When Managing Isn't Enough (live copy)

A good manager does not a true leader make. Yet a company's ability to nurture leaders can make all the difference between success and failure.

June 20, 2002
Even before Maureen Bundy received the plea for help "relighting" the circuits, everyone's fuse at Verizon Wireless was severely frayed. The company, which is one of Fujitsu Network Communications, Inc.'s biggest customers, is located directly across the street from the World Trade Center. Its nationwide call-switching network had blinked out from a hail of debris that blew in as the twin towers crumbled on September 11. How would they restore service when several floors and millions of dollars' worth of equipment -- the nexus of the operation -- were in ruins?

   The crisis demanded leadership, and Bundy, Fujitsu's senior manager of field technical operations, and her staff of two rose to the occasion. From her headquarters in Raleigh, North Carolina, she leapt into disaster-recovery mode. She scoured the Northeast for 16 technicians who could get to the scene the fastest. She made sure that Fujitsu was one of the first vendors to arrive at Verizon's hastily established "war room" in mid-Manhattan.

   "It was a dramatic illustration of demonstrating leadership in a high-risk and volatile environment," says Joseph Carlisle, director of organizational performance and employee development for Fujitsu, which is headquartered in Richardson, Texas.

   In fact, the qualities that Bundy demonstrated -- a cool head, a keen mind, solid judgment, decisive problem-solving skills, and an ability to see the big picture -- are exactly what American companies need most.

   "When things are going along just fine and significant changes aren't needed, you don't need real strong leadership," says Michael O'Brien, president of Executive Leadership Solutions, a Cincinnati-based consulting firm. "But when things are at risk, and shifting, and you're at a tipping point -- that's when leadership is most necessary."

   In recent years, competition has grown increasingly keener in nearly every industry. Managerial tenures are ever shorter. With cuts in middle management, bench strength is weaker. The economic downturn has narrowed most companies' margin of error.

    Against this backdrop, an organization's capacity for identifying and nurturing genuine leaders can make all the difference between success and failure. But where do these leaders come from? Can they be developed from the management pool? Can they be trained?

   Competent managers, capable of tasks such as directing operations and hiring and firing, aren't necessarily leader material, HR specialists say. Those who've studied creative decision-makers tend to agree that leaders have several qualities in common. They know how to rally people together, to motivate, to execute strategic decisions, to inspire trust. They are the antithesis of the term "manager" and all of its command-and-control connotations.

   As Warren Bennis says in On Becoming a Leader, "The manager administers; the leader innovates. The manager imitates; the leader initiates. The manager accepts the status quo; the leader challenges it." In general, there are only a handful of these gifted people with the vision to take a company to the next level.
One of the biggest errors that companies make is to regard a person's promotions or advancement through the corporate ranks as evidence of leadership skills. The competencies that corporate climbers demonstrate, including strong command of technical and professional skills and an ability to play politics, have little to do with a capacity to lead people and organizations.

   "There's a difference between a leader by title and a leader by profile," says Gregory Nelson, vice president of Development Dimensions International in Bridgeville, Pennsylvania." Leaders by profile are the people who are the biggest influence in the organization -- the people who get things done. Very often, that doesn't follow the organization chart."

   Not surprisingly, the combination of qualities required for true leadership isn't easy to come by, experts say. Still, it's the task of businesses not only to identify the "born leaders" in their ranks, but also to do all in their power to develop them. According to a Development Dimensions survey of 5,000 HR leaders, fully 82 percent of organizations have difficulty finding qualified leaders -- up from 74 percent only two years ago. And 77 percent don't give their organizations' leadership-development programs the highest ratings.

   Cynthia McCauley, vice president of leadership development for the Center for Creative Leadership, an executive-education firm in Greensboro, North Carolina, says developing leadership doesn't have to encompass dramatic moves or 180-degree strategic turnabouts. "Leading means that you're central in making sure that the groups you're responsible for, or part of, have a sense of direction," she says. It means "that people are motivated or committed to that direction and purpose, and that you're able to solve sometimes the adaptive problems that will pop up as you move in that direction -- problems that aren't easy, that don't have a clear solution, that people don't all agree on how to solve."

   In a recent national survey of more than 300 company presidents and CEOs by Caliper, a Princeton, New Jersey, HR consulting firm, top executives reflected on the question of where leadership comes from. They said that they thought they were born with 40 percent, and developed 60 percent of their abilities through experience. "People develop," McCauley says, from "their job assignment, from relationships -- ranging from peer networks to executive coaching -- and from formal training experiences that are more intentional, off the job. So most organizations are trying to weave those three things together."

   Sharon Jordan-Evans, president of her own HR consulting firm in Cambria, California, says about 70 percent of leadership development comes from challenges and changes on the job, about 20 percent from work relationships and learning from mentors and coaches on the job, and only about 10 percent from formal training. "What's ironic is that if you look at most workplaces, they have that formula upside down. They devote 70 percent to training alone. Then they say, 'Why don't we have great leaders? We put them all through a two-day class.' And that's not how it works."

   Here are nine ways that companies can strike the right balance in identifying leaders and developing key people into leaders:

   Know what to look for: The most important job that a company has in securing its future is identifying leaders-in-waiting. Gene Morrissy, a management psychologist at RHR International Company, a consulting firm in Wood Dale, Illinois, says these are some of the qualities to look for in potential leaders: "Do they have conceptual flexibility? What's their intellectual horsepower? What is their interpersonal style, and how do they influence people? Do they have a global mind-set, scanning the horizon laterally instead of just operating in their silos? How do they develop talent in their own organization? How much do they get out of people in terms of high standards and accountability? Do they have a customer mind-set?"

   Companies should look for people who "have a kind of passion to do things," adds Thomas K. Theodore, a leadership consultant in Wynnewood, Pennsylvania. "And they are calculated risk-takers. Not wild and crazy, but they are willing to take risks that others aren't."

   Evaluate "in the round": The only way to be sure of someone's leadership potential is to let everyone in on the assessment, from above, below, and around that person. This is frequently known as a "360-degree" process.

   "We all know that some people are really good at working 'up' but don't do very well side-to-side or 'down,'" says Janet Weatherbe, executive director of global human resources for General Motors Corporation. "The ideal leader is someone who can deal with all people issues in a positive way and also knows how to get bottom-line results." And the best way to figure out if they do so is to ask their colleagues.

   But companies must be careful to prevent abuse of such information, cautions Barbara Stelluto, manager of executive education and leadership for Bayer Corporation. "We make a point of only using it for development purposes, and not for performance appraisals. Otherwise it gets skewed terribly," she says.

   Establish a fertile culture: It's up to current leaders to make sure their company encourages the development of their successors. Broadwing Communications, for example, has just launched what it calls a "leadership-development community," which consists of about 60 people who have committed to a year of instruction. The program includes meeting with small clusters of colleagues in the class to encourage accountability.

   "This is incredibly important to us because Broadwing is like a billion-dollar start-up company," says Mary Kay Crone, director of training and organizational development for the Cincinnati firm. The company is transforming itself from an old-fashioned phone utility, Cincinnati Bell, into an Internet leader in broadband services. "We're all having to adapt quickly to new processes and changes," she says. "And it's so critical that we get in sync and speak the same language so that we can then exercise leadership out of a common understanding."

   Recognize different leadership demands: Leadership needs vary depending on the nature of a business and the kinds of people it employs. Technology professionals, for example, tend to be more likely to identify with their profession than their employer, are more resistant to mandated goals than other employees, and are more afraid of obsolescence, says Scott Mason, senior consultant with BlessingWhite, a Skillman, New Jersey-based training and consulting firm.

   Decide what to nurture: Many people in the field believe that leaders must master and demonstrate what can be boiled down to "three C's": caring, communication, and courage.

   Caring: Frankly, it's difficult for Travelodge Hotels, Inc., to distinguish its economy hotels from the competition's, so its leaders must be able to elicit creative ideas from their subordinates. "They need to establish a culture of caring and give people the feeling that they can express themselves comfortably in an out-of-the-box kind of way," says Robert Foley, president and chief executive officer of Parsippany, New Jersey-based unit of Cendant Corporation. "That's how you create a bond of trust that encourages ideas that float to the top."

   Communication: Foley says that top executives often climb to the pinnacle of their organization without having to learn to listen. "But that is actually crucial for leaders to do in a very fast-paced world where decisions have to be made very quickly," he says. At the same time, says consultant O'Brien, leaders must be able to express their own insights and convictions clearly and forcefully. "You can teach people the intrapersonal and interpersonal skills necessary to communicate, inspire, enroll, and motivate people," he says.

   Courage: Being able to expect leadership to take over at the point of attack, or during a crisis, is crucial, but so is encouraging "everyday" courage. That's one of the bedrock concepts of Broadwing's program. Recently, for example, managers involved in leadership training were asked to come up with an example of an instance in which they thought they had acted in a courageous manner. "So when the CEO says, 'You're going to need to make this decision courageously,' I'm more likely to do it because he's talking with me in a language I already understand," Crone says.

   Expect "alacrity": Perhaps the most powerful attribute a leader can bring to a company is alacrity, which O'Brien defines as "moving stuff to action quickly. It's not just about talking about stuff, but putting it in place. When leaders can do that at companies, the culture begins to shift, enabling the company to begin what may be a long march to organizational cultural change. You don't always need bold strokes, but long marches because people, cultures, and systems change over time."

   Beware of obstacles: When instituting change, all kinds of internal challenges may arise. Often they come from middle managers, some of whom may have grown comfortable with corporate initiatives aimed at incremental process improvements, such as Six Sigma or Total Quality Management. They may feel pulled out of their comfort zone by the kind of take-charge dynamism that good leadership training inspires.
Paradoxically, top management often can put the damper on effective leadership initiatives. Senior executives at Bayer, for example, are "a bit conservative and slow" when it comes to encouraging managers to develop into leaders, the company's Stelluto says, "and we need to get rid of our bureaucracy and get people energized to take leadership roles."

   Similarly, those running Telcordia Technologies, Inc., have been too resistant to efforts at bringing in outsiders to bolster leadership at the company, says Rosalind Doctor, executive director of learning services for the Piscataway, New Jersey, telecommunications-equipment company.

   "They're somewhat parochial in the way that they're thinking," Doctor says. "It's understandable -- rising through the ranks worked for them. But it's out of that group of top executives that you need the support for investing in bringing people in to become leaders and moving them up quickly through the ranks."

   Measure effectiveness: Some in the field insist that it's possible to measure how well development efforts are working because leadership is as much about results as is everything else a company does. Travelodge's Foley, for example, says that it's a simple matter of communicating priorities to the company's leaders and then watching the performance of metrics that reflect progress on those priorities.

   "We've had a big push on quality assurance," he says. "And we can see by customer feedback that we've improved that radically over the last few years. It's been a matter of engaging our franchisees, telling them what we expect, having them go out and do things with it, seeing the results, and then giving them feedback on what their leadership has accomplished in that area."

   Recognize success: That can include promotions, more money, and pats on the back, which continue to be a great motivation for many leaders. For Gerald Cham-ales, understanding this principle has led to a sea change at his company, Rhinotek Computer Products in Carson, California. Previously, Chamales admits, his managerial style was dictatorial. Morale was low; turnover was high.

   But in recent years, he's learned to reward success rather than castigate failure. He gives out bonus checks and plaques to outstanding employees from each department every month, and a top-performing staff member is named to receive an annual award. Chamales says he's learned that "being a leader means playing off people's strengths instead of reprimanding them about their weaknesses."

Workforce, December 2001, pp. 44-48 -- Subscribe Now!