Companies in Transition

                                                                                   September 2009

Dear Friend,

      The theme of this month's issue of Companies in Transition is leadership. What is it? How does it work? Why is it important? The credit crisis and the Great Recession have placed enormous burdens on our business and political leaders. Some of those leaders have truly distinguished themselves while many others have been found wanting.

      In the midst of the crisis, stakeholders of every stripe - shareholders, employees, taxpayers and their representatives in government, among others - have been demanding that their leaders demonstrate effective leadership in their words and actions, as well as in the results they seek to achieve. While a few among us were born leaders, the rest of us must do it the hard way.

      We hope you enjoy this issue of Companies in Transition.

Wayne Wilson

5 Dimensions of Leadership

By Wayne Wilson

      Leadership is often hard to define. Rather than try, many people simply say, “I know it when I see it.” Indeed, stories are an essential mode by which we communicate important values to other people.

      Stories can illustrate instances of brilliant leadership as well as describe abysmal failures. They are descriptive but not necessarily prescriptive. And they are often not very useful in helping a person to understand what exactly they need to do to become an effective leader.

      Leadership has multiple dimensions. It takes many different forms depending on the timing and nature of the challenges an organization faces. Some of these dimensions come naturally to a would-be leader while others must be learned or otherwise compensated for.

      The truly great leaders are those who can effectively integrate these multiple dimensions into a unified and flowing whole persona.

      Here are five important dimensions of effective business leadership:

Judgment is the Foundation of Leadership...

…but it doesn’t come naturally. [1]

      A business owner once said to me, “You make pretty good decisions.” At the time, I was working hard to gain operating control of a $250 million business. I had run a business previously but nothing of this size. What did her comment really mean?

      Good decisions are usually based on the exercise of good judgment.

      According to Bennis and Tichy, judgment is the core of leadership. [2] Some of the elements of effective judgment include:

• Having had relevant prior experiences

• Drawing appropriate lessons from those experiences

• Integrating those prior experiences through contemplation and reflection

• Access to valid sources of timely information

• Openness to new or different ideas and insights

• Having and exhibiting character – integrity, independence and objectivity

      Judgment may not come naturally but it can be learned.

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[1] Warren Bennis and Noel Tichy, Judgment Trumps Experience, WSJ, 11/29/07, p A19.
[2] Ibid.

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Practicing the Art of the Possible

“I do believe that life is a continuous thing. You can’t just chop off your history and start anew.” – Ang Lee [1]

      All leaders seeking to bring about significant transformations struggle to bridge the gap between who they are (roots, history, past successes and failures) and who they hope or wish to become. Their organizations’ greatest strengths and their greatest obstacles are both rooted in their histories.

      Consider these two examples:

• Mikhail Gorbachev [2] whose perestroika led to the end of the cold war but also the collapse of the former Soviet Union, as well as his own political denouement; and

• Roger Smith [3] who tried to transform General Motors during the 1980’s but could not halt its decline.

      Gorbachev may be a bit of a hero to some Americans because he chose our way (free press, free elections) but many Russians believe he sold-out to the Americans. Roger Smith, on the other hand, exhibited grand visions about efficient robotic factories and a technology empowered business, but his vision exceeded his and GM’s ability to execute.

      So what are the lessons for owner/CEOs seeking to bring renewal to their organizations?

• Never forget who you are – effective change is built on, and constrained by, your past successes and failures.

• Practice the art of the possible – everything you could hope or pray for will not be possible during your tenure. Focus on those strategic issues where real change is possible.

• Be a good steward – strive to leave the organization better than you found it. Someone else will follow you.

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[1] Oscar winning director of Lust, Caution; Crouching Tiger, Hidden Dragon; and Brokeback Mountain; et al quoted in Man Without a Country, WSJ, 12/1/07, p. A13.
[2] Gorby’s Choice, Ibid, p. A1.
[3] Remembrances – Roger B. Smith (1925 – 2007), Ibid, p. A4.

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Confident, upbeat consistency carries the day

      Confidence, Optimism, Consistency – These are essential traits for the owner/CEO or manager who would successfully transform a company or any other organization.

      Employees, like voters, recognize that their personal fates often depend on the actions of their leaders. They are constantly looking for signs that:

• You know what you are doing (confidence),

• You are optimistic that the plan or goal can be achieved (sunny disposition), and

• Your consistency of words and action demonstrate that you really do have a well thought out plan which might actually work (consistency).

      In a prior life as a corporate executive, one of the most productive (and enjoyable) parts of my job was getting out and talking to employees and associates. They need to see you, hear you, test you (through there questions), and go away confident that you and they are in it together.

      When employees and associates are confident about your leadership, they are more likely to do their part to make good things happen.

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