Lead, Learn, or Get Out of the Way

Patricia Leonard, Executive Vice President of the American Management Association, is a woman with a mission: to build the AMA’s U.S. market presence in a way that truly “breaks from the pack”. When I had lunch with her recently, I was impressed with her passion and foresight. But what doubly impressed me was her expectations of the people who work at AMA. I think it was Tex Schramm, the Dallas Cowboy general manager from 1960-1989 who described his management philosophy as “Lead, follow, or get out of the way!” Schramm was obsessive about raising the team’s performance, and as far as he was concerned, people on the payroll had to make a clear choice: to step up to a leadership position and make things happen; or, to heed the leaders’ directives and implement them like crazy; or, to simply “get out of the way”—which means either leave, or minimally, don’t create any friction or hurdles to the progress under way. It worked. Under his helm, the Cowboys franchised transformed themselves into the incredibly successful “America’s Team” brand. Pat Leonard says that’s not good enough any more. Her motto is: “Lead, learn, or get out of the way!” In today’s knowledge economy, where the application of cutting edge talent is the best predictor of corporate competitive success, employees can no longer simply choose to “follow”. Corporate innovation and performance is an all-hands phenomenon. So from Leonard’s perspective, each employee (including manager) must choose to lead something (a product launch, the execution of a project, a cost-reduction effort—something!). If you can’t do that, she believes, then take it upon yourself to learn what you can do. Learn new skills, technologies and techniques. Learn about new markets. Learn about the deficiencies of the organization and what can be done to address them. Don’t wait for the company to provide you with learning. Seek opportunities until you figure out what you can do to improve things and spur the organization to further heights. At the end of the day, my take on all this is: Whether you’re a leader or a learner, or both, at your performance review you don’t brag about how well you’ve done your job over the past year. Good performance is a given. Instead, you brag about how much you’ve changed your job to create new value for the organization.Knowing Pat, she has even less patience with those who would choose to simply “get out of the way”. Companies can’t afford to keep that sort of organizational lard of employees who retired a few years ago but never told anyone

Lead, Learn, or Get Out of the Way

Patricia Leonard, Executive Vice President of the American Management Association, is a woman with a mission: to build the AMA’s U.S. market presence in a way that truly “breaks from the pack”. When I had lunch with her recently, I was impressed with her passion and foresight. But what doubly impressed me was her expectations of the people who work at AMA. I think it was Tex Schramm, the Dallas Cowboy general manager from 1960-1989 who described his management philosophy as “Lead, follow, or get out of the way!” Schramm was obsessive about raising the team’s performance, and as far as he was concerned, people on the payroll had to make a clear choice: to step up to a leadership position and make things happen; or, to heed the leaders’ directives and implement them like crazy; or, to simply “get out of the way”—which means either leave, or minimally, don’t create any friction or hurdles to the progress under way. It worked. Under his helm, the Cowboys franchised transformed themselves into the incredibly successful “America’s Team” brand. Pat Leonard says that’s not good enough any more. Her motto is: “Lead, learn, or get out of the way!” In today’s knowledge economy, where the application of cutting edge talent is the best predictor of corporate competitive success, employees can no longer simply choose to “follow”. Corporate innovation and performance is an all-hands phenomenon. So from Leonard’s perspective, each employee (including manager) must choose to lead something (a product launch, the execution of a project, a cost-reduction effort—something!). If you can’t do that, she believes, then take it upon yourself to learn what you can do. Learn new skills, technologies and techniques. Learn about new markets. Learn about the deficiencies of the organization and what can be done to address them. Don’t wait for the company to provide you with learning. Seek opportunities until you figure out what you can do to improve things and spur the organization to further heights. At the end of the day, my take on all this is: Whether you’re a leader or a learner, or both, at your performance review you don’t brag about how well you’ve done your job over the past year. Good performance is a given. Instead, you brag about how much you’ve changed your job to create new value for the organization.Knowing Pat, she has even less patience with those who would choose to simply “get out of the way”. Companies can’t afford to keep that sort of organizational lard of employees who retired a few years ago but never told anyone

Intangible World

Every time I read about a CEO explaining that his goal is to be the “biggest” player in his industry, I know that his company’s shareholders will ultimately suffer. A McKinsey study shows that over 80% of the S & P 500’s value can be attributed to “intangible” factors—which means that investors don’t appraise the future value of a company by its book value today—the size of its tangible assets carried on the balance sheet. Research indicates that projections of future earnings and cash flow are primarily influenced not by a company’s mass, size, and physical assets, but by its volume of intangible, such as: knowledge and data systematically distributed throughout the firm, cutting edge talent and the ability to attract the best and brightest, institutionalized foresight, a culture of constant innovation, speed and agility in capturing fleeting market opportunities, and reputation for rapid, efficient execution. Companies that have an abundance of intangibles grow in a healthy, profitable way, and ultimately their growth allows them to capitalize on the benefits of size--like scale, leverage, synergy, and marketing reach. But companies that focus on the tangibles (and too many leaders focus much of their time massaging current tangibles, or growing them via questionable acquisitions just to build sheer size and scope) are much more likely to collapse under their own weight. A couple years ago I consulted with a multibillion dollar company whose tangibles were staggering: a gargantuan balance sheet, a substantial payroll, a huge capital budget, and an immense product line. But this company’s intangibles were miniscule relative to its size. The company was marked by a sclerotic multi-layered management hierarchy, little innovation in product or delivery, paralysis in decision-making, archaic information systems, glacial bureaucracy, a dry new-product pipeline, and a hypercautious risk-averse culture. The result: a loss in net income and earnings for each of the prior eight quarters and a market valuation significantly lower than many smaller but more adventurous and cutting-edge (a.k.a. intangible) competitors. Even the products and services that are value-adding have become more intangible. Customization, design, speed to market, the “gotta-have-it” quality of the product—all that is intangible. The other stuff—the actual product or service—is more quickly imitated and commoditized. There's no sustainable growth opportunities in simply making ordinary widgets; the value-add occurs when embedding the widget into a bigger, intangible “widget solutions” package. Intangibles filter down to our jobs. Jobs with more intangibles pay more than jobs that are primarily tangible. If you’re a professional or manager, your kids probably think your work consists of talking on the phone, attending meetings, and pecking away on your computer. If your company tries to compete on tangibles—regardless of its size—it’ll be overwhelmed by cheaper foreign competitors on one end, and by innovative domestic (and international) competitors on the other end. Nowadays, it’s all about building your firm’s reservoir of intangibles. How much of your leaders’ daily attention and resources is spent on that vital quest?

Two Cheers for Good Government

I needed my son's birth certificate right away and I couldn’t find it, so I took him to the local government office that dealt with those documents. As we drove into the city, I felt a sense of mild dread. I envisioned waiting endlessly in a long, impersonal queue, then dealing with a grim bureaucrat who would somehow prolong my frustration with slow, meticulous indifference. In fact, as I glanced at my watch while seeking a parking spot, I realized that I had really screwed up because the time was nearing noon, and I was certain that regardless of how many “customers” would be waiting for documents, government employees would shut down their operations for their convenient lunch at the stroke of 12. Sure enough, the queue snaked around the corridors, and sure enough, when the noon hour hit, one of the two windows slid shut. But wait! Amazingly, the other window stayed open. My goodness, someone in charge actually considered the needs of people who needed the services of government. Yes, our wait was exacerbated because only one window remained open, but as I explained to my son, in the “good old days” both windows would have clanged shut, leaving everyone outside stewing in frustration for at least an hour. It was a small improvement, but an important one. But wait, there’s more. As my son and I moved forward, we passed cushioned benches positioned at intervals for people to actually sit on, which we did. Somebody in charge actually thought about making the waiting period more comfortable. And then, to my shock, a real human being actually came out of the office and, with a smile, walked up and down the queue asking people if they had any questions about the forms or procedures. And he actually helped some people fill the forms out. And he loaned me a pen to make a correction on one of the questions. And he was friendly! Not only that, when I finally reached the window, even the people behind it were cheerful, and prompt, and helpful. And quick, since the computer readily spit out the birth certificate. Things worked. All of this is small stuff, to be sure. But all the little things that vendors do to make customers feel valued is what customers remember. Those little things changed my entire experience, as well as some of my more egregious stereotypes of government service. In fact, as I reflected upon our experience that day, I remembered that I had even saved time by being able to download the documents I needed to fill out at home. Another “little” customer service that mattered.I guess government is learning. I can’t give it three cheers yet, because that damn window closing at lunch time (the only time when many “customers” have the opportunity to break away from work) more than doubled my waiting time. But when I consider what “service” used to be like at City Hall, I think that two cheers is pretty darn good.

The Value (?!) of Suing Ten Year Old Girls

Illegal downloading of music is devastating the Big Music industry to the tune (no pun intended) of billions of dollars of lost sales and market capitalizations. One recording label executive told me that a high profile band his company has under contract sold 4 million CD’s last year. Sounds great, except he said that it should have been 8 million. Half the market disappeared in a haze of cyberspace. I’d be frustrated and angry too if I were him. And I wouldn’t preclude the use of attack lawyers to go after the big-time, mass-volume, truly egregious lawbreakers. But when an industry sends out teams of shark attorneys to harass pimply faced teenagers who illegally download songs off the Web, they’re guilty of strategic myopia and hysterical desperation. Not to mention stupidity. Think I’m exaggerating? I could give you too many sad examples, but try this one, which I picked up in the June 27, 2007 issue of The Oregonian. In 2005, the recording industry sued Oregon resident Tanya J. Andersen, 44, a disabled single parent, accusing her of violating copyright laws by illegally downloading music onto her computer. Initially, Andersen told the corporate lawyers she had never illegally downloaded music but was told she had to pay $4,000 to $5,000 or she would be ruined financially. The lawyers further threatened to interrogate Andersen's 10-year-old daughter, Kylee, and indeed they tried to contact her directy. A woman claiming to be Kylee's grandmother called the girl's former elementary school inquiring about her attendance. Sounds like a nightmare, right? Andersen offered to have her computer inspected. Instead, the recording industry sued her. What happened next is so bizarre that I want to quote The Oregonian directly: The record industry claimed that she used a certain Internet name to illegally download music at 4:20 a.m. on May 20, 2004. Andersen searched the Internet for the name and easily learned that it belonged to a young man in Everett, Wash., who admitted on his MySpace account that he illegally downloaded music. Andersen provided the information to the record industry, but officials responded by publicly accusing her of downloading a series of violent, profane, obscene and misogynistic songs. Andersen was an avid user of mail order CD clubs, so (the officials) knew that Ms. Andersen listens to only country music and soft rock. The recording industry's expert finally confirmed that Andersen's computer had not been used to download music, but attorneys still demanded that she pay money before they would drop the case. "They wanted it to appear publicly that they prevailed," Anderson’s counter suit claims. "When Ms. Andersen declined to pay them, defendants (the recording officials) stepped up their intimidation." Two years after filing the lawsuit, the recording industry agreed to drop the case only if Andersen dropped her counter charges. "They also emphasized that that if she did not abandon her legal rights, they would continue to persecute her and her young daughter, and again demanded to interrogate and confront her little girl," the suit says. Andersen finally filed a motion forcing the recording industry to provide proof that she illegally downloaded music. Hours before the deadline to respond, the recording industry dropped its case. Even if Anderson had really downloaded some illegal tunes, the industry’s storm trooper tactics would have been ridiculously counterproductive. She’s one of millions upon millions around the world. The real issue is this: If you’re a company that’s stuck in a compulsion of using lawyers to defend a broken business model, not only are you merely slowing down the bleeding, (and just temporarily at that), but even worse, you’re also failing to look forward and develop innovative alternative business models that either bypass or better yet, fully capitalize on the new technologies. (Look at what Apple did with iTunes and iPods, for example). Even if you win a few lawsuits, you can’t fight the forward migration of innovation and change. So either you’re part of the process and leading a new agenda, or you’re part of history. As Gwen Stefani’s manager Jim Guerinot says: “The major (recording) labels want to say the glass is half full. I think everybody is getting the message: You better get a fucking smaller glass. The music business is a different game.” Crudely put, but right on target. It’s true for a lot of other industries too. The rules have changed. You’ve got to fill the shrunken glass with new value. And new value doesn’t come from filling the glass with lawyers hell bent on recapturing the past.