Book How the Best Leaders Lead

Obstacles and Opportunities

These are dynamic times of great challenges and opportunities for businesspeople and their companies. Winners will seize the day and become stronger, while problems will swamp the losers. To lead in this hard, yet exploitable, environment, businesspeople must faithfully and competently attend to seven leadership basics:

1. “Set and achieve business goals” – Business is about sales and profits. Aim high.
2. “Innovate and market” – Selling depends on attracting and retaining customers, so develop great products and market them with power and panache.
3. “Solve problems and make decisions” – This is the essence of leadership.
4. “Set priorities and focus on key tasks” – Wisely allocate your company’s resources, including funds, time and personnel, to address priority issues.
5. “Be a role model to others” – Your staffers will fashion their attitudes and activities based on what you do and say.
6. “Persuade, inspire and motivate others to follow you” – Leaders must draw followers.
7. “Perform and get results” – Your career depends on it.

“We are living in the most challenging times for business and economics that we have experienced in our lifetimes.”

Organizations rise or fall based on leadership. As a leader, you should consider what leadership entails, particularly because, as psychology teaches, “You become what you think about most of the time.” Leadership is so crucial that researchers have conducted more than 3,000 studies trying to define its core skills. These studies identified 50 leadership traits; the seven most critical are:

1. “Vision” – This is the “most important” leadership characteristic. Great leaders can see over the horizon and plan their organizations’ destinies accordingly. Your firm’s values can help you picture its ideal future. Use that vision as a foundation for determining your company’s most appropriate mission and setting the goals necessary to make it a reality.
2. “Courage” – Organizations that fear taking risks will stagnate. Thus, leaders must be bold, so they can make smart gambles and beat their competitors. Leaders stay calm and cool during crises, maneuvering their firms safely over the marketplace’s rocky shoals.
3. “Integrity” – This is “the most respected and admired quality of superior...leaders.” Dishonest leaders poison their companies. As former General Electric CEO Jack Welch said, “Lack of candor basically blocks smart ideas [and] fast action...It’s a killer.”
4. “Humility” – Leaders need “the security and self-confidence” to see the merit of other people’s contributions. Leaders with giant egos often cannot view things objectively and are too proud to admit their mistakes. Such leaders often place their companies in harm’s way. Being humble is a sign of strength, not weakness.
5. “Foresight” – Savvy leaders can extrapolate information about the future from studying the present. They spot meaningful trends and position their firms to exploit such developments. This “first mover advantage” is an edge in a competitive environment.
6. “Focus” – Great leaders focus their own attention and direct the attention of their employees. They allocate their resources very specifically to fulfill their primary goals.
7. “Cooperation” – Leaders must be able to work with anyone, from laggards to top producers. The 80/20 rule posits that “20% of your people contribute 80% of your results.” A leader must keep the 20% motivated and guide the 80% to do more.

“Leadership is the single most important factor in the success or failure of a company or business.”

To gain the perceptiveness you need to lead others, you must develop self-awareness. The best way to explore who you are is to ask yourself some pointed questions and reflect on the answers. Consider: What do you excel at doing? What are your greatest talents and capabilities? What do you most want to achieve? What do you enjoy doing outside of work? If you were going to die in six months, how would you change your life? What matters most to you? Your answers will help you set priorities and focus on what you want to achieve.

“Proper prior planning prevents poor performance.”

Also ask and answer some business-related questions about your company, such as: What is its real business? What is its main purpose and deepest expertise? How do your customers feel about your organization? What makes the firm and its products special? What can it do immediately to improve?

Military Lessons

Business leaders can learn a lot from the strategies that great generals use to achieve their objectives on the battlefield. Military strategy involves certain core principles you can adopt to become a stronger leader. These rules include:

• “The principle of the objective” – Your business must have solid goals, and you must communicate these targets to all your employees.
• “The principle of the offensive” – Go on the attack. In business, that means “advertising, promoting” and “marketing” to increase your company’s sales and to bury the competition.
• “The principle of the mass” – Focus your resources where your firm’s competition is the weakest.
• “The principle of maneuver” – Use flexible, inventive production and marketing.
• “The principle of intelligence” – Learn what your competitors are doing.
• “The principle of concerted action” – Achieve hard goals through excellent teamwork.
• “The principle of unity of command” – Your personnel must know who is in charge.
• “The principle of simplicity” – The more complicated your firm’s directions and plans are, the less effectively your employees will follow them.
• “The principle of security” – Protect your company’s strength. Conduct scenario planning so your firm is ready for any eventuality. Maintain adequate cash reserves.
• “The principle of surprise” – The military employs “force multipliers,” such as lightning-fast attacks, to outfox the enemy. Similarly, your firm can act rapidly to outmaneuver competitors. Strive to be inventive, so you can surprise the competition and the marketplace.
• “The principle of economy” – Do not waste. Put brainpower to work to extend your financial resources.
• “The principle of exploitation” – Use any advantage as powerfully as possible.

“Every minute spent in planning saves 10 minutes in execution.”

Managers are responsible for seven vital functions, all of which are teachable:

1. “Planning” – To organize your thoughts and plans, write them down.
2. “Organizing” – Develop a comprehensive list of the administrative components you must have in place to attain your goals.
3. “Staffing” – The people you hire have a powerful impact on determining your firm’s success.
4. “Delegation” – Conceptualize important projects, establish ambitious achievement standards, and then schedule and assign the work.
5. “Supervising” – The leader is responsible for the results, no matter who actually does the work. “Management by wandering around” is still a good way to monitor your employees’ activities.
6. “Measuring” – People achieve their goals more readily when they have metrics to assess their progress.
7. “Reporting” – Most organizational problems stem from inferior communication. Ensure that your managers and employees have the information they need to do their jobs.

“Everything you do or say adds up or takes away from your credibility.”

Communicating well is a vital leadership skill. In fact, 85% of your leadership success depends on your ability to communicate well. Carefully plan and practice what you are going to say to your employees, so you have confidence that your words will motivate them.

Management’s success depends on seven determinants: “productivity,” “customer satisfaction,” “profitability,” “quality,” “innovation,” “organizational development” and “people-building.” To create a team of capable employees who can become outstanding producers, “hire slowly and fire fast.” That is, take the time to find the right people, but quickly get rid of anyone who becomes a disruptive problem. Recruit results-oriented overachievers.

“The things that matter most must never be at the mercy of the things that matter least.” (Goethe)

Use the “law of three” to select the right person for a job: Speak with three candidates for any position, interview the person you like most three times, and meet with him or her in three separate locations. When it comes to salary, apply the “good people are free” rule: Great employees more than make up for the cost of their compensation.

“The best companies have the best leaders.”

Once you have the right people, organize them into effective teams that have the following characteristics:

• “Shared goals” – Every team member understands the group’s primary objective and how to work with others to achieve it. All team members should agree on important performance standards.
• “Shared values” – Team members need the foundation of “shared beliefs and shared principles.”
• “Shared plans” – Team members must come together to discuss what they plan to accomplish in thorough detail.
• “Clear leadership” – Every team needs a leader to be in charge, call the shots and direct the action.
• “Continuous evaluation and appraisal” – Your team learns from constructive feedback and from its mistakes.

Solving Problems in 10 Steps

Many leaders find the solutions to daunting problems by following this 10-step plan of attack:

1. Precisely define the problem.
2. Consider it from additional angles. As Jack Welch said, “Continually expand your definition of the problem, and you expand your view of all the different ways that it can be solved.” Ask, “What else is the problem?”
3. Re-examine the problem, looking at it over and over. Seek new ways to consider it. Continue to ask, “What else is the problem?”
4. Identify the problem’s primary causes.
5. Consider any and all solutions that will eliminate the problem. Do not settle for just one answer. Develop numerous solutions to the same problem.
6. By now, you have thoroughly examined the problem, its causes and some potential solutions. Given this hard work, you are ready to decide which tactic will work best, and to go for it.
7. Assemble your team and dole out assignments to fix the problem according to your chosen solution.
8. Establish a deadline and create a schedule that meets it.
9. Put your planned solution into action, but have a secondary plan ready in case your primary plan does not work.
10. Circle back to the problem later to ensure that you have eliminated it. If not, put Plan B into action. Have a Plan B.

“The race is not necessarily to the swift, nor the contest to the strong, but that’s the way to bet.” (writer Damon Runyon)

Leading a balanced, orderly personal life will help you be a better leader. Find practical methods for eliminating stress, unhappiness and dissatisfaction. Periodically “reinvent” who you are. Often this involves striking out in some entirely new direction in your work. Take the time you need to achieve serenity and peace. On a daily basis, simply turn everything off for a time. Be quiet, calm and peaceful. Savor the silence. Use your former TV-watching time to get in closer touch with your loved ones. Be considerate to them and to yourself. Strive to live a healthier life. Eat better. Exercise more. You are special and valuable. Treat yourself accordingly.