Four lessons in adaptive leadership

The armed services have been in the business of leadership development much longer than the corporate world has. Today's military leaders need tools and techniques to face a fast-changing and unpredictable type of enemy--so the armed services train their officers in ways that build a culture of readiness and commitment. Business leaders need to foster an adaptive culture to survive and succeed, given that they, too, face unprecedented uncertainty--and new types of competitors. Michael Useem and his colleagues at the Wharton School incorporate exposure to military leadership into MBA and executive MBA programs. Highlights include direct contact in the classroom with leaders in the U.S. Army, the U.S. Marine Corps, and the Department of Defense, along with field-training exercises and battlefield visits. The programs are designed to help students connect viscerally to essential leadership lessons. Four are featured in the article: Meet the troops. Creating a personal link is crucial to leading people in challenging times. Make decisions. Making good and timely calls is the crux of leadership. Mission first. Focus on common purpose and eschew personal gain. Convey strategic intent. Make the objectives clear, but give people the freedom to execute on them in their own way.     

The ethical mind. A conversation with psychologist Howard Gardner

Business leadership has become synonymous in the public eye with unethical behavior. Widespread scandals, massive layoffs, and inflated executive pay packages have led many to believe that corporate wrongdoing is the status quo. That's why it's more important than ever that those at the top mend relationships with customers, employees, and other stakeholders. Professor Gardner has spent many years studying the relationship between psychology and ethics at Harvard's Graduate School of Education. In this interview with HBR senior editor Bronwyn Fryer, Gardner talks about what he calls the ethical mind, which helps individuals aspire to do good work that matters to their colleagues, companies, and society in general. In an era when workers are overwhelmed by too much information and feel pressured to win at all costs, Gardner believes, it's easy to lose one's way. What's more, employees look to leaders for cues as to what's appropriate and what's not. So if you're a leader, what's the best way to stand up to ethical pressures and set a good example? First and foremost, says Gardner, you must believe that retaining an ethical compass is essential to the health of your organization. Then you must state your ethical beliefs and stick to them. You should also test yourself rigorously to make sure you're adhering to your values, take time to reflect on your beliefs, find multiple mentors who aren't afraid to speak truth to your power, and confront others' egregious behavior as soon as it arises. In the end, Gardner believes, the world hangs in the balance between right and wrong, good and bad, success and disaster. "You need to decide which side you're on:" he concludes, "and do the right thing."     

Building a leadership brand

How do some firms produce a pipeline of consistently excellent managers? Instead of concentrating merely on strengthening the skills of individuals, these companies focus on building a broad organizational leadership capability. It's what Ulrich and Smallwood--cofounders of the RBL Group, a leadership development consultancy--call a leadership brand. Organizations with leadership brands take an "outside-in" approach to executive development. They begin with a clear statement of what they want to be known for by customers and then link it with a required set of management skills. The Lexus division of Toyota, for instance, translates its tagline--"The pursuit of perfection"--into an expectation that its leaders excel at managing quality processes. The slogan of Bon Secours Health System is "Good help to those in need." It demands that its managers balance business skills with compassion and caring. The outside-in approach helps firms build a reputation for high-quality leaders whom customers trust to deliver on the company's promises. In examining 150 companies with strong leadership capabilities, the authors found that the organizations follow five strategies. First, make sure managers master the basics of leadership--for example, setting strategy and grooming talent. Second, ensure that leaders internalize customers' high expectations. Third, incorporate customer feedback into evaluations of executives. Fourth, invest in programs that help managers hone the right skills, by tapping customers to participate in such programs. Finally, track the success of efforts to build leadership bench strength over the long-term. The result is outstanding management that persists even when individual executives leave. In fact, companies with the strongest leadership brands often become "leader feeders"--firms that regularly graduate leaders who go on to head other companies.     

We don't need another hero

Everybody loves the stories of heroes like Martin Luther King, Jr., Mother Teresa, and Gandhi. But the heroic model of moral leadership usually doesn't work in the corporate world. Modesty and restraint are largely responsible for the achievements of the most effective moral leaders in business. The author, a specialist in business ethics, says the quiet leaders he has studied follow four basic rules in meeting ethical challenges and making decisions. The rules constitute an important resource for executives who want to encourage the development of such leaders among their middle managers. The first rule is "Put things off till tomorrow." The passage of time allows turbulent waters to calm and lets leaders' moral instincts emerge. "Pick your battles" means that quiet leaders don't waste political capital on fights they can't win; they save it for occasions when they really want to fight. "Bend the rules, don't break them" sounds easier than it is--bending the rules in order to resolve a complicated situation requires imagination, discipline, restraint, flexibility, and entrepreneurship. The fourth rule, "Find a compromise," reflects the author's finding that quiet leaders try not to see situations as polarized tests of ethical principles. These individuals work hard to craft compromises that are "good enough"--responsible and workable enough--to satisfy themselves, their companies, and their customers. The vast majority of difficult problems are solved through the consistent striving of people working far from the limelight. Their quiet approach to leadership doesn't inspire, thrill, or provide story lines for uplifting TV shows. But the unglamorous efforts of quiet leaders make a tremendous difference every day in the corporate world.     

Leadership and the psychology of turnarounds

Turnaround champions--those leaders who manage to bring distressed organizations back from the brink of failure--are often acclaimed for their canny financial and strategic decision making. But having studied their work closely, Harvard Business School's Rosabeth Moss Kanter emphasizes another aspect of their achievement. These leaders reverse the cycle of corporate decline through deliberate interventions that increase the level of communication, collaboration, and respect among their managers. Ailing companies descend into what Kanter calls a "death spiral," which typically works this way: After an initial blow to the company's fortunes, people begin pointing fingers and deriding colleagues in other parts of the business. Tensions rise and collaboration declines. Once they are no longer acting in concert, people find themselves less able to effect change. Eventually, many come to believe they are helpless. Passivity sets in. Finally, the ultimate pathology of troubled companies takes hold: denial. Rather than volunteer an opinion that no one else seems to share, people engage in collective pretense to ignore what they individually know. To counter these dynamics, Kanter says, and reverse the company's slide, the CEO needs to apply certain psychological interventions--specifically, replacing secrecy and denial with dialogue, blame and scorn with respect, avoidance and turf protection with collaboration, and passivity and helplessness with initiative. The author offers in-depth accounts of how the CEOs at Gillette, Invensys, and the BBC used these interventions to guide their employees out of corporate free fall and onto a more productive path.     

CORPORATE GOVERNANCE, ETHICS, AND ORGANIZATIONAL ARCHITECTURE

Effective corporate leadership involves more than developing a good strategic plan and setting high ethical standards. It also means coming up with an organizational design that encourages the company's managers and employees to carry out its business plan and maintain its ethical standards.
In this article, the authors use the term organizational architecture to refer to three key elements of a company's design:

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  the assignment of decision-making authority–who gets to make what decisions;

       
  
  

8 ways to build collaborative teams

Executing complex initiatives like acquisitions or an IT overhaul requires a breadth of knowledge that can be provided only by teams that are large, diverse, virtual, and composed of highly educated specialists. The irony is, those same characteristics have an alarming tendency to decrease collaboration on a team. What's a company to do? Gratton, a London Business School professor, and Erickson, president of the Concours Institute, studied 55 large teams and identified those with strong collaboration despite their complexity. Examining the team dynamics and environment at firms ranging from Royal Bank of Scotland to Nokia to Marriott, the authors isolated eight success factors: (1) "Signature" relationship practices that build bonds among the staff, in memorable ways that are particularly suited to a company's business. (2) Role models of collaboration among executives, which help cooperation trickle down to the staff. (3) The establishment of a "gift culture," in which managers support employees by mentoring them daily, instead of a transactional "tit-for-tat culture", (4) Training in relationship skills, such as communication and conflict resolution. (5) A sense of community, which corporate HR can foster by sponsoring group activities. (6) Ambidextrous leadership, or leaders who are both task-oriented and relationship-oriented. (7) Good use of heritage relationships, by populating teams with members who know and trust one another. (8) Role clarity and task ambiguity, achieved by defining individual roles sharply but giving teams latitude on approach. As teams have grown from a standard of 20 members to comprise 100 or more, team practices that once worked well no longer apply. The new complexity of teams requires companies to increase their capacity for collaboration, by making long-term investments that build relationships and trust, and smart near-term decisions about how teams are formed and run.     

Oil and wasser

It was supposed to be an amicable "merger of equals," an example of European togetherness, a synergistic deal that would create the world's second-largest consumer foods company out of two former competitors. But the marriage of entrepreneurial powerhouse Royal Biscuit and the conservative, family-owned Edeling GmbH is beginning to look overly ambitious. Integration planning is way behind schedule. Investors seem wary. But for Royal Biscuit HR head Michael Brighton, the most immediate problem is that he can't get his German counterpart, Dieter Wallach, to collaborate on a workable leadership development plan for the merged company's executives. And stockholders have been promised details of the new organizational structure, including a precise timetable, in less than a month. The CEO of the British company--and of the postmerger Royal Edeling--is furious. It's partly a culture clash, but the problems may run deeper than that. The press is harping on details that counter the official merger-of-equals line. For instance, seven of the ten seats on the new company's management board will be held by Royal Biscuit executives. Will the clash of cultures undermine this cross-border merger? Commenting on the fictional case study are Robert F. Bruner, the executive director of the Batten-Institute at the University of Virginia's Darden Graduate School of Business Administration in Charlottesville; Leda Cosmides and John Tooby, the codirectors of the Center for Evolutionary Psychology at the University of California, Santa Barbara; Michael Pragnell, the CEO and director of the board for the agribusiness firm Syngenta, based in Basel, Switzerland; and David Schweiger, the president of the Columbia, South Carolina--based management consulting firm Schweiger and Associates.     

Leading in times of trauma

An employee is diagnosed with cancer or loses a family member unexpectedly. An earthquake destroys an entire section of a city, leaving hundreds dead, injured, or homeless. At time like these, managerial handbooks fail us. After all, leaders can't eliminate personal suffering, nor can they ask employees who are dealing with these crises to check their emotions at the door. But compassionate leadership can facilitate personal as well as organizational healing. Based on research the authors have conducted at the University of Michigan and the University of British Columbia's CompassionLab, this article describes what leaders can do to foster organizational compassion in times of trauma. They recount real-world examples, including a story of personal tragedy at Newsweek, natural disasters that affected Macy's and Malden Mills, and the events of September 11, 2001. During times of collective pain and confusion, compassionate leaders take some form of public action, however small, that is intended to ease people's pain and inspire others to act. By openly demonstrating their own humanity, executives can unleash a compassionate response throughout the whole company, increasing bonds among employees and attachments to the organization. The authors say compassionate leaders uniformly provide two things: a "context for meaning"--creating an environment in which people can freely express and discuss how they feel--and a "context for action"--creating an environment in which those who experience or witness pain can find ways to alleviate their own and others' suffering. A leader's competence in demonstrating and fostering compassion is vital, the authors conclude, to nourishing the very humanity that can make people--and organizations--great.     

Developing globally responsible leaders: What role for business schools in the future?

This paper reports on a collaborative research process to explore the future role of business schools in the development of globally responsible leaders. Swinburne University of Technology held a collaboratory workshop of academics across disciplines and a range of business leaders to explore firstly what a globally responsible leader would look like and secondly how these capabilities would be developed. In taking forwards actions from the workshop, the Business School was noticeably absent which raised the specific question regarding the on-going role for business schools in the future development of leaders, and how they would need to change in order to maintain a future role in this sphere. The paper reflects on the transformative process necessary within business schools if they are to meet this future agenda.     

Discovering your authentic leadership

The ongoing problems in business leadership over the past five years have underscored the need for a new kind of leader in the twenty-first century: the authentic leader. Author Bill George, a Harvard Business School professor and the former chairman and CEO of Medtronic, and his colleagues, conducted the largest leadership development study ever undertaken. They interviewed 125 business leaders from different racial, religious, national, and socioeconomic backgrounds to understand how leaders become and remain authentic. Their interviews showed that you do not have to be born with any particular characteristics or traits to lead. You also do not have to be at the top of your organization. Anyone can learn to be an authentic leader. The journey begins with leaders understanding their life stories. Authentic leaders frame their stories in ways that allow them to see themselves not as passive observers but as individuals who learn from their experiences. These leaders make time to examine their experiences and to reflect on them, and in doing so they grow as individuals and as leaders. Authentic leaders also work hard at developing self-awareness through persistent and often courageous self-exploration. Denial can be the greatest hurdle that leaders face in becoming self-aware, but authentic leaders ask for, and listen to, honest feedback. They also use formal and informal support networks to help them stay grounded and lead integrated lives. The authors argue that achieving business results over a sustained period of time is the ultimate mark of authentic leadership. It may be possible to drive short-term outcomes without being authentic, but authentic leadership is the only way to create long-term results.     

Developing your leadership pipeline

Why do so many newly minted leaders fail so spectacularly? Part of the problem is that in many companies, succession planning is little more than creating a list of high-potential employees and the slots they might fill. It's a mechanical process that's too narrow and hidebound to uncover and correct skill gaps that can derail promising young executives. And it's completely divorced from organizational efforts to transform managers into leaders. Some companies, however, do succeed in building a steady, reliable pipeline of leadership talent by marrying succession planning with leadership development. Eli Lilly, Dow Chemical, Bank of America, and Sonoco Products have created long-term processes for managing the talent roster throughout their organizations--a process Conger and Fulmer call succession management. Drawing on the experiences of these best-practice organizations, the authors outline five rules for establishing a healthy succession management system: Focus on opportunities for development, identify linchpin positions, make the system transparent, measure progress regularly, and be flexible. In Eli Lilly's "action-learning" program, high-potential employees are given a strategic problem to solve so they can learn something of what it takes to be a general manager. The company--and most other best-practice organizations--also relies on Web-based succession management tools to demystify the succession process, and it makes employees themselves responsible for updating the information in their personnel files. Best-practice organizations also track various metrics that reveal whether the right people are moving into the right jobs at the right time, and they assess the strengths and weaknesses not only of individuals but of the entire group. These companies also expect to be tweaking their systems continually, making them easier to use and more responsive to the needs of the organization.     

Leadership in literature

Business students nowadays are not, for the most part, poets. A growing proportion come to business school with a background in investment banking or management consulting and an undergraduate business major, rather than a degree in the arts and sciences. MBA students are already very familiar with business. A number of scholars and businesspeople have begun to question the scientific model that dominates business research and teaching. Formalized management tools work well enough if you're studying techniques for financial valuation, but less so when you're studying leadership and organizational behavior. Some argue that students could learn a lot more about these subjects if they took a course in literature. Examples from fiction can be as instructive as any business textbook. HBR senior editor Diane Coutu recently met with Joseph Badaracco, Jr., for a wide-ranging discussion of what leaders can learn from literature. For the past decade, Badaracco, the John Shad Professor of Business Ethics at Harvard Business School, has used classical literature to provide well-rounded, complex pictures of leaders in all walks of life-particularly leaders whose psychological and emotional challenges parallel those of senior executives. Fiction provides some of the most powerful and engaging case studies ever written. Unlike contemporary management literature, which is relentlessly upbeat, classical literature is unsparingly realist. Leaders often struggle and sometimes fail-and the stakes are high. When business leaders read about the conflicts of literary characters, they can better understand their own circumstances. We pay far too little attention to the inner lives of leaders. Business school courses seem to suggest that you can treat executives like lab animals and control their behavior through their environment. But behaviorism is not enough. Literature suggests that leaders should learn more about themselves if they want to succeed.     

Is yours a learning organization?

An organization with a strong learning culture faces the unpredictable deftly. However, a concrete method for understanding precisely how an institution learns and for identifying specific steps to help it learn better has remained elusive. A new survey instrument from professors Garvin and Edmondson of Harvard Business School and assistant professor Gino of Carnegie Mellon University allows you to ground your efforts in becoming a learning organization. The tool's conceptual foundation is what the authors call the three building blocks of a learning organization. The first, a supportive learning environment, comprises psychological safety, appreciation of differences, openness to new ideas, and time for reflection. The second, concrete learning processes and practices, includes experimentation, information collection and analysis, and education and training. These two complementary elements are fortified by the final building block: leadership that reinforces learning. The survey instrument enables a granular examination of all these particulars, scores each of them, and provides a framework for detailed, comparative analysis. You can make comparisons within and among your institution's functional areas, between your organization and others, and against benchmarks that the authors have derived from their surveys of hundreds of executives in many industries. After discussing how to use their tool, the authors share the insights they acquired as they developed it. Above all, they emphasize the importance of dialogue and diagnosis as you nurture your company and its processes with the aim of becoming a learning organization. The authors' goal--and the purpose of their tool--is to help you paint an honest picture of your firm's learning culture and of the leaders who set its tone.     

The discipline of building character

What is the difference between an ethical decision and what the author calls a defining moment? An ethical decision typically involves choosing between two options: one we know to be right and another we know to be wrong. A defining moment challenges us in a deeper way by asking us to choose between two or more ideals in which we deeply believe. Such decisions rarely have one "correct" response. Taken cumulatively over many years, they form the basis of an individual's character. Defining moments ask executives to dig below the busy surface of their lives and refocus on their core values and principles. Once uncovered, those values and principles renew their sense of purpose at the workplace and act as a springboard for shrewd, pragmatic, politically astute action. Three types of defining moments are particularly common in today's workplace. The first type is largely an issue of personal identity. It raises the question, Who am I? The second type concerns groups as well as individuals. It raises the question, Who are we? The third kind involves defining a company's role within society. It raises the question, Who is the company? By learning to identify each of those three situations, managers can learn to navigate right-versus-right decisions successfully. The author asks a series of practical questions that will help managers take time out to examine their values and then transform their beliefs into action. By engaging in this process of self-inquiry, managers will be gaining the tools to tackle their most elusive, challenging, and essential business dilemmas.     

Crises,Financial Leadership,and the Six Stretches for Financial Education

The former dean of the University of Virginia's Darden School explores how business schools must adapt to prepare future business leaders to assume the leadership responsibilities necessary to respond effectively to financial crises. The article begins with a statement by Milton Friedman and Anna Schwarz in their Monetary History of the United States about the failure of U.S. policy makers to prevent the collapse of the U.S. banking system during the Great Depression. Then turning to the crisis of 2008, the author draws on recent accounts of the leadership—both effective and ineffective—provided by policymakers to support Friedman and Schwartz's contention that the success of countries in responding to crises “depends on the presence of one or more outstanding individuals willing to assume responsibility and leadership.” After citing Nassim Taleb's characterization of the financial system as inherently “fragile,” the article offers a number of insights about the kind of leadership that is likely to prove effective in protecting such systems. Using the responses of policymakers like Bernanke, Paulson, and Geithner as examples, the author observes that successful leaders rank priorities and set direction, mobilize collective action, choose whether and how to use the “panoply of tools” at their disposal, and attempt to respond in a comprehensive, coordinated way to all aspects of a crisis using a flexible set of approaches and methods that he identifies as “Ad Hoc‐racy.” With such insights in mind, the author goes on to suggest that changes in current research and teaching about leadership are likely to take the form of the following six “stretches”:

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Capital disadvantage: America's failing capital investment system

The U.S. system of allocating investment capital is failing, putting American companies at a serious disadvantage and threatening the long-term growth of the nation's economy. The problem, says Michael Porter, goes beyond the usual formulation of the issue: accusations of "short-termism" by U.S. managers, ineffective corporate governance by directors, or a high cost of capital. The problem involves the external capital allocation system by which capital is provided to companies, as well as the system by which companies allocate capital internally. America's system is marked by fluid capital and a financial focus. Other countries--notably Japan and Germany--have systems with dedicated capital and a focus on corporate position. In global competition, where investment increasingly determines a company's capacity to upgrade and innovate, the U.S. system does not measure up. These conclusions come out of a two-year research project sponsored by the Harvard Business School and the Council on Competitiveness. Porter recommends five far-reaching reforms to make the U.S. system superior to Japan's and Germany's: 1. Improve the present macroeconomic environment. 2. Expand true ownership throughout the system so that directors, managers, employees, and even customers and suppliers hold positions as owners. 3. Align the goals of capital providers, corporations, directors, managers, employees, customers, suppliers, and society. 4. Improve the information used in decision making. 5. Foster more productive modes of interaction and influence among capital providers, corporations, and business units.     

What makes a leader?

Superb leaders have very different ways of directing a team, a division, or a company. Some are subdued and analytical; others are charismatic and go with their gut. And different situations call for different types of leadership. Most mergers need a sensitive negotiator at the helm, whereas many turnarounds require a more forceful kind of authority. Psychologist and noted author Daniel Goleman has found, however, that effective leaders are alike in one crucial way: they all have a high degree of what has come to be known as emotional intelligence. In fact, Goleman's research at nearly 200 large, global companies revealed that emotional intelligence--especially at the highest levels of a company--is the sine qua non for leadership. Without it, a person can have first-class training, an incisive mind, and an endless supply of good ideas, but he still won't make a great leader. The components of emotional intelligence--self-awareness, self-regulation, motivation, empathy, and social skill--can sound unbusinesslike. But exhibiting emotional intelligence at the workplace does not mean simply controlling your anger or getting along with people. Rather, it means understanding your own and other people's emotional makeup well enough to move people in the direction of accomplishing your company's goals. In this article, the author discusses each component of emotional intelligence and shows through examples how to recognize it in potential leaders, how and why it leads to measurable business results, and how it can be learned. It takes time and, most of all, commitment. But the benefits that come from having a well-developed emotional intelligence, both for the individual and the organization, make it worth the effort.     

Stop holding yourself back

After working with hundreds of leaders in a wide variety of organizations and in countries all over the globe, the authors found one very clear pattern: When it comes to meeting their leadership potential, many people unintentionally get in their own way. Five barriers in particular tend to keep promising managers from becoming exceptional leaders: People overemphasize personal goals, protect their public image, turn their competitors into two-dimensional enemies, go it alone instead of soliciting support and advice, and wait for permission to lead. Troy, a customer service manager, endangered his job and his company's reputation by focusing on protecting his position, not helping his team; when a trusted friend advised him to change his behavior, the results were striking. Anita's insistence on sticking to the tough personal she'd created for herself caused her to ignore the more intuitive part of the leadership equation, with disastrous results--until she let go of the need to appear invulnerable and reached out to another manager. Jon, a personal trainer who had virtually no experience with either youth development programs or urban life, opened a highly successful gym for inner-city kids at risk; he refused to be daunted by his lack of expertise and decided to simply "go for it." As these and other examples from the authors' research demonstrate, being a leader means making an active decision to lead. Only then will the workforce--and society--benefit from the enormous amount of talent currently sitting on the bench.