I recently watched an interview with Larry Summers. Charlie Rose asked him to provide an analysis of the current political environment and he gave an insightful response. I am paraphrasing here: It would be unusual for an individual or a short string of singular incidents to damage our democracy—this is the general line that I have heard from many pendants. But, he added that his concern is that our current situation isn’t confined to an individual or a finite set of incidents. He then pointed to General Motors, a once overwhelmingly (both size and talent) dominant player in the automobile market and how over a series of decades it went from being a leader to being bankrupt.
Andy Grove put is slightly differently: “Only the paranoid survive.” While this may seem only orthogonally related to Mr. Summers’ thought. It isn’t. Both of these keen observers of the dynamics of human nature are talking about leadership, or lack thereof. In the cases of both GM and our current political environment there is a vacuum where there should be leadership. What is leadership? It has five parts:
- A Vision is an understanding of where we want to be. This, by definition, must be:
- Relevant—a vision of producing mediocre product in a world that is focusing on quality is going to fail. And, it isn’t the vision that fails, it is the product of the vision (remember the Cadillac Cimarron anyone) that does. And, when the product of the vision fails, the enterprise that is counting on a winner also fails;
- Achievable—a vision needs to be a stretch. If it were easy, it would already be done. But, it also needs to be something that can be successfully executed. Pat Allin and I thought that we could build a system to simplify and improve the efficiency of the payment process in the construction industry. That was a stretch, for a lot of reasons that are not relevant to this discussion, but after several years of hard work (focused on implementing a vision of a more efficient and effective construction payment process), the industry was changed and the way business was done we significantly improved;
- Desirable—This may seem obvious, but if the vision is not desirable to the potential beneficiaries of the vision, they won’t buy into it. That is why the ability to communicate (see next major bullet) is so important. It took significant effort to effectively communicate Textura’s vision for improved payment processing, but when we succeeded the industry demanded the product.
- A significant step forward. The vision is the articulation of a transformation that changes the world. Visions are implemented a step at a time. This is done for many reasons: cost, the ability of those targeted by the vision to assimilate the changes implied by it, other competing priorities, etc. But, once they are realized, the world is different in (hopefully) a significantly positive way.
- The ability to communicate. This includes an ability to communicate in a way that induces people to not only understand, but buy in. It inspires people to take action. Hillary Clinton provided an interesting paradox here. She most definitely had a grasp of the facts and an ability to communicate convey her understanding, but she failed to communicate. On the other hand, Donald Trump didn’t have a grasp of the facts and wasn’t able to convey a detailed message, but it didn’t matter. He was able to communicate a vision that connected with his constituency and communicated a message that resonated and that they bought into. And, in this situation buying in paid off with enough votes to win the highest office in this land.
But, effective communication is not just for politicians. I think of Elon Musk as being a great communicator. Whether it is about cars, batteries or high speed transportation (see Hyperloop- https://en.wikipedia.org/wiki/Hyperloop), Musk is able to communicate a sense of importance and the inevitability of the success of his ventures. And, I am giving him a lot of credit here because I am very skeptical about the long term prospects for several of those ventures.
- The ability to manage (i.e. turn the vision into an actionable plan and successfully execute that plan): Leadership is nothing without the ability to execute. There are lots of want-to-be leaders who are able to present a vision and communicate it, but can’t execute. And, as anyone in business will tell you the only way to succeed is to deliver.
- The ability to successfully (in the HBS sense) negotiate to get to “Yes”. In this context, I don’t believe that big things get done on a transactional level. Big things are long term and require that all parties “win”. And, leaders need to be thinking about the long-term relationship with their constituencies when setting direction, making decisions and executing on them. Me winning (doing what I need to to get the deal closed) and you losing (me making promises that really can’t be kept) might work when buying a car or negotiating a onetime contract, but leaders generally have many constituencies and if they don’t make everyone equally unhappy 😊, they probably haven’t done their job. Leading is about compromise (something many of our “leaders” have forgotten) and people need to feel good about the compromise, or it won’t stick.
Further to the point about winning, I recently gave up on AT&T as a cellular phone provider because they don’t understand their customers or how to treat them. They provide a service that isn’t meaningfully differentiable from their competitors, their customer service is terrible and they are charging a premium. This is a situation where they are treating their interactions with their customers as transactions when in-fact they should be dealing with their customers as long term relationships. Because what you find when you try to “win” and believe that the game is zero-sum, i.e. your customer must lose, you will find that your customers leave—in droves, because the relationship is a continuing proposition and if the customer feels like they are losing they will go somewhere else who will provide a better long term (i.e. continuing) value proposition. This example isn’t about leadership, but one of the components being able to craft relationships that are win-win propositions; and finally
I will close this section by presenting a notion, which is key to “getting to Yes”, that of empathy. It is easy to understand the people who think the same way you do, but it is a real talent to understand and appreciate those who think differently. And, it is a necessary attribute of a leader most of whom can’t be assured (especially in situations where the population is large and diverse as you have with a large corporation or a nation) that everyone will be thinking the way they are. Real leaders understand their constituents, all of them, and are able to reach out, bridge divides and move the conversation and their agenda forward.
- The ability to understand when it is your turn to lead and when it is someone else’s. This doesn’t have anything to do with giving up one’s leadership position, it has to do with situational awareness and understanding that there are times when someone else is in charge. In my role as a salesman I understood when I didn’t have chemistry with a particular client and even though I might have been the most senior person in the room, I deferred to the person who could connect with the client because it was best for everyone. This may seem like a trivial example, but it is one of the most powerful examples of the thought. Here you have the person who should clearly be the leader, assessing the situation determining (against very strongly ingrained inclination) that this is not the situation for him to be leading and relinquishing the role.
This is a problem for business as well as our nation as a whole. Why don’t we have leaders who show these characteristics? I have some thoughts on this that will be taken up on my next blog posting.
Copyright 2017 Howard Niden
— you can find this (days earlier) and other posts at www.niden.com
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