|| Update your
of the status quo never had it so bad. There has always been a conflict between
those who feel their values are eternal and those who feel they are relative."
- R Kostelanetz
is in a constant state of flux."
- Heracleitus, the Greek philosopher.
ight gigantic American companies dominated
the steel industry in 1960. Their total market value: $55-billion. Today,
it's down to $13-billion, and falling.
Where did the value go?
sought greener pastures in other companies and other sectors of industry
that found better ways of responding to customer needs and priorities. It
migrated, for example, to Nucor, a min-mill that uses low-cost technology
and cheap raw materials and can, therefore, offer steel at much lower prices.
The value also moved to aluminium and plastics producers
who offered manufacturing customers better suited to their drinks cans or
car parts. It also migrated to Japanese Mills, where superior manufacturing
process designs allowed for the production of quality steel at lower prices.
How could new and often
small competitor steadily plunder the customer base so painstakingly built
up by the big steel producers?
By better business design that focuses on customer priorities.
| When the design remedies don't match your business problem, you
modify the business problem, not the design.
Thomas Carlyle, the Scottish historian and social philosopher, put it: "Nothing is more terrible than activity without
How you design your business reflects your choice
of products to manufacture or services
to provide, how you deliver them to
customers in a way that gives them what they want and still allows your company to profit.
It was Samuel Gompers, an
American labour leader in the early 1900s, who said: "The worst crime against working people is a company which fails to operate at a profit.
In the business
world, higher revenues, profits and market share, leading to higher
market value, migrate to companies with the best business designs. To
ensure that these values migrate your way:
your business to respond efficiently to customer priorities;
a wary eye on competitors who, by better design, attempt to entice
your customers away, and
value migration trends that indicate their next destination in
your sector of industry.
is an inevitable cycle. And it's coming soon to your industry, so...
To help you
sharpen your defenses and initiate appropriate action:
to customer priorities, and
RESPOND TO CUSTOMER
In the past,
technology gave you the competitive advantage. If you invented a successful
product, customers sought you our. DEC, for example, invented the VAX
computer. The company's market value grew by billions of dollars. One
product, Tagamet, tuned SmithKline into a multi-billion dollar pharmaceutical
giant. And Xerox introduced the photocopier and watched its market value
soar by $11-billion.
In the industrialised
First World, innovations followed one another in rapid succession. They
changed the way we thought of our companies, our markets, our competitors.
And they changed the way we thought of ourselves.
journalist Mark Roman, general editor of Success in 1987 wrote: "Every
time a manager rolls out of bed and gulps down his morning coffee, he'd
better be prepared to face a world that is dramatically different from
the one he fell asleep in."
Brains in the boardroom
Until the Technological
Revolution and its successor, the Information Revolution, doing business
was a process that remained relatively constant. The brains in the boardroom
strived to devise strategies and systems that fitted the world in which they
operated. Many, trained in the "old school"
of business management, can't or won't adapt to their methods to deal with
the new, infinitely more complex business environment."
Managing in this environment,"
says international business consultant and author Richard Foster, "requires a new orientation."
Rather than tightening
central control, he suggests that companies fragment themselves into self-sustaining
divisions, each responsible for innovating within its own niche. This usually means predicting trends and catering for
them with technical innovations.
One company that does that with outstanding success is the mighty Sony
Corporation in Japan.
in Sony watched the fast growing trend in fitness. A growing army of
international health fanatics jogged or cycled along roads and by-ways
in their hundreds of thousands. They needed a device that would take
their minds of the pain of the slog.
than a go-anywhere, miniature audiotape player? The thought led to the
birth of the now legendary Walkman.
"Nobody liked the idea,"
he recalled. "But I had a hunch that the portable
stereo player would be successful and popular despite scepticism within my
Morita was so certain of
his hunch that he offered to resign his chairmanship if Sony failed to sell
100 000 Walkman units during the first year of production..
He didn't have to. By 1987,
Sony had sold more than 20-million Walkmans in more than 70 different models.
Morita and Sony co-founder
Masaru Ibuka often discussed the concept of developing their company as an
innovator that would design and manufacture high-tech products.
"Merely building radios,"
he said, "was not our idea of the way to fulfil
these ideals." Sony set out to make its products better, smaller and more
efficient by adapting and using the latest advances in technology, especially
But, in many sectors of
industry, the rate of breakthrough technological innovation is slowing. And
even breakthrough innovation doesn't give you much of an advantage
anymore because of rapid imitation from competitors. For example, Sony no
longer has an exclusive hold on the market for in-the-pocket, go-anywhere
Invent and develop a radically
new product and you'll have all your competitors offering something similar
in no time at all. And it may be even cheaper.
Also bear in mind that
innovation isn't easy. Before you can innovate, you must understand what
type of business you're in. Superficial knowledge isn't good enough.
Your comprehension must be total. This knowledge must include:
intelligence about your competitors' activities;
- the ability
of your company's research and development department;
- your company's
manufacturing capability, and
- what the consumer
wants and needs.
Robert Taylor, founder
of Minnetonka Inc, which launched the wildly successful On Tap Beer Shampoo
and marketed Calvin Klein's Obsession, offered these suggestions:
- keep your antennae
tuned into consumer needs;
- listen to consumer
- conduct constant,
informal research into new product concepts, and
the driving forces behind consumer purchasing decisions.
An old maxim, still echoed
by some people in business, says there's always room in the consumer-dominated
marketplace for improved versions of existing products.
Like the mousetrap.
Indeed, an inventor designed
and built a better mousetrap. Field tests, so to speak, proved that
it's performance was far superior to the conventional mousetrap. Moreover,
it was infinitely reusable and could be retailed at only twice the price
of the use-it-once and throw-it-away variety. After you caught your second
rodent, catching further mice didn't cost a cent.
But no-one bought it. Sales
The inventor had overlooked
an important detail. He found that no-one wanted to remove a squashed mouse
from the trap. People would rather through the whole contraption and the
corpses of its victims away.
"Build a better mousetrap
and the world will beat a path to your door," proclaims the hoary adage.
Forget it. It's probably
one of the most useless pieces of old wives' wisdom. To get ahead and stay
ahead, you've got to thing revolution not evolution.
In a product development
and customer service, aim to make things 100% different. Ten or 20% better
just isn't good enough.
If you improve what ever
you offer in small, incremental steps, the world won't race to get to
your doorstep. It'll yawn. To overcome the consumers' ho-hum mindset, jolt
them into action by revolutionising what you do. Make the changes radical.
Completely redefine your
Look at Nando's. It didn't
try to upstage Kentucky Fried Chicken by offering fried chickens under another
brand name. Nando's developed its own unique recipes to produce chickens
that are unquestionably different.
When you offer a truly
unique product, it will automatically differentiate itself from the competition
to find its own niche in the market.
Deliberately alter the
consumer's perception of your product without, in fact, changing the product
Some years ago Swatch Watch
successfully did just that. When it decided to enter the market for low-cost
timepieces it faced formidable opposition from Timex, which had all but completely
sewn up the low end of the market. So Swatch designed watches with trendy
new-wave faces and straps. Instead of inexpensive and reliable Timex-style
timekeepers, they became affordable fashion statements.
| Competitive Advantage If your product is well-designed, works
perfectly, is popular with consumers and outsells all its
competitors, immediately discontinue manufacturing it.
success doesn't depend on inventing a better mousetrap - even one
that promises radically improved performance. The route to success is
creating, developing and constantly honing better methods of responding
to customer priorities. It's up to you to find out what they need;
what they're willing to pay for. Think along the lines of distribution
systems that save customers time or production processes that lead
to products of undoubtedly better quality.
The key to competitive advantage? It's creating
offerings that match your customers' priorities.
Overcome institutional memory
If you find that you're
losing value to your competitors, don't lay the blame on the current economic
climate or anything else. Blame yourself. Chances are that you're responsible.
Thomas Watson, who founded
the computer giant IBM, reputedly often spoke to his regimented, suited executive
troops in simple, homely terms;
"We must never feel
satisfied," he told them. "There is no such thing as standing still."
And when he was in a rah-rah
mood, he rallied his managerial lieutenants with such rousing proclamations
as: "Hire the best people. Give them top notch training. Treat them well.
And expect loyalty."
Business historians claim
that IBM was built on the best of American middle-class values during the
1950s and 1960s. Young men with executive potential were recruited from selected
universities. They were hard-working and clean living. But independent thought,
according to some critics, was discouraged.
"The ideal IBMer," said
a former executive, "was ambitious, impressionable
and easily moulded. And the company was insular. When you were in IMB,
that's where life began and ended. You were expected to keep within the
confines of your allotted department and strictly toe the rigid company
IBM's rigidity led it into
deep water. Set in its ways and unable to quickly react to marketplace changes,
it saw its formerly dominant grasp on the market slipping. For example, it
could have protected its position by selling computers through the mail as
Dell did. And the big steel producers, whose dominance of the market at one
stage looked unbreakable, could have safeguarded their markets by starting
a separate mini-mill network as Nucor did.
But they failed to take
Because industry leaders
tend to suffer from "institutional memory".
This affliction prevents
them from thinking outside the bounds of their past experiences and successes.
The ability to buy computers by mail-order and scrap metal mini-mills had
never existed before. Therefore industry leaders believed that they were
They overcame institutional memory
However, some large companies
found ways to defeat institutional memory. For strong, forward-looking leaders
like Jack Welch, of General Electric, and Andy Grove, of Intel, the phrase "we've always done it this way" is meaningless.
James Bryant Conant, the
celebrated American scientist, said:"Behold the
turtle. He only makes progress when he sticks his neck out."
Intel's Grove stuck his neck out - all the way. He wasn't afraid to
abandon memory chips, the product on which he'd built his company, in
favour of processor chips to create one of the most powerful companies in
the computer industry. The phrase "Intel
inside" has come to be synonymous with leading edge personal computer
Other big-name companies
also developed structures or processes that continuously combat institutional
memory. 3M constantly searches for interesting products that will carry it
into the future. And Shell's scenario planning always looks ahead -
far ahead. In South Africa, the Anglo-Dutch petroleum
giant, ever cognisant of customer needs, pioneered the off-highway Ultra
City "fill up and refresh" complexes.
Following their lead, you can wage your own war
against the retarding effect of institutional memory by:
- visiting customer
conventions, not their own, to acquire new slants on what the industry
is thinking and new perspectives on what customers are thinking, and
- changing their
diet of conventional information by seeking out small, remote
competitors in addition to keeping a wary eye on the main opposition.
| If you want to create new business
designs that will help ensure your success in the future, break
with the past. It takes courage, but you can do it. You'll have
to if you want to stay in the race.
| The Past The past is valuable if used as
a guidepost, but dangerous if used as a hitching post.
It's easy to tell you that
you must create a new design for your business. But creating it is a different
story. To give you a kick-start, here are four practical suggestions that
- Bring your
customers directly into the design process. While the design of
your business will always benefit from close customer contact,
your customers will be of greatest value when you're in the throes
of developing a new business design.
- Save time and
resources by borrowing models and precedents from other industries.
Even familiar or seemingly unremarkable business design elements
can generate tremendous value when you combine them in an original
way to suit your needs.
- Acquire the
relevant core competencies. When you develop fundamental assumptions
for a new business design, you may discover that customers no
longer value your core competencies. Don't be afraid to go beyond
what exists to find competencies for the future.
- Protect the
design of your business from falling into the traditional organisation
trap. A radical new business design can be overwhelmed in the
existing structure of your business. That's why Honda, Toyota and
Nissan sell their luxury cars through separate dealer networks.
To get your
business on track to a successful future ...
Redesign it from top
the quick, follow my four suggestions for a fast business makeover.
a free market.
corporate hierarchy with more indirect methods of leadership. This leads
to greater freedom, better allocation of resources and a strong force
for focusing on the common good. Giving your employees more scope to
lead creates an organisation that is ready to meet any challenges that
tomorrow will throw at it.
totally restructuring your company's management structure until it is
no longer structured. The old-fashioned, authoritarian manager has become
a dinosaur. Even Peter Drucker says that he's no longer comfortable
with the word "manager" because it implies subordinates.
to learn to manage in situations where you don't have command authority,
where you are neither controlled nor controlling", he points out.
He add that
management textbooks still discuss the managing of subordinates.
"But, " he
observes, "you no longer evaluate an executive in terms of how many
people report to him or her. That standard doesn't mean as much as the
complexity of the job, the information it uses and generates, and the
different kinds of relationships needed to do the work."
In the traditionally
structured company, each employee operates in a cubicle. Peter Day,
the presenter of the BBC Radio 4's programme, In Business, refereeing
to comic strip character Dilbert, a nerdish middle management admin
worker, says: "The cubicle marks the boundary of his power and influence
within this huge and nameless company."
himself as "the king of my cubicle". His loyal subjects are "Mr. Computer,
Mr Stapler and the Binder family".
middle manager, Dilbert is a reminder of why companies need to re-engineer.
Too many people are boxed up in little cubicles in which they perform
their given functions for year after year without any idea of how they
or their functions slot into the overall scheme of things. Indeed ,
their only function appears to be how to go about frustrating attempts
to improve customer service by intercepting and delaying messages destined
for the decision-makers.
ago, the late Professor C Northcote Parkinson published his now famous
law: "Work expands to fill the time available for its completion" One
of the many equally famous corollaries states: "In any administrative
organisation, the administrative staff will increase each year by a
known percentage, irrespective of the work - if any - to be done."
was the Peter Principle, first made public by a Canadian doctor, Lawrence
Peter: "Managers are promoted to just above their level of competence."
Adams, the cartoonist creator of Dilbert and former cubicle inhabitant, "has put forward a new principle: "People get promoted to management
because they're incompetent at doing the job they're originally supposed
manager-turned-cartoonist notes that traditionally structured corporate
bureaucracies single out the most incompetent employees for promotion
to management without even passing through the 'temporary competent
He says that
this actually makes sense. In a perverse way.
"In the old
days, the manager had to be the smartest one because the manager had
to know how to be manager, plus understand all the jobs of the people
your smartest person to be the computer programmer, the person doing
the heart surgery, the person piloting the jet. And you want your least
intelligent person to be the person asking for status reports and doing
team-building exercises and doing the hiring and firing.
you know, these are fairly moronic jobs. So it kind of makes sense."
is that in the real world the guys in these "fairly moronic jobs" can
stifle progress and kill customer delight stone dead. Today's management
gurus reckon that they're the layers of lard that clog corporate arteries.
Current thinking urges business to siphon off this fat to make the distance
between the point of customer contact and to corporate brass as direct
and short as possible. The decisions made by this in-between layer should
be made by those at the coal face ...those who deal directly with the
have coined a word for bleeding off the blubber. Downsizing. It's a
synonym for job-chopping. The objective: to create a lean, flat, cost-efficient
So, if you're
going to survive in the new economic climate in which you will face
cut-throat competition from highly efficient global competitors, you're
going to have to trash the red tape and deadwood.
to Laurance Kuper, managing director of Competitive Strategy, corporate
inertia is likely to stunt any attempts to face the harsh reality of
He says that
local business people have the choice of either drastically revitalising
their companies and repositioning them to achieve greater efficiency
or "shoring up comfort zones to no-profit positions right at the tail
end of global competitiveness".
African companies, he observes, have chosen the latter course.
have to follow the herd. You can make it happen for your company and
customers by demolishing those tacky little boxes ... those suffocating
little cubicles, and giving your organisation a flat, streamlined look.
But you don't
have a lot of time.
units of the foreign business invasion troops are already on our soil.
Re-engineer your company for greater efficiency and total customer delight
this year. Next year could be too late.
DEVELOP A FREE MARKET
Begin by unleashing the
spirit of enterprise in your organisation. As recent changes in South
Africa's political mainstream thinking show, the free market seems an
indispensable institution for improving productivity and prosperity.
As Adam Smith wrote, the free market's "invisible
hand" guides entrepreneurs, while pursuing their own selfish ends, into serving
the needs of their customers and, thus, the common good.
By introducing a free market
principle in your organisation, you can directly motivate and inspire your
followers to find the most efficient, effective ways to serve the group.
There's a name for this
sort of organisation: intraprise -- short for
intracorporate enterprise. And the way it functions is easy to understand.
You don't force employees to the monopolistic staff services. Let them
choose among service providers -- and them
become the providers if they want to. That's what the US Forest Service
did with great results.
The Forest Service controls 127 national forests divided into two regions.
The foresters employed by the service had access to only one of the
centres, depending on the region in which they operated. Since each
centre was a monopoly in its region, service standards were far from
acceptable. The foresters -- the service centres' internal customers --
often complained about the poor quality of the service they received
from the centres, which adopted a take-it-or-leave-it attitude.
Forest Service executives initially considered
two options. They could define and lay down acceptable standards of
service for the technical centres or they could attempt to improve matters
by bringing in new management teams.
did neither. They did something better.
the foresters -- their internal customers -- choose which technical
centre they wanted to call in irrespective of which thhhhhey operated
in. This transformed the centres into cost-effective, customer-focused
this mean for your company? Simply stated, your business becomes
a collection of entrepreneurs who sell their services to your core business.
Like virtual organisations, your business will have a small hierarchy
responsible to top leaders for accomplishing missions.
With one important difference.
Free internal market
Virtual organisations buy
components and services that create value for customers from outside
suppliers. In a free intraprise system, buyers can choose from groups
outside the company or suppliers who are part of the free internal market.
There's no doubt that intrapreneurship encourages innovation. Basically
it's a concept that fosters entrepreneurial behaviour within an organisation.
But John Naisbitt, who penned Megratrends and Reinventing the Corporation, warns that while boardroom barons pay lip service the idea, many get
cold feet when it comes to committing themselves to intrapreneurship. The path to success, they point
out, is littered with "innovative failures".
Naisbitt cites Levi Strauss
as one example. Although generally known as a company with a progressive
management philosophy, it was forced to scrap its Fashion Portfolio
offshoot, which targeted the more fickle and high end of the fashion
market. The post-mortem revealed Fashion Portfolio's focus contradicted
Levi Strauss' overall marketing strategy.
in the United States agree that intrapreneurship leads to innovation.
In fact, a study of 500 top company executives by Arhur Young and Company
found that most respondents believed that innovation should be a corporate
priority. However 50% of them said that the high innovation mortality
rate precluded the implementation of any form of intrapreneurship in
the corporations for which they worked. More than 66% of the respondents
also said that their companies lacked coherent plans for the implementation
on the corporate landscape hasn't changed much, particularly in South
A study by Arthur Young
and Company some years back of more than 500 executives in the United
States found that while 75% of the respondents believed innovation was
a corporate priority, 50% said their companies cited innovative failure
as a cause to shun intrapreneurship. More than 66% of the respondents
added that their companies lacked coherent plans for the implementation
of innovations. The situation on the corporate landscape hasn't changed
much, particularly in South Africa.
For innovation to happen through intrapreneurship, the people at
the corporate pinnacle must empower those down the line to take independent
action internally. This requires dedication, patience and vision. You'll probably
have to stick with employee-mooted projects for at least five years before,
if ever, they turn to a profit. That's takes the kind of guts that doesn't
often bloom in conventional, pyramid structures.
But the results can be worthwhile. At Ford, it led to the development of
the popular Mustang and at IBM, the personal computer.
At Northwestern Bell, which encourages independent thinking, active intrapreneurs
must perform their normal jobs until their brainchildren take off. Venture
capital is provided by the company, but they don't part with the cash easily.
Intrapreneurs have to thoroughly research their pet projects and draw in-depth
venture plans, projects sales growth and, if necessary, call in technical
experts to support their proposals before Northwestern Bell will agree to
underwrite the financial side.
How do you recognize a potentially successful intrapreneur on your payroll?
He or she will be a person who revels in taking measured risks. They're prepared
to start small and gradually unfold their ideas. This means that you can
keep the initial funding lean to minimize your losses if the project flops.
Its a good idea to form a separate company for any new intrapreneurial venture.
Its less intimidating for those working on the internally generated, innovative
project. And if it fizzles out, your core company saves face.
LEAD ON PRINCIPLES
Leaders of the future will be the people who create cultures or value systems
based on principles. Or so says Stephen R Covey, author of The Seven Habits
of Highly Effective People.
Creating such cultures will be tremendously exciting for the people who create
them. But only if they have the vision, courage and humility to learn and
Winterhur Insurances managing direct and CEO peter Spalti lists what he considers
to be the six most important leadership qualities. As a leader worth following,
you must have the ability to:
- Define goals. Leaders
don't only set goals. They show their followers how
to achieve them. This requires the imagination to interpret visions and implement
them at a practical level. For success, you need the ability to recognize
and the will to search for and implement effective solutions.
- Motivate colleagues. This requires the ability to recognize the personal
and professional needs of your colleagues as well as limits of their capabilities.
Don't do anything that may curb the innate desire of most people to do their
best. Encourage it by taking a personal interest in each individual who falls
within your area of jurisdiction.
Motivation, according to Spalti, doesn't mean only offering that incentives
related to performance or dishing out pats on the back. Nothing should detract
from the resolute implementation of ideas and the demanding of results.
- Manage competently. Design plans according to
the tasks that have to be accomplished.
This means setting priorities and organizing the smooth flow of functions
necessary to archive predetermination objectives. It also means finding the
right people for the right jobs and delegating sufficient authority to make
each task a personal challenge to employees.
- Communicate effectively. To be a leader, you must have the ability to communicate
essential information so that it is easily understood. And since effective
communication is a two-way process, you'll also have to cultivate the ability
to listen ---- really listen with empathy to anyone who can offer valid and
pertinent information, from the office cleaner to suppliers to customers.
- Exemplify a value system. As a leader, you are a role model/ this means that
you have to build an aura of credibility and trust around you. If you want
to inspire confidence in your employees ability, you have to exude a positive
attitude yourself. Its your job to lead the way by example by transmitting
clear signals of your declared values.
- Welcome change. The economic environment as well as the society in which
it operates are undergoing rapid and drastic change. As a leader you must
consciously strive to adapt to these never-ending changes and even anticipate
them. Its your duty to question traditional values and methods and seek innovative
approaches to new problems.
Spälti also cites
integrity as vital leadership quality. An effective leader
values dependability and honesty both in himself and others. He says integrity
is a prerequisite for your acceptance and respect as a leader. It allows
you to criticize your employees without jeopardizing their sense of justice,
understanding and goodwill.
Those with a passion of learning --- through listening, seeing, emerging
trends, evaluating successes and mistakes and absorbing the lessons that
conscience and principles teach --- will have enduring influence. These leaders
wont resist change. They'll embrace it.
Four character traits
John Garner, former Secretary of the United States Department of Health,
Education and Welfare, has pinpointed our characters traits, which he believes
differentiate leaders from traditional managers.
True leaders, he says:
- Think long-term and see beyond today's crises and the monthly or quarterly
- Have an interest in the company that goes far beyond tasks on which they
are currently engaged --- they want to know how all the company's departments
dovetail and constantly reach beyond their specific sphere of influence;
- Heavily emphasize the benefits of vision, values and motivation, and
- Don't accept the status quo.
If you want to become a new leader, Jan Carlzon suggests that you learn to
listen, communicate and educate. He describes the new leader as an emotionally
expressive and inspiring person who can create the right atmosphere rather
than make all the decision himself".
Don't preach - do
When Peter Drucker was
a high school pupil in the mid-1920s, his history teacher told the class
to read a number of books on military campaigns during World War I. When
called on to discuss the books in class, one pupil said: "Every one of these books says that the Great War
was a war of total military incompetence. Why?"
The teacher, who had been
wounded in the war, shot back without hesitation: "Because not enough generals were killed. They stayed way behind
the lines and let others do the fighting and dying."
| You'll never get to lead the band if you can't face the music.
|| If you're an effective leader, you don't preach from
behind. You lead from the front. Sure, you may delegate many tasks. But you
never delegate what you can do with excellence - the one thing that makes
all the difference ... the thing that sets standards ... the one thing you
want to be remembered for. That thing you do.
To quote from The Bible: "If the blind lead the blind, both shall fall
into the ditch. (Matthew 15:14)
Cultivate leadership behaviour
If you want to be an effective leader:
- Don't ask: "What do I want?" Ask: "What needs to be done?"
- Then ask: "What can and should I do to make a difference?"
ask yourself: "What are my company's missions
and goals? What constitutes performance and results?"
- Learn to tolerate
diversity in people. Don't search for clones of yourself. Ask yourself: "Do I like or dislike this person?"
- Be intolerant
when it comes to a person's performance, standards and values.
- Don't be afraid of
strength in your associates. Glory in it.
- Submit yourself
to the so-called mirror test. Make sure the person whose reflection
you see in the mirror in the morning is the kind of person who
you want to be, who you respect and believe in. The type of person
who does things because they're right rather than because they're
popular ... the type of person who doesn't do things that are
mean, petty or sleazy.
British Premier John Major
cites two qualifications which he believes are vital to good leadership.
he says, "good leaders have the courage of their
principles and clear, long-term objectives and goals. Second, good leaders
never forget the people who work for them.
"The difference between
passive obedience and active loyalty can make the difference between success
and failure. From manager to messenger they're all individuals with
their own hopes, their own self-esteem and their own interests. A good leader
remembers that and behaves accordingly."
Spälti uses the word "leadership" to define the abilities an individual
possesses so that he or she can convince other members of a team to act in
concert to achieve set goals.
"Leaders," he says, "distinguish themselves from managers in that they
do not understand 'leading' in terms of simply
supervising the execution of a task of the 'managing'
of an affair by means of a set of doubtlessly useful management techniques. "To
leaders, 'management' means guiding people,
motivating them and spurring them on to new achievements."
Consultant and speaker
Gifford Pinchot believes that more leaders, rather than managers, will be
needed as the percentage of knowledge workers in organisations increase.
He lists as important things that need to be done: innovating, seeing things
in new ways and responding to customers by changing the way things are done.
Businesses of stumble and
even collapse because timid leaders send signals that discourage risk-taking.
IBM founder Thomas Watson had the right approach to risk. While discussing
IBM's competitive challenges, he once said: "We
don't have enough people out their making mistakes."
Bishop W C Magee put it
this way: "The man who does not make mistakes does
not usually make anything."
While many bosses will
harshly discipline employees who make mistakes or, perhaps, even axe them,
there's one chief executive who actually rewards people who err. He's
Steve Ettridge, the chief executive officer of a Temps & Company, a temporary
employment agency in Washington. A bookkeeper apparently transposed an
employee's Social Security number with his hourly wage. The employee could
believe his eyes when he received a $5,5-million pay cheque.
Most heads of companies
would have at least docked the bookkeeper's pay.
In fact, he gave her a
$250 bonus. Indeed, he reportedly gives everyone who makes a major foul-up
a cash bonanza.
"Mistakes," he maintains, "are only failures if you can't learn from them.
And you can't learn from the if you don't talk about them."
Now Ettridge and the bookkeeper
double check the payroll before making out cheques. He says his philosophy
of rewarding errors stems from the early days of Temps, when he could only
afford to hire people who had just left college.
"They worked hard,"
he recalls, "but they made a lot of mistakes."
He says he usually discovered
their errors too late to correct them. So he urged his employees to admit
their mistakes so that the could be timeously corrected. To encourage them
to own up, he called a staff meeting and put $250 on the table. He told them
it was up for grabs by anyone who owned up to a major faux pas.
It's worth noting that
turnover at temps rocketed from around $100 000 a year to more than $25-million
in the six years since he introduced reward-for-mistakes concept.
Although famed Olympic
decathlon athlete enjoys winning -- who doesn't? -- he claims that what thrills him most is the way
he reacts when he's beaten. "To my mind,"
he says, "the great champions are the ones
who react to defeat in a positive way.
"I'd much rather climb
into the head of someone who's lost, and see what made that person come
back to be a victor, than to climb into the head of a winner.
"You can probably learn
more from failures. That somebody wins all the time does not necessarily
mean they are successful."