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WHARTON
LEADERSHIP DIGEST
January,
2004, Volume 8, Number
4
CONTENTS
By Dennis C. Carey and Marie-Caroline
von
Weichs
 Three
years ago we began gathering CEOs together twice a year for a day-long
seminar called the CEO Academy. The groups are small -- fewer than 30
chief executives who had been in their job less than three years -- and
the seminar leaders are comprised of some of the most seasoned CEOs and a
few proven professionals who have spent years working with CEOs every day.
The idea is to create a kind of executive education "boot camp"
-- a concentrated session, closed to the press, in which CEOs with plenty
of experience under their belt could share their thoughts with those who
were still learning-on-the-job.
Why would a CEO, whose is
often rigidly scheduled six days a weeks, devote a day away from work to
compare notes with other CEOs? Because,
it turns out, most CEOs arrive to take on this towering professional
challenge without adequate preparation.
Even those who have been carefully groomed for succession quickly
discover they have not yet experienced the special job circumstances that
face the CEO. Senior
executives may have been responsible for a business unit or a large
division. But they have
always been part of the chain of command, not at top. Excellent
managers are not necessarily excellent CEOs.
Once they ascend to the top post, most of the training is
on-the-job. Repeatedly, the
new CEO -- who may have worked in an industry for decades -- will
encounter problems and expectations never before confronted.
CEOs with long tenure frequently remark that they wish they had
known about a particular process or management skill ten years earlier
when they first took the job.
On top of the general
problem of harnessing the energies of a company comes the simple fact that
a CEO may be very unfamiliar with some core responsibilities.
Most new CEOs have never chaired a board meeting.
Some may never even have attended one. Most have never had to forge
a working relationship with a board-selected "lead director."
Outside the boardroom, issues such as advertising, human resources, the
press, Wall Street analysts, mergers, and board member recruitment, which
consumer large amounts of a CEO's time and attention, are activities that
most senior executives below the top job may have dealt with on only a
very limited basis.
The fact that
a chief executive arrives at a job having to take on some
responsibilities for the very first time suggests that, despite all the
press attention they have received, the role and work of a CEO remains
poorly understood. Indeed,
one of the paradoxes of business press coverage of corporations is that
while the personalities and wealth of CEOs was exhaustively documented in
recent years, there has been scant attention to what a CEO actually does.
True, much has been written on the
"leadership qualities" or "management style" of
corporate executives. But
this literature is very different from a description of the day-to-day
demands facing modern CEOs: how they develop strategy, how they motivate
employees, how they work with board members, how they deal with the
investor community.
These
"practical" features of a CEO's professional responsibilities
are critical because the job has become, in recent years, more demanding,
closely scrutinized, highly criticized, and increasingly precarious.
What was once seen as a comfortable sinecure at the tail end of a
successful career has become a job fraught with uncertainty and
insecurity. According to a
study by the executive search firm Spencer Stuart, a decade ago, the
average tenure for a CEO was eight years.
Today it is less than five. Some
don't make it even that far. One
study found that boards now expect the CEO to raise the company's stock
price in the first 19 months or be asked to step down.
Just one in 20 CEOs hired this year will hold the job for the next
20.
Not only is tenure far
from guaranteed, the demands of the job have escalated. Gone are the days
when the chief executive officer role was a form of genteel stewardship:
quarterly board meetings, international travel, and golf.
Much of what a CEO must do is often unglamorous, time consuming,
and professionally difficult. While
chief executives are often portrayed in the business press as the captain
of a ship, the better analogy may be with a state governor or mayor.
Although the CEO can do much to launch new initiative, success
depends entirely on how the various constituencies of a large organization
behave. Despite many
hyperbolic press accounts about the "power" of
the modern CEO, in
practice top corporate leaders face severe limitations on what they can
accomplish by themselves. After
all, customers, stockholders, and employees don't always cooperate.
How these constituencies are managed is a leading preoccupation of
the successful CEO.
That is why we have come
to believe that CEOs need to learn what they can from others who have
acquired, largely by trial-and-error, insights into how to run a company.
We believe there is an immense and largely untapped body of knowledge on
these subjects. It resides
among the fraternity of experienced, seasoned, and retired CEOs who have
been working in the trenches for many years.
They may well be the best "executive education" resource
for current and future CEOs.
Note:
Dennis C. Carey and Marie-Caroline von Weichs are co-authors of How to Run A Company, recently published by Crown Business.
Dennis Carey founded G100, which sponsors the CEO Academy, and is
vice chairman of Spencer Stuart U.S.
Marie-Caroline von Weichs is CEO of G100 and a former a recruiter
of senior management for Spencer Stuart.
Transformational
Leadership and Creativity:
Evidence from Korean Companies
Transformational
leadership can be defined as elevating the goals of one's followers and
inspiring them to perform beyond their own expectations.
Academic researchers Shung Jae Shin and Jing Zhou theorized that
transformational leaders would boost company creativity by motivating
their followers to challenge the status quo and search for better ways of
doing business. But they also forecast that the followers' personal values
would affect the degree of boost: those
employees who have high respect for authority and the exercise of
leadership are more likely to be inspired that employees with more cynical
attitudes.
To test their ideas, the
investigators gathered information on 290 employees and supervisors
working in research and development in 6 established and 40 young Korean
companies in several technology-related markets (e.g., electronics and
telecommunications). The
employees rated their supervisors' transformational leadership capacities
such as the extent to which they were intellectually inspiring and
personally caring. The
supervisors evaluated their employees' creativity, including the extent to
which they came up with ways to improve performance and devise
new solutions to old problems.
As anticipated, employees
with a transformational boss were rated as significantly more creative in
their R&D work than were other employees, and the difference was
greatest among those employees who held greatest respect for authority and
the exercise of leadership. Transformational
leadership works – especially when subordinates are ready to by led.
Source:
Shung Jae Shin and Jing Zhou, "Transformational Leadership,
Conservation, and Creativity: Evidence from Korea," Academy of
Management Journal, vol. 46, 2003, pp. 703-714.
Stretch
Objectives:
How to Breakthrough
By
Jim Pawlak, Editor, Biz Books
 Breakthrough
– How Great Companies Set Outrageous Objectives and Achieve Them,
by Bill Davidson ( John Wiley & Sons, 2003).
Bill
Davidson's 10-year study of companies that redefined themselves, and in
many cases their markets, identified conjoined common denominators.
They are: 1. strategic philosophy and principles and 2. leadership
philosophy and practices.
Integrate
them and you have a basis for breakthroughs in any or all of the four
basic dimensions of business growth: profit, operating performance,
company profile/culture and market position. His integration process is:
Aim, Ready, Fire.
While
many breakthroughs occur in the early, chaos phases of a new
product/market, the marriage of the two can create breakthroughs anytime
during a product or company life cycle.
An example: While Jeep
was the first SUV, Ford's Explorer became the market leader.
Davidson's
studies show that breakthroughs are an organization-wide process.
With
an everyday-everyone-involved corporate culture, strategy is focused on
giant-step strategic innovation (i.e. breakthroughs), not baby-step
innovation. That focus
readies a firm for "What's next?" when one breakthrough is made.
Giant-step strategy also heightens collaboration and builds
cohesive teams. It also
requires a commitment to take risks. In the world of breakthrough organizations there are no
functional silos or turf wars. There
is only one commitment: collective ambition driving toward a clear common
vision.
In
Davidson's AIM phase, leadership must sort through the possibilities,
weigh the rewards and risks and make decisions. Company leadership
develops and articulates vision. The
development of the vision is based upon input from employees and other
stakeholders. Communicating
the vision includes expectations (i.e. the bull's eye) and a basic
how-and-why map.
In
his READY phase, managers align the organization's resources, assign
responsibilities and build two-way feedback channels. It's no small task because the firm will be going into
uncharted territory.
In
the FIRE phase, a specific agenda is tackled.
Leadership reinforces progress and coaches through difficult
situations.
Note:
For information on direct distribution of Jim Pawlak's Biz Books reviews, he can be reached at bizbooks@hotmail.com.
LEADERSHIP
COMMUNICATION: Let Your People
Know
 By
John Baldoni
The
cold hard reality of management is that it is less about you and more
about your people. It is about unleashing the talents and skills of your
people in order to enable them to do the work.
Management is really about supporting others, providing them with
the resources to do the job. That's the focus and productivity part.
Inspiration comes from leadership -- having employees who want to
be at work and want to work for you.
Management
and leadership are two distinct disciplines but necessary ones for anyone
in a supervisory position, whether you are a CEO, CIO or manager of
systems analysis for the controller's office.
And
the link between management and leadership is communication. If you want
your people to believe in you and if you want them to do something, you
need to communicate. For more than 20 years, I have worked with men
and women to help them become better communicators. Over that time, I have
worked at a concept that I call "leadership communications."
That phrase refers to the way in which leaders use their communications to
do two things: build trust and drive results.
Seldom
will anyone disagree with the concept. It is common sense, after all. It
is what leaders of every generation have been doing to give purpose to
their people's lives. The hard part comes in figuring out how to use
communications. My belief is the communication may be the very fulcrum of
the leadership lever.
If
you want to be the boss that people want to work for, you must
communicate. Communication facilitates the leadership process. That means
when you set the vision, you articulate it. When you plan, you tell people
about it. When you delegate, you have a dialogue with your people about
who does what. When you coach, you have a conversation about what's going
right and what needs improvement. When you recognize, you do so with words
(and actions). And when you motivate, you do all of the above in order to
create the right conditions for people to feel connected, empowered and
able to contribute. In short, all of leadership comes back in one form or
another to communication up, down and across every level of the
organization.
But
that is not all there is to it. Three elements propel your leadership
communications: speaking, listening and learning. You voice the message;
you listen to what people have to say; you learn from what they say or
don't say. That is the essence of the leadership communication cycle and
at any given moment in any given day you will find yourself whirring
within this cycle. For example, you will be speaking to your CIO. Later
you will be listening to your employee. And maybe at night you will be
learning from what you said and heard. The cycle is perpetual.
Note:
John Baldoni is a leadership communications consultant who
works with large companies and non-profits including the University of
Michigan. His most recent book is Great Communication Secrets of Great Leaders (McGraw-Hill).
Readers can find his website here.
This is an excerpt from an article that appears in Darwin
Online.
New
Governance Journal:
Corporate Ownership & Control
 Corporate
Ownership & Control is a new quarterly international journal
established by a group in Ukraine. Edited
by Alex Kostyuk, its mission is to "to
improve existing and develop new corporate governance practices, and to
facilitate the dissemination of research results by enabling renowned and
young researchers and practitioners to present their findings and share
their experience."
Note:
Alex Kostyuk can be reached at
alex_kostyuk@mail.ru and Department of
Management, Ukrainian Academy of Banking of National Bank of Ukraine,
Petropavlovskaya Str. 57, Sumy, 40030, Ukraine.
Strengthening
Non-Profit Organizations:
Leadership Matters
 Bridgestar
is a Boston-based community of non-profit leaders devoted to strengthening
their organizations and the nonprofit sector.
The first issue of its newsletter, Leadership Matters, is
focused on "Bridging the Nonprofit & For-Profit Sectors,"
and it can be found here;
information on Bridgstar is available here.
Leadership
Conference:
Uncertainty and Change
The
first annual Wharton Leadership Conference in San Francisco will be held
on March 23, 2004. It is
focused on "Leading in an Era of Uncertainty and Change,"
and its speakers include Boeing chairman Lewis Platt, Charles Schwab CEO
David Pottruck, and former Enron vice president Sherron Watkins. Information on the conference and online registration are
available here.
Copyright 1996-2004, Wharton Center for Leadership and Change Management
University of Pennsylvania.
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