Thursday, April 27, 2006

The 6 C’s of Leadership

I just came back from Mike Milken’s Global Conference in Los Angeles, where I participated in a panel discussion of how small to medium sized businesses can capitalize on the opportunities of globalization. Great conference, though I confess it’s daunting to be in a hotel surrounded by Nobel laureates.

But I digress. No matter what subject was discussed during the three days—national security, global warming, health care, corporate competitive advantage, etc.—the subject of leadership was never far behind. Unsurprisingly, the need for leadership today is more important than ever before. Rafael Pastor, the ex-President of USA Networks and current CEO of Vistage International, and Barry Sternlicht, the ex-CEO of Starwood Hotels and current head of Starwood Capital Group, both had some astute comments on the subject. Coincidentally, and surprisingly, both of them summarized their perspectives with concepts beginning with a “C”, so it’s really easy to combine their viewpoints and come up with a "C" list of leadership attributes necessary for success in the 21st century. I wish I had enough poetry to come up with this list, but at least I can use my own words in describing the six elements:

1. Courage: Great leaders take risks. They are willing, even excited, about entering unchartered waters. They face their own fears, their own demons, the doubts of naysayers around them, the very real structural and financial hurdles before them—and they go forth anyway. That takes planning and discipline, to be sure, but most of all it takes courage.

2. Creativity: Great leaders embrace imagination. They foster innovation. If they themselves don’t possess those attributes, they surround themselves with people who do. They exude impatient with the status quo. They understand that doing the same-old, same-old is a recipe for decline. Their message to the troops is-- challenge conventional wisdom and break new ground. Do it with economic logic and operational discipline, yes, but do it with creativity.

3 and 4. Compassion and Caring. Sternlicht used these words in one phrase. For great leadership, he emphasized the importance of caring deeply about what you’re doing, about the welfare of your people and customers, and about doing things with a strong moral fiber. What that tells me is that analytically detached, amoral executives need not apply. Great leaders have emotional and ethical as well as intellectual integrity. They love, and they love ethically.

5. Curiosity: Great leaders come to the party with a sense of wonder and awe. They restlessly and repeatedly ask questions like-- What’s out there? (let's check it out!) What’s behind there? What’s underneath there? What if? Why not? When can we try it? What will happen? What did happen? What did we learn? What’s our next step?

6. Consistency. Sternlicht noted that great companies “consistently surprise customers.” I believe the issue of consistency is essential for effective branding and sustained competitive success. Great leaders create an environment where C’s #1-5 aren’t a one-shot flash-in-the-pan deal, but so steady and ingrained that people inside and outside the organization can count on them. They can count on the leader, and the organization manifesting traits like courage, creativity, compassion, caring, and curiosity.

Six C’s. Easy to remember. Do you have the conviction and commitment (two more C’s?) to carry (sorry, I couldn’t resist) them out?

Wednesday, April 19, 2006

The Content or the Box?

In the current issue of Vanity Fair, Michael Wolff writes an interesting profile of Apple CEO Steve Jobs. One of his passages is deeply insightful. Here’s what he says:

“When Jobs is thinking about media he is, unlike all of the M.B.A.’s in New York and second-act-reversal scriptwriters in L.A., thinking from a purer state—he’s thinking about Marshall McLuhan, patron saint of the Bay Area’s digital culture, and his holistic, even biological media world. It’s the technology, stupid. It’s the experience, stupid. It’s the box that gets us off and makes us what we are….To Jobs, with his 99-cent-song and $1.99-video downloads, content is the commodity. The machine is the precious, unique, coveted, valuable, holy vessel. The machine is the idea.”

For Jobs, like McLuhan, the medium is the message. Why is this fascinating? Because for years we’ve been hearing the media, telco, and cable conglomerates say the very opposite, that the medium is the commodity and the message, the content, the programming, is the value-add.

My conclusion is that either point of view can be right, or wrong. Does that sound Zen-like? Well, try this for size: In today’s marketplace, everything becomes a commodity, but nothing needs to be a commodity.

Here’s what I mean. Whether it’s the content or “the box”, it all becomes commoditized and imitated by competitors eventually—usually sooner rather than later. At the same time, any company can create genuine value and competitive advantage by innovating in a way that matters to customers, whether it’s in the content, or whether it’s in the box. Nickelodeon has applied delightful imagination to content, and pumps that content through the most mundane cable. Apple has applied delightful imagination to boxes like iMacs and iPods, and pumps low-cost, low-priced content from a myriad of sources through them.

The lesson? Whatever your product or service, whatever the space you choose to compete in—it’s all ultimately a low-margin commodity unless you’re able to surround it with sustained, disciplined, high-magnitude innovation. The content or the box? It’s either, or neither, or both.

Tuesday, April 11, 2006

Back to the Future Redux

Back to the Future Redux" by Oren Harari April 11, 2006

Since I’m no dumber than your average person, whenever I find myself in Hawaii on a business trip, I try to squeeze a few extra fun days. So last week, while taking a solitary hike in a remote area in the Big Island—nobody else around, trail covered with brush--I started to fantasize about what would happen if I turned the corner, stepped into a time warp, and suddenly found myself facing a group of Englishmen who beached their sailing ships in Hawaii 200 years ago.

Presumably, we could converse with each other, but how would they react when I told them I was from the year 2006? They wouldn’t believe me until they started to examine me, I suppose. Now my fantasy mind went into overdrive. They’d look at my cross-trainer shoes and my designer day pack and I think they’d be impressed. They’d appreciate the significant advances in engineering and materials science, not to mention the fashion.

But at least they could relate to those products, because they too wore shoes and carried bundles on their backs. But what would happen if they asked me how I got to that remote point in the Island? I’d have to explain concepts like jets and automobiles (and rental cars!) that carried me from the mainland to the islands to the hiking path in just a few hours. And what would happen when they reached into my pack and pulled out a cellphone? In their day, communication was a hit-and-miss affair, a letter that would, maybe, reach England after a few months, and a reply that, maybe, would get back to the original writer in another few months. How could I possibly explain that in 2006 I could punch a few buttons on this little hand held and talk clearly with their family members across the ocean? How could I possibly describe wireless technologies, or the supportive digital, mobile and service infrastructures?

And then they’d pull out my iPod. Right. I’d have to explain the iTunes platform, and peer-to-peer file sharing. Now that would be interesting. I’d help one of them put in the ear pieces and crank up Lynyrd Skynyrd or ZZTop and just step back and see their reactions (and would they even consider it music?)

My point is that we’ve advanced so far in science, technology, engineering, and design over the past 200 years that even though my English friends and I would speak the same language, we could no longer communicate. Our experiences would be too profoundly and “paradigm-ly” different. Inasmuch as the rate of advance in science, technology, et al continues to accelerate, will our grandchildren and great-grandchildren react to our lives the way I did to my mythical English sailors?

I look at my young kids and I think what great possibilities are unfolding in front of them and their descendants. Today, we’re all laying out the platform for a future that is completely unfathomable to us today. And if we can just keep from killing each other off, or screwing up the environment, or weakening the great free market system that fuels so many wonderful advances for so many……Ah well, enough daydreaming. Back to the future, I turned around and headed back to the trailhead and my car.

Wednesday, April 05, 2006

Who to Hire, Part 3

In today’s knowledge economy, we need new criteria for hiring and promoting people. In my March 22 and March 29 blogs, I made the case that “talent” ought to be a fundamental element in those decisions. Today, I want to point to another often overlooked, but fundamental element. I call it “fit.”

To understand "fit", we have to first appreciate the concept of "tone". Good leaders set a tone for their organizations. Tone is the culture, the climate, the vibe, the mood, the atmosphere that expresses your organization's values and soul. New York City Mayor Michael Bloomberg, explaining how he established his dominating Bloomberg LP financial-data empire, states that one of the most important things done by a CEO or mayor is to "set a tone."

Your job as a leader is to shape the tone that will help you promote competitive success, and then take it seriously. When you do, you’ll hire people who seriously “fit” that tone. If they don’t fit, don’t hire them, and certainly don’t promote them—even if they have talent. In other words, don’t recruit people who may have great credentials but are a lousy match with the values and mood of your organization's tone. For example, both Public Financial Management (a financial services company) and Genentech have strong tones marked by collaboration, openness, caring, and performance accountability. Both companies are getting better at deliberately rejecting strong, talented job candidates who come across as overly concerned with rank, salary, and personal power.

What these companies have learned is this: Fit counts. Yes, talent counts—a lot. But so does the integrity of your organizational tone. Talent without fit is a prescription for dysfunctional conflict and chaos. Fit without talent is a prescription for performance deficits and mediocrity. You need both.

So don’t be expedient. Don’t lower the hiring bar just because you are mesmerized by a candidate’s past achievement, or, on the other end of the scale, if you quickly need a warm body to fill a job. In today’s violently competitive and fragmented marketplace, things like great plans, great reservoirs of capital, and great products are certainly helpful for competitive success, but none of them are as potent or predictive of sustained success as are great people. So stack the deck in your favor: Patiently seek high-talent and high-fit people for your organization.