The process of building and sustaining a high performance company requires a high level of leadership capability. Jim Collins uses the name “Level 5 Leadership.” Larry Bossidy and Ram Charan, focus on highly effective executive leadership. Lou Gerstner emphasizes superior executive leadership.
I prefer the term strategic leadership because it emphasizes what is required to create a great company. It is the process of attracting, energizing, focusing, aligning and retaining people to accomplish results and build a great organization.
The CEO and the senior team are responsible for the strategic health of the business. Strategic health is an organizational state in which short and long-term goals, objectives and actions are balanced and adaptability, innovation, continuous learning and improvement, and speed are pursued as paths to superior results.
The CEO or division general manager is the key. His or her values and daily behavior create the environment for the senior team. He or she selects the members of the senior team either by recruiting and hiring them, or by retaining them in their positions.
A leader who is trying to build a high performance organization needs to start by taking stock of himself and the members of the senior team. He must understand himself well and be aware of his own values and capabilities and how these impact his daily behavior as a leader. Also, he must understand the values, capabilities and daily behaviors of the members of the senior team.
Daily behavior is the currency of leadership. Through daily behavior, a leader creates the environment which determines the focus, motivation and performance of the people on which the success of an organization depends.
I have had the good fortune to work with great leaders and to practice strategic leadership myself as a CEO. Out of these experiences, I have developed a keen appreciation for the practice of leadership.
The key leader sets the tone of the organization through his or her daily leadership behavior. Building and sustaining a great company requires the key leader to be proficient at:
- Leading the company,
- Working with a team,
- Establishing and communicating direction,
- Aligning people with the direction,
- Developing managers and leaders,
- Empowering, supporting and motivating people,
- Identifying and making tough decisions, and
- Keeping him, or her-self mentally and physically fit to lead.
These are the tasks of strategic leadership.
Leading the Company
Start with yourself. Your top priority is to be an effective leader. Be aware that you are constantly “on stage,” being observed by managers and employees. Your daily behavior is the key to your effectiveness as a leader. Conscious awareness that your daily behavior has the strongest impact on what happens in the company over time will cause you to behave in a purposeful way.
Try to handle the many small situations that occur on a daily basis by acting rather than reacting. Be aware that your handling of even small situations with your direct reports and others has a significant impact on how people do their jobs.
Try to set a positive example in your actions. The best leaders I have worked with do this by treating each person with whom they interact with respect and dignity. Every transaction is important. A worthy goal is to have each person that you communicate with leave the interaction with a feeling that they are important to you and to the success of the company. Take the time to get to know people. Ask them for input, listen to what they have to say and express your appreciation for their input and efforts.
Place a high value on personal integrity. Be careful to act with integrity in your dealings with others. Try to be honest and candid in your interactions with everyone. Take the time to explain the reasons for your decisions and invite questions about issues and give direct answers. If you can’t answer directly due to confidentiality, clearly state that you are not able to discuss the issue at the time.
Be serious about commitments. Keep commitments, even in small matters such as starting meetings on time and responding to email and telephone calls. Avoid making commitments that you can’t fulfill. Good intentions that aren’t fulfilled erode your credibility as a leader.
Make a conscious effort to remain calm in times of stress. Anxiety and fear are enemies of teamwork and effective decision-making. It is important to manage your own anxiety and reduce the anxiety of individuals and teams when the heat is on.
Be decisive. Decisions must be made and followed through. Use participation to involve others and build commitment to decisions. You do not need to make all the decisions yourself. Try to be sensitive to accord others the ownership of specific decisions. However, be clear that decisions must be made in a timely manner and don’t allow them to slide.
Assembling, Building and Working with a Team
At some point you will be faced with the challenge of taking a group of executives and developing them into an effective management team. When you are, a good place to start is to meet with your direct reports in a group setting. Begin the meeting by explaining your expectations of the executive team. Tell them that, from this moment on, you expect them to work together with you to identify and solve the company’s problems.
Explain that you expect that it will take some time for all of you to learn to work together as an effective team. Ask each member of the group to place working as an effective team member as their number one objective and state that teamwork will be a key criterion in evaluating their performance. Emphasize that, in addition to teamwork at the executive level, you expect that each member of the executive team will actively foster teamwork in the company.
Plan and implement an offsite meeting for the executive team to go over every aspect of the company’s operations. A professional facilitator can be a great asset here. Following the meeting, establish regular weekly executive team meetings to follow-up on the list of action items and to engage the team in problem solving as an ongoing activity.
Numerous times in the first months of building an executive team, individual direct reports will raise an issue with you. Whenever the issue involves other members of the executive team, or the effectiveness of the business, ask the person to raise the issue at the next team meeting. It can take three to six months before all the team members begin bringing issues directly to the team meeting without first raising them with you. If you are serious about building a team, you must consistently require people to raise their issues and solve them in the team.
Establishing and Communicating Direction
Establishing, communicating and sustaining a clear direction for the company are ongoing challenges. People need to work through a process that enables them to develop a depth of understanding of the business and its ever-changing environment.
Periodically, interview your direct reports as part of your leadership practice. Ask each of them to define the company’s vision, mission and strategy. Ask staff at all levels where they think the company is going and if there is anything they needed to do their jobs more effectively. From these conversations, you will learn whether there is a sense of a sharply defined direction among your direct reports and the rest of the company.
At an offsite meeting, have a skilled facilitator take the executive team through a process of developing a common vision, defining a mission statement and creating, or updating an integrated strategic plan for the business. The strategic plan may take a series of offsite meetings to complete. In each meeting, key action items will be developed to support the strategy. A member of the executive team should take ownership of each action item.
Following the offsite meetings, work with the team to develop a clear presentation describing the company’s strategy and goals. Personally deliver the presentation to employees at meetings. Ask your direct reports to sit down with the people in their areas of responsibility, review the presentation, engage them in dialogue about it and provide you with a written summary of their issues, concerns and suggestions.
As you move around the company, engage people in conversations about the company’s direction and the key challenges it is facing. Whenever you discover that people are not clear about where the company is going or what its priorities are, tirelessly explain these issues and ask people for their opinions and ideas. Ask your direct reports to follow the same practice when they are with company employees. It will take about six to nine months for you to be able to go into any part of the company and find that people clearly understand the company’s direction, challenges and priorities.
When things change, as they certainly will, redo the process described above. In today’s fast paced world, people are so over stimulated with information that it requires continual attention to keep an organization focused and executing in the appropriate direction.
Aligning People with the Direction
Once your company’s direction has been established and you are sure that it is well understood throughout the company, it is time to focus on getting people aligned with it.
You can use several processes to accomplish this. First, take the management team offsite again. This time, focus on ways to get people aligned and committed to the business direction. Engage the management team in designing an appropriate program to improve your organization.
Second, follow the offsite meeting with the implementation of the organizational improvement process. Establish functional and cross-functional teams to identify ways of implementing your business plan, identify obstacles and actions to overcome them, and improve work processes.
As you move around the company, engage people in conversations about their work and how it contributes to your company’s success. Influence your direct reports to engage in the same types of conversations with their teams. Whenever a significant action is implemented, have the management team explain how it is tied to the company’s direction and business plan to employees.
Third, get out into the company and meet personally with staff members in large meetings and small groups to focus on your company’s direction and progress. Involve the members of your management team in the group sessions by assigning responsibility for planning and facilitating meetings to each of them.
Finally, pull together small, cross-functional groups for informal conversations over lunch.
These kinds of engagements get people involved with and committed to the company’s direction and business plan.
Developing Managers and Leaders
Developing managers and leaders is an issue that you must take seriously. Again, if you don’t, few others will. Make leadership development a key personal responsibility for you and the other members of the executive team.
If you want to have a great company, demonstrate your commitment by insisting that your company have an effective management and leadership development process. Devote at least one offsite per year to reviewing your management and leadership talent and development plans.
As part of the leadership development process and in preparation for your leadership development review offsite, meet personally with the managers and professionals who work for your direct reports. Ask your direct reports to come to the offsite prepared to discuss the management and leadership capabilities of each of the people who they manage and of the people at the next level who work for their direct reports. Expressly require each of your executives to meet one-on-one with the people who work two levels below them.
At your leadership development offsite, walk the executive team through a thorough review of the management and leadership capabilities of the key managers and professionals in the company and review the development plans for each of them.
Following the offsite, take personal responsibility for following the development plans of the people who work for your direct reports. Require the other members of your executive team to take the same responsibility with respect to the development of the people who work for their direct reports. This skip-level responsibility for development is one of the most effective ways I have found to drive effective management and leadership development.
Make management and leadership development a standing issue on the executive team’s weekly agenda. Use a portion of the meetings to identify opportunities to give managers and professionals challenging assignments to assess and develop their capabilities.
When an issue needs to be resolved, solicit the names of those who would gain the most developmental benefit from working on the issue. Where practical, assign a team leader and a team to work on the issue. Each time an issue is handled in this way, assign one of the members of the executive team to be an “issue owner” and take responsibility for supporting the team and its leader.
Demonstrate your commitment to development with your executives. Know the capabilities and interests of the members of your team. Look for opportunities to stretch and develop them by delegating tasks and issues that you might otherwise handle yourself.
Most of your key people will have depth in their field or function. Look for opportunities to build breadth of experience by giving them responsibility for things where they have had little or no prior experience. For example, if you have a key management vacancy, give one of your direct reports temporary responsibility for the area while you are recruiting to fill the vacancy. Or, rotate the person into the open position for a period of time and let one of his or her key people take over for him or her.
Another effective developmental tool is to ask your direct reports to delegate key tasks which they would normally do themselves to high potential people. The executive can then serve as mentor and coach to the person doing the work.
Empowering, Supporting and Motivating People
Each day brings the opportunity to invest your time and energy in people. Whenever a problem needs to be solved, ask the people closest to the problem to get involved. Create teams made up of executives, managers and staff members to work together on issues and problems. Ask the teams to develop recommendations and action plans, and empower the team to implement them.
If a team’s recommendation does not work, or falls short of its objectives, call a meeting to critique the solution. Start by recognizing and rewarding the team for taking action. Explain that the critique is to facilitate learning and improvement in the future. Ask questions to probe the team members about what they have learned from their attempt to solve the problem and what they would do differently.
Encourage your direct reports to involve the appropriate people in decision-making and to accept their peoples’ decisions whenever possible. Ask them to facilitate learning from decisions that do not work as planned.
When your management team is reviewing progress on an initiative, ask the people actually working on the project to come in to give a briefing and answer questions. Hold critique sessions after major events. Schedule time at key meetings so that the staff present at the event can critique the meeting and identify ideas to improve the next event.
In addition to creating an environment in which people are highly involved, find ways to support people on an individual basis. As you move through the company, notice the working conditions, the physical environment your people are working in and the equipment that they have to do their work. If you find instances where a person’s productivity is being hampered, take their managers aside and ask them why they are not doing something about it. It is surprising what small things, like painting a dingy workspace or replacing an antiquated computer, can mean to people. It says much louder than words that you and the company care about people.
Search continually for accomplishments that are worthy of recognition. Meet frequently with teams and individuals to express your appreciation for how their personal efforts and accomplishments are leading to your company’s success.
Establish a recognition system for key projects and activities. Tie personal recognition, time off, small cash bonuses and stock bonuses to the accomplishment of key milestones. Encourage your direct reports to stay alert for performance and effort worthy of recognition and to provide appropriate recognition and rewards for individuals and teams.
Take the time to send a personal e-mail or a hand written note of appreciation to employees who have made noteworthy contributions to your company.
Identifying and Making Tough Decisions
In your leadership role, be on the lookout for problems and issues that require decisions to move your company forward. Others will make the easy decisions in the everyday course of business. The tough decisions will most often be left for someone else. That’s right, you!
You will know you have a tough decision when you find an issue that no one else will do anything about. Most frequently, tough decisions don’t get made because there is a lack of consensus in the management team and/or the tough decision will adversely affect one or more key people.
I have experienced many situations in which tough decisions have been left to slide. Unprofitable products, initiatives seriously behind schedule, under-performing executives, unprofitable customers, under-performing business units and unclear priorities are just a few of the tough decisions I have run into.
Eventually, if not addressed, the tough decisions accumulate to a point where they can threaten the health of the business. Some examples of situations involving tough decisions may be helpful.
Example 1: Product/Service Strategy. Take an issue like product strategy. It is quite common that members of the management team will have committed considerable effort to particular products and services that are, or could be could be sold.
You may find that your company is pursuing multiple product, or service initiatives. In many cases, each initiative may have one, or more, management team members who are heavily invested in the success of the initiative. In these situations, it is not uncommon to find that resources are spread over so many initiatives that poor progress is being made on all of them.
In this situation, you must take the lead in analyzing your company’s market opportunities and product/service strategy. Would focusing on fewer initiatives and driving them to completion better serve your company?
Take your team through a thorough discussion on opportunities, the resources required by each initiative and the priorities for each initiative. If they can’t agree on which initiatives to kill, then the tough decision will be up to you. It’s hard to stand in the face of opposition from some, or all, of your management team and make a tough decision to kill an initiative, or discontinue a product. If you can’t, or won’t do it, it won’t happen.
Example 2: Capability of Direct Reports. A key part of your job is to be sure the right people are in the right places. To do this well, it is necessary to thoroughly assess the capabilities of your direct reports. A way to approach this problem is to start with your business strategy and create an organization and staffing plan to implement it.
Use the organization and staffing plan as a guide to define your expectations for each of the positions reporting directly to you. Then take a hard look at each of the people filling those positions.
- Are any of your direct reports under-performing?
- Are any of your direct reports lacking capabilities that are critical for their success in the position?
Once you have answered the above questions, meet with each of your direct reports to share your expectations and dialogue about any concerns you may have. If you have an under-performing person, make the tough decision to confront the issue by making it clear that the person’s performance is unacceptable. Establish a 90-day timeline for this person to improve and work with him/her to define 30, 60 and 90-day key objectives to improve performance.
If performance does not reach an acceptable level, make the next tough decision: move the person to another job, or let them go.
Example 3: Poor Quality: You have significant quality problems with a product/service. You get the management team together and there is no agreement on an appropriate response to the problems. This is the point where you make the tough decision to cease shipping and/or recall the product, or to stop offering the service until the problems are solved. This decision is particularly tough if it will cause a significant loss of revenue for the current quarter, or year. This decision will also put a lot of pressure on your team to solve the problem.
When tough decisions are not found and addressed they can become a considerable drag on the business. Looking for, finding and promptly addressing them keeps the business moving.
Keeping Yourself Mentally and Physically Fit to Lead
Leading effectively on a daily basis takes a lot of energy. You need to be physically and mentally available to lead. If you allow yourself to become tired or overly stressed, you will have difficulty staying focused, being purposeful and acting rather than reacting, and setting the positive example required to maintain high performance in your company.
To maintain yourself in the high state of physical and mental fitness required to lead effectively, requires that you:
- Pay attention to your nutrition. Eat a well-balanced diet and avoid over consumption of alcohol and caffeine.
- Follow a daily program of aerobic exercise.
- Pace yourself by actively balancing the demands of leadership with rest, recreation and family.
- Seek the support of others. Develop and use your network of colleagues for advice and counsel. Be adept at asking for help with difficult problems.
Your daily behavior and the daily behavior of your executive team is the primary factor that drives the effectiveness and performance of your organization. Focusing your attention on leading effectively will create the conditions required to build a great company.
One of the key requirements for sustained high performance and competitive advantage is superior customer experience.
 And Collins, Jim, Good to Great, p. 17.
 Bossidy, Larry and Charan, Ram, Execution: The Discipline of Getting Things Done, p. 24.
 Gerstner, Louis V., Jr. Who Says Elephants Can’t Dance?, p. 235.
 Burgin, A. Lad and Koss, Ellee, “Transformation to High Performance”, p. 10.
© Copyright 2017, A. Lad Burgin, Ph.D. All rights reserved.