The Dirty Little Secret About Top Leadership

The dirty little secret about the top leadership in many organizations is that neither they nor anyone else in the organization understands or can clearly define their value proposition.

 

While the media gives extraordinary attention to their every hiccup and stockholders live and die by the CEO's health and well-being, few can say how they are supposed to work their magic (leaving aside Peter Drucker, of course).

 

The recent appearance of Steve Jobs onstage to present the updates to Apple's music business was greeted with a collective investor sigh of relief that resulted in a large breeze here in San Diego, 458 miles away.

 

When I'm in a mischievous mood, I will sometimes ask managers and workers in a company, "What does the CEO actually do?" It's not unusual to get a panicked stare as my answer, followed by some trite response, like "Well, he sets the direction of the company."

 

So, I ask, "what is the direction of the company?" We are inundated with direction and vision statements that would all serve as good examples of what my high school civics teacher called 'glittering generalities.' They are well-meaning, but often sound just like every other company's vision statement. For these statements to become more than lovely aspirations something is missing.

So what's missing?

 

What's missing is clarity about the identity of the organization, its character. If we know who we are and what we are becoming, the people of the organization can make intelligent choices about the investment of their time and energy. So many vision statements read like imperial dreams: to become the best...the biggest...the leading.... They can be overly involved in promises of performance. They're too pie-in-the-sky to have much effect on the majority of workers. They're not personal enough. That's what an expression of our identity can provide.

 

For individuals, the sense of identity is the mental and emotional skeleton on which hangs all our behavior and personality and values. Our sense of identity is the strong center that tells us when we are doing something that doesn't fit who we are (or believe ourselves to be). No matter what values we proclaim, our behavior is spurred and limited by how we see ourselves. Identity gives substance to what we believe and to what we aspire.

It is the job of the senior leadership of the organization to model and give voice to the organization's identity. As they do, people throughout the organization understand what actions are worthy and what are not (ethics). Workers at all levels can believe in the vision, because they identify with the organization and they adopt that identify as their own (execution). Identity stays the same no matter what's happening in the market.

And, as we know, people live up to (or down to) who they think they are. It's the job of the senior team to walk and talk the identity of the organization. Culture and values are expressions of identity.

 

Does your organization have a clear sense of who you are as an organization? If it does, the executive leadership is on the ball.

Doug Riddle

Comments

[Stuart A. Moir]

Doug,

This has to be the BEST and most succinct explanation of "walking the talk" and the true "heart" of what drives and defines mission and vision statements.

As a CCL participant and 25 year HR professional, I say "Thank YOU" !!!

Stuart A. Moir
Crystal Lake, Illinois
Leadership Development Program for Human Resource Professionals (2001)

[Ron Schlegelmilch]

Doug,
I agree with Stuart's comment - it is a succinct explanation of "walking the talk". So, my question is, "If top leadership is not walking the talk to develop the organization's identity, what are they doing?" Too much time being spent in adding shareholder value and developing/managing external relationships?

Perhaps more time needs to be spent with the workers!

Ron Schlegelmilch
Edmonton, AB

[Doug Riddle]

Ron, your rhetorical question was stimulating, "what are they doing? Too much time spent in adding shareholder value and developing/managing external relationships?"

My own conviction is that long term shareholder return is inextricably linked to the "name" or reputation of the company, not in the frantic push for quarterly earnings that has distracted so many companies from creating lasting value. There will always be those who chase advantage in momentary market fluctuations, but the health of the whole economy and society is really in the hands of those who build for the future. My father told me, "take care of your good name. It's really all you've got." I think that attention paid to the fundamentals of the organization's identity builds trust in the marketplace that translates into long-term growth.

The same can be said of external relationships with strategic partners, customers, and suppliers. The foundation of good business is trust and it relies on something that can be depended on across all kinds of market and leadership changes. Strategy must change; products and services live out their lifespans and are replaced; executives go the way of all flesh, but human organizations have the capability to outlive all these things and make contributions that span centuries.

[keith Southey]

Doug,
I suspect that many organizations, ours included, would substitute the term 'culture' for identity. That's what tells us if we fit and how we do things around here.
Someone wiser than I said that a CEO only has two levers to pull. One is the budget and the other is his/her calendar. What they spend their time on and what they're prepared to commit money to tells everyone what is important. I suspect that if we want to see the 'identity' of an organization we only need to consider these two factors.
In organizations with the "our people are our biggest asset" slogans, if it is the CFO who gets more time than the CHRO the sound of the walk is louder than the talk.

[Wally Bock]

Great post. I would agree that sustainable long term competitive advantage is linked to the name or reputation of the company, what Warren Buffett calls "the moat." I think the CEO has to drive that by working in two different arenas. To the outside world, the CEO is the only person who IS the company. It's his or her job to build the moat, facing outward.

The CEO is also responsible for driving the company culture that helps deliver value to customers and sustainable competitive advantage based on the knowledge and relationships of the people who work at the company.

This is nothing new. It's the twin jobs of accomplishing the mission and caring for the people.

[Alicia Parr]

CEO's set the "where." Without the where, how to know "whether?" Without whether, grasping the "why", then "which", then "who", "how", and "what" to do?

Michelle Carter talks about what executives are accountable for in this post - http://www.missionmindedmanagement.com/operations-can-only-do-so-much-when-will-boards-hold-executives-accountable-for-executive-level-work. Recommended reading.

Here's a question. How many CEO's are truly incented by their board and investors to truly set the "where?" It takes quite a time delay to see a successful "where" achieved, with EBITDA or revenues or other financial benchmarks wavering up and down in the interim by shorter term influences.