Maybe we make leadership too complex a concept. Leaders are, at their core, ordinary people who have to do extraordinary things.
Whether for a business, government or social organization, great leaders evolve from ordinary people who stretch beyond their comfort zone. They take calculated risks, and when even their most prudent risks generate some failures, they internalize the lessons.
People who strengthen or grow their own organizations take the time to understand clients and suppliers. They get out of their office and off of their golf carts to visit on-site.
They hire people who have track records for quantifiable results and then support and grow them further.
When it comes time for a pizza for employees, they not only buy the pizza, but they sit with employees to enjoy the meal and the conversation.
And in the end, they make the extraordinary seem ordinary.
Assessing leadership
There are countless ways to assess the leadership qualities we seek for business, politics or sports. A great place to start an assessment is to A.S.K.: attitude, skill and knowledge.
• Attitude. We are regularly reminded of our expectation for ethical behavior when we see the unethical. We know how a single lapse in ethics undercuts long-term credibility and trust. A productive attitude embraces and transcends what’s ethical, legal and moral. It includes common decency and constructive opinions. It values relationships with the organization, co-workers and even competitors.
Attitudes of respect, commitment and kindness leave little room for arrogance. They help guard against being blindsided, and minimize a potential loss of position or influence. Without proper regard for peers, bosses and adversaries, a leader will find few allies. Thus standing alone, his demise is only a matter of time.
Change in the world is continuous, and it’s accelerating. Without a hunger to understand what’s new, an organization cannot anticipate or respond to globalization, new technologies or evolving competition.
• Skills. Technical, financial, communications and other real skills form a critical foundation for leadership. Yet true leaders do not emerge until we add proficiency for engaging the right assets – capital and people. Deploying these assets requires additional strategic skills, the foresight to see where the organization needs to move and the agility to make essential adjustments en route.
The skills to convey information and enthusiasm, and to generate a broad-based sense for the ownership of results, are honed by the input of others. Listen to what others say, to what they don’t say and, most critically, understand what they mean. A leader is focused on results and holds himself accountable. One who blames others for shortfalls, or claims all credit for success will eventually perish.
Easy access to, and rapid transmission of, abundant information will eventually expose the under-skilled.
• Knowledge. A leader’s technical grounding should be a given – e.g. marketing, operations, finance, human resources. Acquiring knowledge in excess of what a single discipline requires helps to build a broad and valuable perspective. In this process a real leader comes to appreciate the expertise and worth of others.
Leaders know a change in an organization’s leadership won’t immediately transform it. The organization may have tested some of what their new leader thinks is innovative before he arrived.
A job title alone does not make a leader. Titles are awarded, but leadership is cultivated and earned over time.
People who have nurtured positive attitudes, developed valued skills and built a solid knowledge base are all potential leaders, regardless of title. There are respected informal leaders, among whom may be bright executive assistants, knowledgeable factory workers, seasoned salespeople or older employees to whom their colleagues, and even their bosses, may turn for guidance.
Successful leaders appreciate that everyone, regardless of position, works for someone. One may be working for a boss or shareholders, colleagues or customers. But in a broader sense, a leader is also working for society, the betterment of the profession or industry, and ultimately, for the privilege to leave a positive footprint and advance his own values.
Pay for nonperformance
When we consider the measure of leadership’s worth, the current structure for corporate compensation is a very curious matter.
We hire leaders to shepherd critical activities and specific initiatives. To compensate them for meeting these expectations, we provide them with a competitive, predetermined base salary with the commitment to a greater reward – a bonus – for exceptional results. But somehow all work becomes focused on receiving a bonus. Wasn’t the base salary itself structured to achieve improved results or change? In overlaying a bonus, are we paying twice for the same expected results?
Our businesses can be wounded by boards that do not take the time to pragmatically understand compensation, or by CEOs and executive chairs who themselves benefit from a faulty pay structure.
To justify what they believe are essential pay levels to attract and keep talent, businesses look to marketplace compensation as a key reference point? Unfortunately that marketplace is an epidemic roll-up of these same horrible pay practices.
In the proper stewardship of their assets and future, are businesses making prudent decisions by constructing pay packages for potential new executive hires based on the executive’s current pay, current job title and relationships, rather than a proven, relevant track record? In fact, in a growing circle of executives, compensation is a measure of ego, not performance.
There are three great compensation questions to ask ourselves, our boards, our CEOs and our consultants:
• Have you ever assessed your compensation structure and determined that people are overpaid?
• When you hire a new executive and pay a competitive base compensation, for what do you expect this base compensation is paying?
• If you paid a key executive a $1 million bonus today, and he died on the way home, would the business open and run profitably tomorrow? Is he irreplaceable?
If we are paying leaders the same for performance and nonperformance, for growing a business or tanking a business, how does it all end?
Knowledgeable, skillful leaders with the right attitudes do grow, adapt and flourish. Mediocre or lesser leaders can endure for a time. Some deftly move to a next company and a next big payday before their business implodes (allowing the roof to fall on their replacements).
Still others delay their own judgment day by artfully laying faults on the economy, materials costs, government regulation, unfair competition and even their own hand-picked lieutenants, positioning themselves to escape the consequences of failure and find another new beginning.
But many of the less competent leaders don’t escape failure. Some cannot mask their shortcomings or time their escapes. Others blindly allow their strengths to mutate into flaws.
For example, broad and expanding skill and knowledge, when coupled with overconfidence and success, can decompose and breed arrogance. Further, the drive for ever-greater compensation can mutate to runaway greed, trampling an organization’s objectives and values.
Not all fatal wounds are self inflicted. Leaders who believe that they have no deficiencies will not cultivate the respect of their team or peers. If they attempt to build a protective wall with a cadre of “yes men,” they may find that wall can be breached. Decent team members or other stakeholders whose confidence, values and organizational commitment are not eroded will stay, fight for the enterprise and expose a charlatan.
Leadership is a complex thing. But let’s not make it too complex. We must do a better job of assessing our leaders. We need to appropriately compensate them based on their performance. And we cannot ignore serious shortcomings. •
Edward M. Mazze is the distinguished university professor of business administration at the University of Rhode Island. Stanley H. Davis is a principal with TowerHunter Executive Search and leads the firm’s East Coast practice. He can be reached at sdavis@towerhunter.com.
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