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©Leadership Pathways, 2000. All rights reserved.
The Heart of Leadership
Keith Merron
Leadership Pathways
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“Think on these things”
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The Leadership Crisis?
• Leadership is probably the most talked about subject in business, and one of the most researched.
• Almost every year there is a major story about the crisis of leadership
• We have faced this crisis for hundreds of years. Why?
• Why do we continually blame our political leaders for what ails us?
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Where Do You Look For Leadership?
• In others?
• In the people who hold positions of leadership?
• In your boss?
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What is the Heart of Leadership?
• Leadership is not a position
• Leadership is not an action
• Leadership is not a skill
• Leadership is an attitude--a place from which to act
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Two Leaders
Bob FredBig vision Independent agent
Impeccably honest Manipulates others
Cares about others Needs approval
Accountable Blames others
Sees big picture Acts moment to moment
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What is your stance in life?
• Do you hold yourself as a model for others?
• Are you committed to acting with integrity?
• Do you see yourself as a powerful force for change?
• Do you stretch the boundaries of what is possible?
• Do you care about others (deeply)?
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Major Study
• In a huge organization, climate of departments was measured
• Climate varied significantly from department to department
• Over 50% of the variation was a direct result of the leader’s style of leadership
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Think Back
• Go back in time 50 years
• What were some of the major challenges facing the university?
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Mile High Look at the History of Business
• Up until 1950s, organizations were seen as mechanistic– Taylorism
– This worked in predictable
• 1920s study of Hawthorne began sea change– Regardless of physical changes in environment, productivity
went up
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Mile High cont’d
•1950s to 1970s, organizations seen as social- Spawned human relations movement- Main emphasis was on managing people-Introduced key concepts like MBO and participative leadership- Principle flaw: happiness leads to productivity
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Mile High cont’d
•1970s-90s saw a major sea change
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Come to the Present
• What are the key challenges the university system faces today?
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Time Taken From Invention to Widespread Use
Steam engine 150-200 Automobile 40-50Vacuum tube 25-30Television about 20Transistor about 15Personal computer about 7
Invention Years
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PERCENT
1700 1760 1790 1820 1850 1880 1910 1940 1970 2000 YEAR
50- 40-
30-
20-
10- 0-
Savery(1698)
Watt (1770, 1796)
Newcommon (1712)
Cornish (1830, 1846)
Triple expansion (1890)
Parsons turbine (1910)
High pressure Steam turbine (1950, 1955)
Gas turbine?Fuel cell?
MHD?
Combustion Efficiency
Source: Thirring, H., Energy for Men. Indiana University Press, Harper & Row, Torchbooks, 1958
60-
70-
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PERCENT
1750 1800 1850 1900 1950 2000
YEAR
10-5
10-6 Mach I
Trains
Pony Express
AutosExternal combustion engine
Chemical rocket?
Speed of Travel
10-1
10-2
10-4
10-3
10-7
Reciprocating engineMissiles
Gas turbines
Nuclear rocket
Interplanetary spacecraft
Interstellar spacecraft
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MEOMORY
YEAR
256 K-
Technology Rate of Change/ Computer Memory Growth
4 M-
84 K-16 K- 1 K-
1 M-
1970 1980 1990 2000
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In 1970, the United States dominated more than 80% of the world market for automobiles. By 1992, this number was less than 40%. Today it is even less.
-Donovan, 1993
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In 1970, the steel industry in the United States produced 70% of the steel in the world. Today, it produces less than 12%.
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The World Has Changed
• Access to information
• Uncertainty
• Globalization
• Enormous demand for knowledge workers
• Change happening at an ever escalating speed
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Conclusion
• The old rules no longer apply
• Logic and prediction are no longer key to success
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The Problem in Front of You
• How to attract and retain great people in face of huge opportunities
• How to manage and rise above the pressing challenges facing you
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Let’s make two assumptions:
1. “A leader is someone you choose to follow to a place you wouldn’t go by yourself.”
Joel Barker
2. The purpose of a good leader is to create conditions where people achieve high quality results that meet the needs of the organization (and sustain such efforts over time).
Keith Merron
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The Solution is You
• Promote a sense of identify
• Articulate a compelling vision
• Create an energizing culture
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Organizational ChangeWhy is it important for an organization
to change quickly?
EVE
N
T
Negative consequences
Positive consequences
ANTICIPATE RESPOND
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Leadership Point One
Leaders encourage change
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Focus of attention
Present Future
BREADTH ofRESPONSIBILITY
HIGH
LO
Followers
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Focus of attention
Present Future
BREADTH ofRESPONSIBILITY
HIGH
LO
Followers
Leaders
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Leadership Point Two
Leaders encourage change Leaders create the future
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Kotters & Hesketts’ Research
• 207 firms from 22 industries
• Measured cultural strength
• Economic performance between 1977-1988
• Interviewed 75 industry analysts
• In-depth analysis of firms that were:– Culturally strong and less effective
– Culturally strong and more effective
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CULTURE STRENGTH AND MARKET VALUE GROWTH
-5 5 15 25 35Annual Market Value Growth (percent), 1977-1988
Weak
1
2
3
4
Culture
Strength
5
Strong
Adapted from Kotter & Hesketh Corporate Culture and Performance
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Key Findings
• Most effective company’s have:– Strong cultures– Adaptable cultures– Appropriate cultures
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Collins and Porras: Built to Last
• Visionary Company Criteria– Premier in industry– Widely admired– Made an indelible imprint on the world in which
we live– Generations of CEO’s– Multiple product (or service) life cycles– Founded before 1950
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The Companies in Collins & Porras’ Research Study
• VISIONARY COMPANY
– 3M
– American Express
– Boeing
– Citicorp
– Ford
– General Electric
– Hewlett-Packard
– IBM
– Johnson & Johnson
– Marriott
– Merck
– Motorola
– Nordstrom
– Philip Morris
– Procter & Gamble
– Sony
– Wal-Mart
– Walt Disney
• COMPARISON COMPANY
– Norton
– Wells Fargo
– McDonnell Douglas
– Chase Manhattan
– GM
– Westinghouse
– Texas Instruments
– Burroughs
– Bristol-Myers Squibb
– Howard Johnson
– Pfizer
– Zenith
– Melville
– RJR Nabisco
– Colgate
– Kenwood
– Ames
– Columbia
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Chart 1.BRatio of Cumulative Stock Returns to General Market 1926-1990
16.00
15.00
14.00
13.00
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
193
6 194
6 195
6 196
6 197
6 198
6192
6 199
0
VISIONARY
COMPANIES
COMPARISON
COMPANIES
General Market
Built to Last ; Successful Habits of Visionary Companies James C. Collins, Jerry I. Porras 1994, Harper Collins
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Collins & Porras’ Findings
• Leaders are organizational builders• Establish a core ideology (e.g., The HP Way)• Preserve their core ideology while encouraging
innovation and progress• Set challenging goals for people to accomplish• Build cultures that are strong, integrated, focused and
consistent• Keep trying to do things better; keep experimenting
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The Power of Culture
• Culture’s influence appears to be “more powerful than anything else,” including:– Strategy
– Structure
– Leadership
– Financial analysis
– Management systems
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Don’t Ignore the Culture
• 1993 study by McKinsey of 100 companies: 5 of 6 failed reengineering efforts due to cultural problems
• Deloitte-Touche study of 400 companies: similar findings
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Leadership Point Three
Leaders encourage change Leaders create the future Leaders create culture
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Let’s Make an Assumption
The Purpose of any Business Organization:
To add value by creating products and services that meet or exceed present, emerging, and future needs of customers
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Implications
• Efficiency is not the primary cause of success in business organizations
Instead, success is determined by:
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Implications
• Speed to market
• Customer responsiveness
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This Requires that Organizations are:
• Focused
• Aligned
• Anticipative and responsive
• Brilliant in their execution of strategy
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VisionLeadership Team
1
Managing Change
From the Inside Out
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Managing Change
Vision
Leadership Team
1
4 O
rganizational
Competencies
3
Cultur
e Typ
e
From the Inside Out
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Managing Change: From the Inside-Out
Structu
re
5
Communication
System
6
Critical Success Factors7
Measures8
3
Cultur
e Typ
e
4Organizational
Competencies
13Benefits System
12Training and
Development 11
Compensation System
10 Performance Management
System
9Selection & Assessment
VisionLeadership Team
1
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Leadership Point Four
Leaders encourage change Leaders create the future Leaders create culture Leaders focus on the system
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Key Research on Organizations
The cost of turnover of one professional in an organization is roughly $100,000
There is more turnover in organizations today than ever before
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Key Research on Organizations
In most organizations, the most critical asset is the human capital of the organization.
The organization that is able to retain its key knowledge workers has a significant competitive advantage in today’s marketplace
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Key Research on Leaders
The most critical ingredient to successful leadership is the ability to build trust.*
Trust requires the ability to beauthentic.
*sources:Korn/Ferry study, Bennis, Kouzes and Posner
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Leadership Point Five
Leaders encourage change Leaders create the future Leaders create culture Leaders focus on the system Leaders build trust
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Conscious Leadership
• Great leadership is a conscious act
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Conscious Leadership
• Visionary (charisma)• articulates compelling vision• demonstrates strong conviction• takes risks• sets clear direction• demonstrates enthusiasm
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Conscious Leadership
• Your supervisor has left on a two-year journey• There will be no replacement• Person at the highest level you interact with says he/she needs you to handle it• It is all up to you
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Conscious Leadership
• What do you stand for?• What do you intend to create?
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Barriers to Visionary Leadership
• Feeling small• Dependency• Allowing fear to overcome you• Playing it safe• Self-criticism
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Conscious Leadership
• Accountable (large)• makes conscious choices• sees self as causal agent• demonstrates a “can-do” attitude
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Conscious Leadership
CIRCME
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Conscious Leadership
CIRCME
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Conscious Leadership
• Systemic thinker (big picture)• aims for win-win solutions• takes the long term view• sees how things connect with one another
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© Leadership Pathways, 2000. All rights reserved.
Conscious Leadership
• Authentic (inspires trust)• communicates authentically• reliable--does what one says• tells the truth
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© Leadership Pathways, 2000. All rights reserved.
Conscious Leadership
• Connecting (cares deeply)• listens with intent to understand• responds flexibly to needs of others• includes others in decisions• encouraging