Leadership Kudos this week go to IBM and CEO Sam Palmisano on the occasion of the company's 100th anniversary. Since taking over from Lou Gerstner nine years ago, Palmisano has built IBM into the world's leading information technology company, eclipsing HP, Microsoft, and Intel. He has done so by focusing on "leading by values," collaboration, and intense focus on meeting global customer needs with tailored systems. Now with 440,000 employees in 170 countries and $100 billion in revenues, IBM's market capitalization has grown steadily to $200 billion.
Leadership Gaffes are awarded to Cameron and Tyler Winklevoss who continue to try to extract more money from Facebook and its founder, Mark Zuckerberg. The Winklevoss twins had an idea for an on-line dating site, not a social network, but they never designed it, got a patent on it, or commercialized it - all of which are clear criteria for intellectual property. To get rid of the case, Zuckerberg and Facebook settled for $65 million in cash and Facebook stock, which is now worth a multiple of that figure as Facebook's value has grown. Recently, a judge threw their case out of court, but these talented twins - Harvard graduates and Olympic rowers - won't give up. As Zuckerberg said, "They should get a life."
Today at 2:00 pm EDT (1 pm CDT/11am PDT) I will be giving a Webinar on "How to become a Better Leader with True North Groups." At this time we will discuss ways to develop as an authentic leader, and the importance of having a support group in your life, including a True North Group. The Webinar will also include a preview of my new book, True North Groups: A Powerful Path to Personal and Leadership Development, written with my colleague Doug Baker. It will be published on September 1. I hope you can join us on line. You can register for free here.
Leadership Kudos this week go to Apple’s Steve Jobs for launching iCloud, yet another game changer from Apple. Look to Apple to enable you to store all your iTunes, books, movies, documents, on-line downloads and photos in one place as you move effortlessly from the iMac to iPad, iPod, and iPhone, which will make our mobile and stationery lives that much easier to navigate. Jobs’ latest breakthrough is a sharp rebuke to the security analysts and media pundits who were calling for Apple’s board to announce his successor when he began his latest medical leave earlier this year. Don’t count Jobs or Apple out quite yet.
Leadership Gaffes go this week to Newt Gingrich and his futile presidential campaign, as 16 of his top aides on campaign staff resign en masse. It’s hard to lead when you don’t have a team, and even harder to run for President from a cruise ship in the Greek Isles. Gingrich vows to forge on, but it’s time for him to return to writing and teaching.
My HBS colleague Tom DeLong has a brilliant new book that I strongly recommend to you: Flying Without A Net: Turn Fear of Change into Fuel for Success. Tom directly addresses the fears that we all have that hold us back & may even destroy us - and shows how to convert anxiety into success. He shows how to draw strength from vulnerability by being even more vulnerable to turn frea of change and failure into fuel for success. It's a great read.
Leadership Kudos of the Week go to Novartis Chair Daniel Vasella and CEO Joe Jimenez: Vasella for his courageous strategies of internal investment in research and diversification into generic drugs, vaccines, and eye care, and Jimenez for his skillful implementation of these challenging strategies. Vasella’s decision to invest heavily in new research headquarters in Boston has led to continuing flow of breakthrough drugs, including recent treatments for multiple sclerosis and gout. Instead of buying other pharma companies, he diversified into generic drugs (now second largest in world), vaccines (creator of H1N1 vaccine), and eye care with $52 billion bet on global leader Alcon. Jimenez is making all these moving parts grow in unison. The stock market, finally recognizing Novartis stands out from pharmaceutical industry’s problems, this week pushed NVS stock to all-time high of $63.35, making its $167 billion market capitalization second highest in industry behind J&J. Since the start of 2000, Novartis stock is up 71% compared to 59% for J&J, whereas Pfizer and Merck have declined 53% and 45%, respectively.
Leadership Gaffes of the Week go to Hewlett-Packard’s board of directors for losing sight of the HP Way – the culture created by founders David Packard and Bill Hewlett – and failing to develop leaders internally. Since 1999, the HP board has gone outside company management three consecutive times in choosing Carly Fiorina, Mark Hurd, and Leo Apotheker, all of whom have tried to put their own stamp on the culture while ignoring the culture that made HP so successful for forty years. Since taking the helm two months ago, Apotheker has replaced ten EVPs and SVPs and half the board with outsiders. Will HP ever recover its former greatness?
Today I was on CNBC’s Power Lunch, responding to hedge fund analyst David Einhorn’s call for Microsoft CEO Steve Ballmer to resign. I strongly disagreed, as I believe Ballmer is making the right calls in expanding Microsoft is making the right moves to build new revenues through diversification. Witness X-Box, Skype, and important partnerships with Facebook and Nokia. Microsoft is experiencing a renewed surge of innovation, just what the company needs at this time in its history. Here’s the video of our discussion.
Leadership Kudos for the week go to Ford CEO Alan Mulally. Joining deeply-troubled Ford in 2006, Mulally has pulled off the greatest corporate transformation in recent decades -- and in the process restored faith in the American automobile industry and the U.S.'s ability to compete globally in heavy manufacturing. An exceptionally humble leader, Mulally's authentic, high-performance style has brought humanity and discipline back to Ford. The proof is in Ford's results: in the most recent quarter Ford sales were up 18 percent, profits up 22 percent, and its share of the U.S. market gained the #1 spot.
Leadership Gaffe for the week goes to IMF chief Dominique Strauss-Kahn, arrested for sexually assaulting a chamber maid in New York. A momentary lapse? Unlikely. Strauss-Kahn has a long history of extra-marital relations. The larger question is why he was trusted with such an important international post. Leaders need to set a higher standard, not seek the lowest common denominator.
Leadership Kudos for this week go to His Holiness the Dalai Lama for his work in creating a more peaceful, compassionate world. He was in Minneapolis last weekend, where we are pleased to have the second largest Tibetan community outside India. Our family had the privilege of being with him at a series of events. He recently turned over the political leadership of the Tibetan people to a democratically-elected leader so he can concentrate his full energies on working toward peace and compassion. His messages focused on secular ethics, not Buddhism, to unite people around finding inner peace through mindfulness and compassion. He is, no doubt, one of the world's great spiritual leaders.
I was on CNBC today with Yale’s Jeff Sonnenfeld commenting on Microsoft’s purchase of Skype. While the interviewers took a short-term view of stock price movements, Jeff and I believe it is an important deal for Microsoft, as Skype has myriad revenue-producing opportunities for growth in the video-conferencing. We use it all the time to stay in touch with our grandchildren in Munich and San Francisco – we’re one of 663 million users. But its potential on the business side is far greater as transmission quality improves and Skype can offer multi-point capability. The latter will be critical for the expansion of small, personal groups, which we call True North Groups (the title of my new book, to be released on September 1, 2011) which want to operate remotely.
Steve Ballmer is doing just the right thing here. I hope this will be the first of many smaller ventures Microsoft acquires. They came close with Facebook three years – for $15 billion – and should pursue “the next great thing(s)” coming in the tech space. Most people don’t recognize that Microsoft has grown from $28 billion when Ballmer took over to $62 billion in 2010, in large part due to internally-created businesses in servers, X-Box and Bing that now account for 40% of its revenues. With $36 billion in cash, Microsoft has plenty of capacity to make a lot of bets on future growth engines. Even if some don’t make it – which they won’t – they may hit on the next Facebook, Google or YouTube.
This is the second portion of an excerpted guide I wrote for my Authentic Leadership class on Why Leaders Lose their way. On the heels of the recent scandals, I believe we must reexamine what motivates inappropriate behavior from leaders at the top of their game.
How can we avoid the pitfalls of falling into the same traps of so many leaders who have lost their way? It starts with devoting ourselves to a lifetime of personal development that strengthens our inner life and keeps us grounded throughout our lives.
To get started, let’s return to the question posed earlier, “What is your purpose for becoming a leader in the first place.” “What are you passionate about?” “What really excites you and turns you on?” “Do you find the intrinsic purpose of your work fulfilling, or is it just a job?”
This may require a reframing of our role from the hero or savior into a servant of the people we lead. This requires a great deal of thought and introspection to bring our egos in line, as most of us go into leadership roles in response to our ego needs in the first place. But which ego needs? The external gratification of people telling us how great we are? Or the internal satisfaction of making a difference in the world through our leadership? Through wealth, fame, prestige, and visible power? Or the deeper knowledge that if you do good work and serve others, that this will be your reward, and the external rewards will be “the frosting on the cake.”
To develop themselves for increasing levels of responsibilities, leaders need to continue their development in seven areas, 1) personal disciplines, 2) managing stress, 3) building relationships, 4) connecting with their communities, 5) focusing inward, and 6) finding balance in our lives.
Being effective in your work and staying sharp to make complex decisions under pressure requires personal practice and discipline. It may be surprising to young leaders to learn that the habits they establish early in life will continue with them for the rest of their professional lives.
Taking care of your body through eating healthily, exercising regularly, and getting your required level of sleep is an important part of being an effective leader. It is difficult, if not impossible, to think deeply and clearly when you’re tired, out of shape, overweight, and stressed out. Some people turn to chemicals to make them feel better, to give them a lift out of depression. But it doesn’t work; they’re just digging a bigger hole for themselves.
Leading is high stress work. There is no way to avoid the stress of being responsible for people, organizations, outcomes, and the constant uncertainties of the environment. The higher you go, the greater your freedom to control your destiny, but also the higher the level of stress involved. The question is not whether you can avoid stress, but how you can control it to maintain your own sense of equilibrium.
Managing stress requires discipline. Some people practice meditation and/or yoga to center themselves and relieve stress. Others find solace in prayer. Some people find they can relieve stress by taking a long run. Still others find relief through laughing with friends, listening to music, watching television, attending sporting events, reading, going to movies, or watching the performing arts. It doesn’t really matter what you do, as long as it works for you to manage the stress in your life and enables you to think clearly about your work and personal issues.
Building Relationships: Who Will Be There to Help?
Ask yourself the question, “Who in my life influences me in profound ways? How do I stay connected to them?” Few of us can stay centered all by ourselves. We depend upon the people in our lives to keep us grounded – those who know us best and to whom we will really listen. For many of us that person is our spouse or our partner in life, because they know us better than anyone else. They are not impressed by our titles, our prestige, or our growing accumulation of wealth. In fact, they are worried that these outward symbols may be causing them to lose the authentic person they were attracted to in the first place. In their presence it is difficult to use our false self or our dominant tendencies to avoid having them hold a mirror up to us that reflects our true behavior.
But we shouldn’t put the entire burden on our spouses or partners. All of us need mentors. A mentor is someone whom we turn to for advice and counsel when we are facing difficult decisions or irresolvable dilemmas. It is someone with whom we can be completely honest. A reliable mentor can be counted on to be completely straight with us, and help us define our truth and develop action plans to change if we are dissatisfied with our leadership or our lives.
Having a group of close friends who serve as your personal advisors can be also invaluable. They too are not overly impressed by your external success, because they know you well enough, and care enough about you, to confront you when you are not being honest with yourself. A team of professional advisors, be it your board of directors, your colleagues, or others in your line of work, can also be a great source for sharing your problems and seeking honest consultation on how to address them. In your organization it is more than healthy – it is essential – to have one or more “honest critics” who are prepared to challenge your ideas and action, to help you see the other side or the way others will view your actions.
Connecting with my Community
Another means for staying grounded, and developing compassion for others, is through direct community service. Examples include tutoring inner city students, working in a homeless shelter, reading to the blind, befriending people in need, and connecting with the lives and needs of people with limited economic means. Direct contact is infinitely more important and rewarding, but also less comfortable, than chairing the board of the United Way or a social service organization. The reasons for this are obvious: as we progress in our professional lives, it is easy to lose touch with the lives of ordinary people. Instead of becoming more compassionate, over time our hearts become hardened. By engaging with our community, we remain in touch with the real world.
Understanding our role in the world is the most personal and profound area of our leadership development. Many people turn to their spiritual and religious practice to engage these issues, either privately or with like-minded people. Some seek the answers through a process of introspection. Others explore them through discussions with the people closest to them in their lives. Still others choose to ignore these questions altogether until confronted with an overwhelming dilemma, a personal tragedy, or a life-threatening illness.
Finding Balance in our Lives
Finally, we stay grounded by regularly rebalancing our professional lives and our personal lives. There is no doubt that the time commitments of leading major organizations can absorb all our time and emotional energy, leaving little left for ourselves or for those closest to us. This poses an enormous danger: the very act of working ever harder distorts our judgment and our ability to think clearly, and accentuates the risk of losing our way. We have a continual need to recalibrate what our behavior says about what is most important in our lives.
But keeping ourselves grounded through personal disciplines, developing close relationships, and maintaining a reasonable balance between our professional and personal lives can provide the basis for long-term success in whatever venue we choose for leadership. It positions us to discern the authentic purpose of our leadership and to draw satisfaction from its intrinsic rewards.
There is no guaranteed path to become a good leader. It is a process requiring a lifelong commitment to personal development, so that you will be prepared to confront the enormous complexities leaders face and, under tremendous pressure, to fulfill your responsibilities honorably and successfully. The challenges are great, but the satisfaction of knowing you made a positive difference in the lives of others is even greater.