy. Prime motive number one is distinguished achievement, attaining goals that set you apart. Number two is beating your competition. And number three is enriching the lives of others—creating value for human beings. These are three very distinct motives, each of which leads each of us to invest our daily energy very differently depending on how we define winning.
It turns out that the general population divides in approximately three equal segments according to these three prime motives…but not so in business leadership. The higher up we look in organizations more leaders are primarily driven to achieve difficult goals or to beat the hell out of the competition. Fewer wake up in the morning fired up to create meaningful value for customers or to enrich the lives and capabilities of their employees. This has become a leadership problem. And it’s getting worse. Today’s hyper competitive businesses can no longer count on winning by making money the old fashion way. That’s because everything we’ve learned about effective leadership has changed.
It’s pretty simple. If you are a leader your thinking simply has to shift or realign with the new realities or you will fail, and no amount of hard work toward goals that no longer matter can save you. This change of mindset isn’t easy. We all rely on our old thinking habits because being open-minded to new, disturbing information is both unpleasant and inefficient. And that’s the fundamental problem. Most leaders, especially those driven by achievement and competitiveness, have been seduced by efficiency… whatever the quickest, easiest way is to make money right now.
In 1993 I led a project for the American Quality Foundation focused on making Total Quality Manage (TQM) normal business practice in the U.S. It was vital at the time. Japan was making great cars and electronics and the U.S. wasn’t. TQM was driven by engineers who figured out how to use statistics to reduce variance, cost, and people to more efficiently create reliable products. By the mid-nineties this movement became known as business process reengineering, then Six Sigma, now lean thinking.
But the world economy is “leaned out.” There are few advantages that persist from further efficiency. In fact many of the supposed gains through enterprise wide business processes have proven an illusion. We all know businesses cannot save their way to sustainable prosperity. For that you need to create new value. Real value. Value that matters to human beings. It is only by creating a Unique Value Advantage (UVA) that an enterprise can sustain healthy financial margins to reinvest in motivated employees and make new bets on products, offerings, and markets that provide a steady source of growth. I call this Value Added Enterprise. This requires leaders to have authentic empathy for both customers as well as employees so they can conceive of value that actually matters to human beings. This requires a different way of thinking—literally, reviving a different part of your brain that enables you to see and feel things that a cost-saving mindset filters out.
In order to awaken the dead part of a leader’s brain I use a three step process. First, years of research has revealed that the top 3% of effective leaders do three things really, really well. They 1) set clear direction, 2) inspire and motivate their workforce and stakeholders, and 3) drive results. The most compelling data on leadership behavior suggests that 97% of business leaders don’t do these three things well. In fact, only 10% of leaders do two of them well. Perhaps that’s why truly great leaders are rare. The interesting thing is that the rarest of the three essential qualities of great leadership is number two—inspiring others. Now we know that’s because people are most inspired by meaning rather than goals. It’s true, the evidence is we are much more meaning-seeking beings than pleasure-seeking ones. And the root of human meaning is enriching the lives of other human beings, which translates into adding value. It’s even better if it’s unexpected value and best if it’s unique value. If you question that just consider a brief list of most admired leaders and ask yourself what they have in common:
Steve Jobs – Apple
Howard Schultz – Starbucks
Doug Conant – Campbell’s Soup
Mark Parker – Nike
Herb Kelleher – Southwest
Beth Comstock – GE
Sam Palmisano – IBM
Blake Mycoskie – TOMS Shoes
Tony Hsieh – Zappos
If you guessed that all these leaders are up to something more than making money, you’d be correct. Each one has created or revived a brand with a unique value advantage based on a value added strategy. Great leadership begins with clear leader intent that comes from the inner passion to make a customer’s life better. Nothing less.
This passion for value is driven by a mindset not taught in business school. The MBA approach is to view business as a stockholder wealth-creating machine. MBA PowerPoints reveal a business logic mindset of Gain, Grow, Good. This business logic directs leaders to first think of a way to make money (Gain), then use a more-with-less business model to grow profitable revenue (Grow), and if there is anything left over to do some well publicized, social responsibility (Good). This is, in fact, the pattern of the old version of the American Dream. Start a business, create a monopoly to get really rich, and then retire as a philanthropist. This was Andrew Carnegies’ and Bill Gates’ pattern. It is no longer relevant.
This gain first approach to business no longer works because it kills daring motivation. In fact, a gain-first business model creates risk averse cultures that become rigid, siloed, and bureaucratic. But trying to build fortresses around business models is a failed idea. The revolutionary forces of technology that have created a new reality in which all information is available to anyone, anywhere has changed everything. Now any competitive advantage derived from a gain first mindset evaporates in months by competitors whose consultants are as smart as yours.
The answer to this dilemma is found in the second new success factor. Think Good, Grow, Gain. It means that you as a leader begin with how much good can I do for people using the assets I have. No, this is not a not-for-profit agenda. In fact it’s the growth agenda of the future. Creating unexpected value grows new demand and benchmark breaking gains. That’s exactly what the leaders we most admire are doing. Yet, this good first thinking is such a foreign idea to the trained business mind that I’ve had to come up with a thinking model to jolt new thoughts.
It looks like this:
When I help retrain leaders’ minds to escape the prison of business-as-usual I teach them a process of answering questions about first how they might use their assets to create unique, innovative offerings that help customers experience a better life through one or more of these six sources of unique value. Once you open your mind to this model you begin to see how super brands create consumer insistence (where customers accept no substitutes) and generate powerful attractive energy. Brands like Disney, Apple, Nike, and Starbucks inspire us with products and experiences while equally famous brands like Microsoft, HP, Denny’s, and Six Flags inspire only yawns. Just as Google, Harvard, and Oprah create mental energy by making us feel smarter and more capable, Yahoo, University of Phoenix, and Jerry Springer are well known but not for “good” reasons.
As I take leaders through this exercise in discovering six ways of adding value, the light goes on that making a difference is the surest way to make money in this constantly disruptive economy. I often see them blow open the cage of old, failed thinking and release leaders’ personal sense of “unfinished business.” You see, our unfinished business is our personal TRUE work. The work that most of us never get around to. The work we are designed to do and that our higher selves desire to do. Work that doesn’t just make us richer but also better. Once leaders understand their best path to personal success is the path that creates genuine value for humanity their practical idealism kicks in and a new level of courage and conviction takes hold.
Yet, even then, even after a core mind shift to value added leadership ignites, I find it difficult for leaders to sustain escape velocity. The gravity of old ways of thinking and the pressure of short-term investors slows down, and even stops, real change.
To boost energy needed to change I’ve had to develop a third step to drive change. I’ve developed a 12 week brain-boost camp based on a set of very short and easy daily habits which I’ve designed to literally rewire a leader’s brain to tap their natural strengths to create value added solutions to tough challenges. I have found that I’ve had to draw on the full power of new research on personal positive well-being to incite permanent change. What’s most rewarding is that these habits light up the unique passions and talents of leaders to not only lead better but also to live more fully.
As I talk to audiences and work with leaders who believe they have “unfinished business” I only have to ask them to look at their past accomplishments and current work and ask themselves, “Is this the best I can do?” Those who can imagine there is more are those who will change the future by creating it.
And for me, releasing a leader’s mind and will to be extraordinary is the payoff. You see, I believe that business is the most powerful institutional force to create the future we want for our children to live in. Imagine a world of sustainable abundance led by value adding leaders who redefine winning as making the positive difference only they can make. Just imagine.