Where Are the Outstanding Business Leaders?

As I travel the globe, meeting with senior executive teams, coaching executives, and speaking to various management groups, it is clear to me that the world of business has very few outstanding leaders. There are many very good leaders, as well as a vast supply of good leaders. Outstanding leaders are a rare breed indeed. The distribution of outstanding leadership, like anything else, follows a bell-shaped curve. I always knew this. You know this. Actually, everyone has always known this. But nobody really cared because being a good leader has always been good enough to keep a position and meet its basic requirements. But things are changing quickly. The bell-shaped curve is being completely upended, as all organizations increasingly need to possess a larger percentage of very good and outstanding leaders in order to compete.

I had suspected the need for this critical shift for a couple of years. As we were interviewing executives as part of our “Trends in Executive Development Research Study” (Pearson 2013), it became very clear. Beyond the actual research, an interesting qualitative theme emerged. When I ask executives to identify a great leader in their lives—someone who had a positive impact on them and helped shape their values—roughly 9 times out of 10, they mention a former teacher, coach, parent, grandparent, or friend, as opposed to a business leader. Not only were the leaders mentioned not business associates, many times those executives identify the opposite: the poor managers they've endured, the unkindness, the lack of mentoring, sometimes the nightmares. Why is this?

It's not that those cited as poor leaders were bad people. More often, what became clear is that many managers are promoted far too early—certainly before they are ready to assume leadership roles. They are not adequately trained, coached, or mentored by more seasoned executives, whose experience and insights can dramatically shorten a manager's learning curve. More than anything else, I believe the speed and pace of change in business—technology shifts, demographic shifts, and a more demanding operating environment—present daunting challenges to most leaders. Very few possess both a strong inner core of values, character, beliefs, thoughts, and emotions as well as the outer core leadership competencies that are required to successfully overcome the challenges of today's global environment. In the end, too many executives are beginning to derail or have already derailed because of character flaws or, more likely, sheer immaturity.

Let's look at a couple of real-world examples of outstanding leadership. Transforming culture starts with a CEO who is willing and able to “think different” and “think big.” Aside from these qualities, today's CEO must possess a counterbalancing humility (which we will learn more about later in this chapter), an unshakable character and inner core, and outer core leadership skills. Combine all of these elements and you have a great leader, able to walk the talk.

The Role Models of Thinking Different and Thinking Big Leadership

Let's look at two CEOs (one current, one former) who are recognized worldwide as leaders possessing strong character, a strong inner core, superlative leadership skills, and the expertise to positively transform company culture. In the subsequent chapters you will hear from the 14 CEOs we asked to be in this book because of their strong personal and professional leadership reputations and pedigrees. Let's start, though, with Jeff Bezos, the current CEO of the wildly successful U.S. online retailer Amazon, who founded his company in 1994 as an online bookstore. Bezos has built Amazon into the largest retailer on the web, selling everything from groceries to electronics to shoes. Bezos thinks differently and he thinks big. And, he is mature. Amazon consistently succeeds with risky new ventures, an achievement that Bezos credits to tenacity and obsession with customer needs. Excerpts from an interview in U.S. News & World Report, which David LaGesse conducted with Bezos in 2011, contained numerous examples of his strong inner core (i.e., character, values, positive beliefs, positive emotions, self-concept) and outer core (i.e., leadership competencies) that, together, form the foundation of what I refer to as leadership maturity.

When Bezos was asked about the need for a long-term view, he replied:

In this answer, Bezos reveals numerous examples of his leadership maturity:

• Strong statements of conviction
• Character elements of diligence and focus
• The ability to handle uncertainty and ambiguity
• An understanding of the value of experience and “references”
• Compelling beliefs about what is possible
• A powerful sense of optimism

Another great example of thinking different and thinking big leadership is Anne Mulcahy, former CEO of Xerox. When Mulcahy took over Xerox in 2000, she famously delivered a blunt message to shareholders:

Shareholders, wanting easy answers to complex problems, dumped their shares in droves, which caused Xerox's stock price to plummet an alarming 26 percent the very next day. Looking back on that dark time, Mulcahy conceded that she could have delivered her message in a more tactful, careful manner; however, she decided it would be more credible (and thus authoritative) if she acknowledged that the company was broken and that dramatic actions to fix it were required.

Although 25 years with Xerox meant Mulcahy knew the company better than most, when she was named CEO, she honestly acknowledged her lack of financial expertise. Enlisting the treasurer's office to tutor her, she wisely acquired detailed knowledge on the fine points of finance before meeting with the company's bankers. Her advisers urged her to file for bankruptcy, which would clear Xerox's staggering $18 billion of debt. Mulcahy, however, resisted insisting, “Bankruptcy is never a win.” In fact, Mulcahy believed using bankruptcy to escape debt would make competing as a high-tech player in the future even more difficult for Xerox. Instead, she chose a much more treacherous, risky goal: She planned on “restoring Xerox to a great company again.”

To gain support from Xerox's leadership team, she met personally with the top 100 executives. She shared in no uncertain terms how dire the situation was, laying out the facts on the table. Mulcahy then asked them one essential question: Are you ready to commit? A full 98 out 100 answered yes, renewing their commitment to Xerox. The bulk of those executives are still with Xerox today.

Like Bezos, Mulcahy's actions reflect numerous examples of her leadership maturity:

• Character elements of honesty, modesty, humility, and courage
• A powerful sense of vision
• Unwavering forthrightness in the face of difficult circumstances
• Empowering others with insight and skill
• Passion, drive, grit, and incredible zeal

These are great lessons of leadership from Bezos and Mulcahy; however, you will read about other powerful leadership lessons from the 14 CEOs featured in this book. All of them were selected for inclusion in this book because of their positive reputations and their personal and professional pedigrees. As you read about these impressive executives in our compelling interviews, you will learn—as we did—that just like Bezos and Mulcahy, they are the epitome of CEOs who think different and think big but who also counterbalance their sheer conviction with humility. Harib Al Kitani, CEO of the $6 billion Oman LNG, said it best, “For me, success is not just meeting the target. Success is going beyond what is expected of you. You cannot do it alone. Having people marching behind you with enthusiasm and trust, you will achieve great things. However, you need to demonstrate you care for them by being close to them and extend this to all your shareholders and customers and do so with great authenticity and see the results unfold.”

Identifying Leaders and Future Leaders You Want on Your “Transformation Bus”

CEOs often ask me what they should look for in identifying their leaders (including their fellow C-level executives and leadership teams) and future leaders. My answer is always clear: look for people possessing both a strong inner core set of values, thinking patterns, and emotional makeup, and a strong outer core set of competencies. This inner core and outer core duality provides leaders the capability to be agile—learning agile, change agile, and people agile. These three elements must exist in all your leaders, future leaders, and your entire employee population if you are to succeed in your transformation efforts.

The most critical thing to look for and measure, however, is character. This attribute is critically important for all leaders if they are going to be successful transforming culture. This attribute is the foundation that will support—and reinforce—a think different and think big culture.

The essence of character is undoubtedly multifaceted and complex. When working with executives who possess extraordinary character, I see the qualities exemplified by Jeff Bezos, Ann Mulcahy, and our other 14 CEOs. When it's time for me to help an organization identify the right leaders and emerging leaders who belong on their transformation bus, I look for evidence that they are, at a minimum, courageous. I look for leaders who have the guts to make the tough decisions but the ethical foundation to make the right ones. I look for a willingness and a readiness to sometimes stand alone, in the teeth of pressure (possibly even from their own managers) to follow what may initially seem like a tougher, less forgiving path but in the end proves to be the right path—the only path—because it was the most ethical path to follow. I explain, in my coaching, that saying no to the easy route, the rewarding route, when that decision doesn't align with what you know is the correct one, may seem difficult. However, the minute you begin flirting with such decisions—those that yield better operating results, greater revenue, and greater profits yet clearly compromise you ethically and morally—you enter a world of agony and stress. Making choices such as these will lead you to painful long-term consequences, not the least of which is an increased probability you will say yes to yet more insidious acts in time. That is the danger of the unethical slippery slope—the farther you traverse it, the slipperier it becomes. This is exactly what happened to Dennis Kozlowski. Great leaders—truly great leaders—have the courage to make the right decision not just in the easy times, not just in the obvious times, but every time. Every. Single. Time.

Great leaders (and future leaders) also possess the character traits of diligence, gratitude, honesty, modesty, and loyalty.

Most Poor Leadership Is Just Plain Immaturity

Leaders generally derail not because of an inherent character flaw but rather because they respond with astounding immaturity to mounting stress and change. Immature leaders whose thoughts, beliefs, attitudes, and habits leave much to be desired can, however, recover. Unlike the poor character exhibited by the leaders in the previous section, immature leaders can, and sometimes do, recover. For example, one of the most important traits universally possessed by successful leaders who are able to lead culture transformation efforts is their helper trait. They are selfless; they are giving. They possess an altruistic element to their inner core that demonstrates the mature behaviors associated with the helper trait. Beware, however, that when help is executed in a less than authentic way—say, with strings attached—leaders demonstrate the immature behaviors associated with that trait. As you read the subsequent chapters, you will see that while a lot of our 14 CEOs' leadership success comes from their own strong conviction about their own abilities, more of their own success and their organizations' success is directly attributable to the altruistic, giving, selfless cultures they have created and continue to cultivate. Kathy Mazzarella, chairman and CEO of Fortune 500 company Graybar, said it best: “I know there is always a lot expected of me in my role. I am committed to helping others including our employee/owners, our company, our customers, and our community. I am driven to help more than anything.”

I believe that organizations that do not compulsively develop their leaders and future leaders to be agile in the face of accelerating change and turbulence—through coaching, mentoring, executive development programs, action learning projects, and the like—unknowingly create and advance leaders with a high probability for derailment and failure. This is the real prescription for leadership disaster, and almost certainly is the prescription for organizational failure. At a minimum, when an organization, leader, or future leader leaves things to chance, the probability of leader derailment or success is nearly the same. However, with targeted coaching and real prescriptions for strengthening inner and outer core leadership capability, leaders and future leaders (and organizations) can seize the massive opportunities that await them, while mitigating the enormous risks inherent in the unrelenting pace and complexity of change in the global business environment.

Transform Mind-Sets, Transform Behavior, Transform Culture

The most effective way for your employees to change how they view themselves and what they are capable of achieving is helping them change their references. In doing so, you help them learn to succeed. The more successes you can help them create, the more chances they will have to interpret these wins as permanent, pervasive, and personal. The key to successfully internalizing these crucial connections lies in how often, how effectively you lead them to create positively charged references. As they rack up—with your leadership—yet more and more positive references, they're faced with no choice but to interpret both the causes and the consequences of those references in permanent, pervasive, and personal terms.

Likewise, continuing to build on these experiences allows them to build a stronger, more powerful reference system. By definition, they begin to correctly interpret whatever inevitable setbacks and failures they experience as being less permanent, pervasive, and personal. All leaders much have the courage to help their employees become more courageous in the face of transformation, to take reasonable risks in instances of peril, to make positive choices based on the strength of their inner core, and to accept the consequences of their choices. When things go wrong, they must have the resilience to course-correct, course-correct again, and indeed never give up their pursuit of positive, constructive change. This is the course of a leader, a course essential to the company's success and to that leader's personal leadership success.

Achieving this is certainly easier said than done. Where do you start? That's easy. It starts with you. Ask yourself this: Do I possess a positive, self-affirming value system? Is my inner core mature, strong, and vibrant? Notice in the Wheel of Intelligent Leadership™, your self-concept is truly multifaceted and complex, consisting of many elements, including your references and belief systems. Also included is your value system, within which your character plays out. Once you have isolated and identified your character, the two facets are intertwined, never to be separated again.

Visualize an iceberg. Beneath the water's surface is the larger volume of ice, which constitutes your character. Above the water's surface, the smaller volume of ice represents your values. Your character is always evidenced through your values and—as a leader—you must consciously appreciate the interplay between the two. To value something is to place importance on it, to show genuine interest. If you, for example, value money, you are interested in money. You will, therefore, tend to read about money, talk about money, seek to earn money, save money, spend money, and invest to hopefully make money. You honor what you value by your attention. And when you display this focused interest, you, in turn, create a favorable attitude. Your attitude, in turn, moves you to act. You find pleasures associated with some values more than with others. There are two types: ultimate values and immediate values. Ask yourself this: What do I value most? You may answer, for example, love, security, or independence. These, then, are ultimate values. That is, they represent what you ultimately desire.

On the other hand, if you answered, “I want money and family,” these are more immediate values, and you should probe further. Ask yourself this: What will money do for me? And: What is the importance of family in my life? To achieve greater levels of maturity and success, leaders must:

• Recognize the difference between immediate and ultimate values.
• Understand their own hierarchy of values.
• Understand where their hierarchy of values may deviate from or align with elements of their character.
• Set goals for sustaining their strengths and improving development needs in alignment only with ultimate values that support the elements of character.

This is no easy task; however, the journey you take to strengthen your inner core can be one of the most rewarding ones of your life. It will show you the signs for unlocking and unleashing your massive potential as the foundation for helping others unlock and unleash their massive potential. This is how we grow leaders. This is how we solve the leadership crisis we currently face. It's the path to better understanding not just yourself but others, as well. And, it's the direct path to helping others become more capable (can do), committed (will do), and aligned.(must do).

As we discussed earlier, these are the three leading indicators that provide the foundation for how people perform individually and collectively, all of which defines your current culture and how strong or weak it is. What do you have to do? Like the CEOs we have highlighted in this book, you need only do one thing: Commit to becoming the best leader you can be—every day.

I had the honor of speaking at Claro Colombia's management conference in Cartagena, Colombia, at the beginning of the culture transformation work we were doing with CEO Juan Carlos Archila and his executive team. Before I delivered my speech, Archila beautifully demonstrated this to the 1,000 managers in attendance when he said, “This marks the beginning of our coming together as a company and we must commit to becoming better. We must commit to being better today than we were yesterday. This applies to all of us individually and collectively. I take nothing for granted. I have been the CEO of our company since 2012, but I stand here today and say that this feels like the start of my career.”

The Nuts and Bolts of Getting Your Team on Board

Turbulence and transformation have become a way of life in organizations. Here's how to get people on board.

Part 1: Design the Transformation

To understand how to do this first requires an understanding of how to manage the three major activities involved with transformation:

1. Defining and designing what the end result of the transformation must look like.
2. Assessing the current situation in relation to the desired transformation (this always includes a survey or assessment of the health and vibrancy of the current culture).
3. Planning and managing the transition from the current situation to the desired future state.

Fifteen or more years ago, most so-called change leaders first assessed the current situation and then they designed the future state. Often this strategy created only small improvements because it was based on what-is and did not take into account the desired what-if of a future state. Today, leaders of transformation efforts should create their compelling future in general terms, defining what they must see, how they want to see it, and when they want the future to arrive. This is the architecture. Planning the future is possible, even when change is constantly a challenge. Next, leaders design the future in more specific terms. A thoughtful, meticulously planned transition is critical; otherwise, there's no road map for moving from the present to the future. In addition, ongoing, everyday business must be managed and led at the same time as the change. This can put a great deal of pressure on leaders to execute the required change and manage business as well.

Part 2: Develop a Transformation Strategy

D	= demand and desire for transformation and the dissatisfaction with the current situation. A high D provides the motivation for the change (a critical requirement here in establishing a high D is to assess the current culture with a cultural assessment tool).
V	= the vision for the transformation, stated in a clear, compelling way that is well and widely communicated. Without a strong V, there is neither a shared direction nor a belief that those in charge of the transformation know where it's going.
P	= the plan and process for transformation. This is similar to transition, but it also includes concrete information about what the organization will look like after the change occurs. Thus, P has some elements in it from design the future.
R	= resistance to the transformation. Almost every transformation effort incurs resistance. With too much R, either the transformation effort will never materialize, or the change will occur but implementation will be very difficult. With no obvious resistance, a leader should begin to wonder why. Where is the resistance? Are we really doing something different enough?
T	= the transformation that actually occurs. The transformation strategy formula says this: for successful transformation to occur, there must be sufficient D (demand, desire, dissatisfaction), and sufficient V (a clear and compelling vision for the transformation), sufficient P (plan and process for how to get to the end results), and all three (D, V, and P) must be greater than R (resistance to the transformation). These are the elements of the transformation that leaders must oversee. Notice that there is a multiplication sign between the first three elements (D, V, and P) rather than an addition sign. This is because if any of these elements is zero, no transformation will occur, even if the other two elements are strong.

Part 3: Take Charge of Transformation

To take charge of transformation while still leading and managing the ongoing business, you must take the first two areas—designing the transformation and developing a transformation strategy—and add one more element. Leaders must learn how to be change champions. In Figure 2.3, notice that Design the Future includes anchoring or institutionalizing the transformation and addressing resistance. Resistance also emerges when the current situation is being assessed and people are just learning about the need for transformation. This is the time to increase the desire and demand for the transformation. Resistance will also emerge during the transition period. Leaders need to anticipate and respond effectively to the inevitable resistance that occurs during these three periods.

Measure and Course-Correct

Prescription before diagnosis is malpractice in medicine, but it's also malpractice in the world of leadership development and culture transformation. You must have a passionate and diligent focus on measuring everything and, most importantly, you must measure the strength and vibrancy of your current culture, which has a big impact on your organization's overall readiness to transform (which also must be measured). Here are the elements of measurement that can enable positive transformation; it begins with leaders who make the decision to be vulnerable individually and a leadership team that likewise makes the same decision collectively.

• Are we measuring the strength and vibrancy of our talent levers?
• Are we measuring our leading indicators—the individual capabilities of our leaders, future leaders, and individual contributors? Are we measuring their commitment to our values, vision, and mission? Are we measuring how well they are aligned with the vision of the organization we must all create?
• Are we measuring the strength and vibrancy of our culture? How engaged are our people? How engaged are they with the vision of the new organization we must all create?
• Are we focused externally on getting feedback from customers, suppliers, and competitors?
• Are we measuring the right metrics operationally?
• Are we leveraging this world of feedback and demonstrating the willingness to be vulnerable, so we can create the organization we must create?