An abbreviated version of this article appeared in 
Executive Excellence Magazine, February, 2002

Leading Up

Michael Useem

Upward leadership is about taking charge when managers are not formally in charge.  Rather than undermining authority or seizing power from superiors, upward leadership means stepping in when senior managers need help and support in ways that benefits everyone.

Upward leadership is not about seizing power, undermining your boss, ingratiating yourself, or otherwise augmenting your stature at the expense of others.  It is about serving the organization and the people it serves – whether customers, owners, or constituents.

Leading up is a matter of offering a boss your strategic insights or persuading a superior to alter directions before it is too late. It requires an ability to work in two directions at once, of stepping into the breach when nobody above you is doing so – and of listening to those below you when they have much to offer you.

Downward leadership and upward leadership reinforce one another.  If  you are effective at the former, it will encourage the latter; if you are adept at the latter, it can inspire the former.

Upward Leadership When It Was Really Needed

When terrorists rammed airliners into the Pentagon and World Trade Center on the morning of September 11, Meg Whitman, the chief executive of eBay, was in Japan and her chief operating officer, Brian Swette, was in Florida.  When they needed all the help they could get, they got it. 

The management team at eBay acted that morning on its own.  It quickly moved to confirm that all 2,500 employees were safe, secured the company website, and launched an online auction to raise $100 million for the disaster’s victims. “By the time I was able to call in” from Japan, said Meg Whitman, “our team was already thinking about and acting on the big issues.”

Cisco Systems’ chief executive John Chambers was also out of town when this disaster struck, and he too received the upward leadership that every CEO should have.  When he called his headquarters upon hearing of the calamity, he learned that his subordinates had already swung into action. 

Chambers asked for the creation of a crisis communications center, and he was told that a manager “already got that going.”  He urged that all employees and their families be located, and he was informed that another manager was “already leading that effort.”  He insisted that Cisco customers facing the biggest challenges be contacted immediately, and he was told, “John, we’ve already got the operational center going.”  Chambers later complimented his employees for stepping up to lead the company when he could not do so himself:  “What you did across every segment of the company was truly amazing.” 

Upward Leadership is a Learned Capacity

The capacity of the people below you to exercise leadership on your behalf, and your own capacity to lead above, is an acquired ability.  It requires both mentoring from above and self-starting from below.

Consider David Pottruck, chief operating officer of broker Charles Schwab, who faced a critical moment in 1997.  Would he be able to convince his chief executive and the company’s directors to support his urgent proposal to move the brokerage company fully into internet trading?  

Through its thousands of customer service representatives, the company bought and sold shares for a million clients, but the rise of the internet threatened to undo all that, undermining a web of trust painstakingly built between the service representatives and Schwab customers over many years.  The web furnished free and fast access to company information that had long been the brokers’ province, and it opened a way to trade stock at a fraction of the time and cost required to do it through a broker.

Pottruck had privately concluded that the company would have to create a full-service brokerage offering with internet trading at a price of $29 per trade, far below the current price of $80 for full-service trading. 

Pottruck prepared to make the case to his boss, CEO Charles Schwab.  Pottruck knew that the firm’s founder appreciated market trends, and as Pottruck explained his reasoning, Charles Schwab immediately affirmed his interest in the move. Charles Schwab was willing to take large risks and place big bets when the odds were known, and he pressed Pottruck to nail them down.

Pottruck instructed his staff to assess the effect of providing full service to everybody at $29 a trade. The strategists responded with a shocking conclusion:  It would depress the company's revenue in 1998 by $125 million and its earnings by $100, more than a fifth of its projected pre-tax profits. 

Although he was sure of the long-term merits of the new plan, Pottruck was less sure if returns from it would grow quickly enough to avert financial disaster.  He knew that the plan would require vigorous support from the chief executive and board members if it were to succeed.

David Pottruck gave Charles Schwab the financial forecast of the low-price full service plan, and warned of its effect on profits in the short term.  The founder always insisted on putting customer service first and Pottruck had made that principle his guiding premise; Schwab had consistently stressed careful analysis, which Pottruck had done; Schwab had delegated much to those he trusted and Pottruck had already earned his confidence. Following weeks of discussion, Schwab endorsed the plan. 

Pottruck then carried the case to the company directors, whose wholehearted support would be essential as well.  A prior boss and mentor at the company, Larry Stupski, had earlier provided invaluable coaching for what Pottruck was about to do.  Stupski had urged Pottruck to become personally familiar with the directors, to listen carefully to what they said, and to avoid any appearance of “selling” ideas to them.  With Stupski’s mentoring, Pottruck came to appreciate that the board wanted a balanced, calm, and wise executive.  He learned they wanted an upward leader.

When he now brought his new plan to the board, some directors wondered why any change was needed since the year was already proving to be the best in company history.  After-tax profits were nearly $270, and what Pottruck was proposing could reduce them by a third or more.  Others questioned if the alternative had been thoroughly studied.  Still others asked Pottruck if he were convinced that short-term downsides could indeed be weathered.  Pottruck responded confidently that “it will be fine but it will take some time,” possibly a year and a half or more.

By the end of the board meeting, the directors agreed to back what would be the company’s most fateful decision of the era.  On January 15 1998, Schwab announced it was offering web trading for $29 with full customer service, including personal consultation and advice.

The first quarter’s results – as Pottruck had forecast – were devastating.  Quarterly revenues had been growing at 6.5 per cent per quarter in 1997; now they declined by 3 per cent. Pre-tax income had been rising by 8 per cent per quarter in 1997; now it dropped by 16 per cent.

Yet by the end of 1998, the number of Schwab customers with online accounts nearly doubled, and Schwab finished the year with 20 per cent growth in revenue and 29 per cent rise in profit.

Meeting the internet challenge at Schwab required strategic insight and a reasoned capacity to risk much when others doubted the proposed path.  But it also depended on a boss ready to be persuaded and a board ready to be moved, and that readiness was not a given.  Rather, it was a direct product of steps that Pottruck had earlier taken himself to establish a relationship of confidence with those above him. He had conscientiously worked to build his superiors trust in him by openly communicating with them, providing them with careful analysis and forecasts, and then delivering on what he said he would achieve. 

What It Takes to Lead Up

A common element among those who successfully lead up is a driving urge to make things happen on high, an unflinching willingness to take action when not fully in command.

The exercise of upward leadership has been made easier by contemporary expectations in many companies that managers learn not just from their superiors but from all points of the compass. The phrase “360-degree feedback” has come to mean a manager's annual task of gathering reaction from direct subordinates and immediate bosses. So it is with leading up: instead of just motivating those below, managers must also muster those above; instead of just learning from those above, managers need listen to those below.

Such leadership can be inspired when executives are willing to take the time to create the right culture. Once established, a company-wide emphasis on leading upwards serves as a kind of inertial guidance system, continually reminding everybody that they are obliged to stand up without the need for superiors to ask for them to do so.

Two steps can help build that right mind-set.  First, if you expect those below to support your leadership and step into the breach when needed, they will need to understand your strategy, methods and rules. That requires repeated restatements of your principles and consistent adherence to them.  Second, if you want subordinates to offer their best advice, you must value and make use of it, and listed as well to what your subordinates are implying or communicating through other means.  Because their personal stake in you and the company is large, they may appreciate your situation better than you do yourself.

Some managers believe that their position will be undermined if they do not appear to have all the answers.  But of course just the opposite is true:  If they would give up their semblance of unquestionable authoritativeness, in the eyes of their subordinates they would acquire all the authority they need.

To come forward when a superior does not encourage it can be risky, and upward leadership is not always welcomed.  Many managers have worked for a supervisor who alienated customers or misjudged the future – and who still resisted any suggestions from below for change.  But if upward leadership can work – whether welcomed or not – it can help transform decline into growth and, occasionally, even turn disaster into triumph.  

Michael Useem is professor of management and director of the Center for Leadership and Change at the Wharton School, University of Pennsylvania.  This article is drawn from his recently published book, Leading Up: How to Lead Your Boss to You Both Win (Crown Business/Random House, 2001), and he is the author several earlier books, including The Leadership Moment: Nine True Stories of Triumph and Disaster and Their Lessons for Us All (Random House, 1998).