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Marshall Loeb On Leadership

Ten Steps To Effective Leadership

Marshall Loeb
Editor-at-Large at Fortune Magazine

As an editor travels across the country, listening to high executives, he hears - over and over - one plaintive question:
Where have all the leaders gone? Where are the patrician, eloquent, inspirational Churchills and Roosevelts, the rough-hewn, plain-spoken but ultimately charismatic Harry Trumans and Pope Johns, now that we need them so badly?

We are desperate for leaders. Whole countries and individual companies, indeed all organizations - churches, charities - are eagerly searching for leaders.

I think that the quest for great, stirring, inspirational leaders - more than mere managers - will preoccupy us for years to come. Find and develop tomorrow’s leaders - better yet, become a leader yourself - and you will do awesomely well.

Thomas Carlyle had it right I believe: All history is biography - as so all great companies are indeed the direct reflection of their leaders. The leader sets the tone, the mood, the style, the character of the whole enterprise.

How do we find leaders? How do we create leaders? What makes a good leader? If all happy families are alike, what characteristics are common to all successful leaders? What qualities are needed to turn a manager into a real leader?

I’ve asked these questions in many interviews with experts on the subject, notably including Warren Bennis, the psychologist, sociologist, economist, and USC professor who has spent years studying 150 leaders, mostly corporate chiefs. Let me outline what I conclude are ten steps to making an effective leader.

Step One

Leaders know that there’s a huge difference between managers and leaders. The late Grace Hopper, a management expert who was the first admiral in the U.S. Navy, said, “You manage things, but you lead people.”

Warren Bennis puts it this way: “Leaders are people who do the right things. Managers are people who do things right. There’s a profound difference. When you think about doing the right things, your mind immediately goes toward thinking about the future, thinking about dreams, missions, strategic intent, purpose. But when you think about control mechanisms. You think about how-to. Leaders ask the what and why question, not the how question. Leaders think about empowerment, not control. The best definition of empowerment is you don’t steal responsibility from people.”

In their bad old days, companies like IBM, GM and Sears were overmanaged and underled. Success had made them content (Much the same fate has befallen the Mafia, but that’s another story). As Bennis puts it: “Those whom the gods want to fail, give them 20 or 25 years of success. Just when you start thinking you’re really terrific, you start dictating to the market instead of listening to customers.”

Small wonder, let me add, that of the companies listed in the Fortune 500 twenty years ago, more than 60% are gone. They failed because they lacked the right leaders for the times.

Step Two

The leader must have a clear idea of what he or she wants to do, a strongly defined sense of purpose. And when you have an organization where the people are aligned behind a clearly defined vision or purpose, you get a powerful organization.

The most exemplary leaders are pragmatic dreamers. Walter Wriston, now retired CEO of Citicorp, defined his long-term plan for his bank as a dream with a deadline.

What employees want most from their company leaders is direction and meaning, trust and hope. Bennis says that every leader he has spoken with had a willful determination to achieve a set of goals, a set of convictions about what he or she wanted his or her organization to achieve. Wayne Gretzky, the hockey hero, puts it nicely: It’s not where the puck is that counts. It’s where the puck will be.

Step Three

Leaders need courage. That’s because leaders are not always popular. In fact, they are often terribly unpopular. As the historian Paul Johnson says, “However generously displays of leadership may be acknowledged by posterity - particularly distant posterity - they usually evoke huge hostility at the time. Truly, the lesson of the modern world is that no great deed of statesmanship goes unpunished.”

Leaders have a rare vision and foresight - they recognize the need for change before others do - and they have the courage to lead change, which is often painful and thus unpopular.

To take just one example: Jack Welch shook up General Electric so thoroughly, reducing the number of employees by 200,000, that Fortune dubbed him Neuron Jack: you know, the buildings are left standing but everyone in them is wiped out.

But in the long term, the achievements of the leader are usually recognized and applauded. And Welch today, despite his company’s recent problems with Kidder Peabody, is one of America’s most celebrated business leaders. He is still constantly challenging, changing, restructuring, looking ahead--in short, leading.

Step Four

The best leaders have potent point of view. Michael Eisner, Disney’s lion king, says, “You know, we don’t have a vision statement, but we have a strong point of view. What amazes me is that it’s always the person with the strong point of view who influences the group, who wins the day. Around here, a powerful POV is worth at least 80 IQ points.”

Step Five

The leader needs consistency. The least effective leaders tend to do whatever the last person they spoke to recommended. Or they dash forward with the latest good idea that pops into their head. But if followers are to trust the leader, they have to know what to expect. So sometimes the leader has to put off a grand idea or a glorious opportunity until he or she has had a chance to convince his or her own allies of it.

A main problem for imaginative, impetuous Bill Clinton as a leader is that he plunges ahead with the idea of the hour without first checking it out and selling it to his stakeholders, especially the Democratic leaders in Congress - and, of course, the Republicans, too. In business as in politics, the effectiveness of a decision is the quality of the decision multiplied by the acceptance of it.

So the leader has to be a superior communicator. The key to this, I think, is consistency, simplicity, and patience. The leader must communicate a basic message over and over and over again. Harvey Golub, CEO of American Express, says that it’s just when he complains “I’m becoming so tired of repeating this message so many times” - it’s right at the moment that his PR people say, “Great, Harvey, the employees are just now beginning to get it.”

Step Six

The leader - or the leader in training - needs candor. He needs to be straight and direct, and he or she needs to develop associates who are equally straightforward, particularly when dealing with him.

Most managers won’t speak up if they think their point of view will vary with the conventional wisdom or their boss’s POV - even if they think their boss is going to make an error. What the leader needs to cultivate are firm-minded lieutenants with the wisdom and the courage to say no.

Step Seven

The effective leader limits himself to just several key objectives. GE’s Jack Welch says, “Look, I have only three things to do. I have to choose the right people, allocate the right number of dollars, and transmit ideas from one division to another with the speed of light. So I’m really in the business of being the gatekeeper and the transmitter of ideas.”

Step Eight

The leader is willing to borrow the best ideas, methods and processes from others, to benchmark widely and intelligently, to stamp out the not-invented here mentality.

General Electric says it will plagiarize from anybody. For example, GE was among the first to send its executives to Bentonville, Arkansas, to study Wal-Mart’s selling methods. Sam Walton was sincerely flattered. As Picasso is said to have remarked, “Good artists copy; great artists steal.”

Step Nine

Are leaders born - or made? That question reminds me of the Bennis story of the CEO’s dull son who comes home with a report card loaded with D’s and F’s - all in red ink of course. “Well, Dad, “ the kid asks, “is it nature or nurture, genes or the environment?”

I believe strongly that leaders aren’t born that way; they’re made, usually self-made. But it’s helpful to have had a strong, determined set of parents. Studies of leaders show that they usually had someone in the family who said, “Go for it, you can do it!”

It’s also wise to have as wide a set of experiences as possible. One of the flaws of American business is that we have too much vertical mobility. Managers inch up the same smokestack, learning more and more about less and less. But really smart companies - including all represented here this morning, I’m confident - move promising people around horizontally, having them serve time n most of the major divisions or departments to give them a kaleidoscopic view of the organization and the mentoring of a variety of bosses.

Step Ten

Finally and briefly: How do you go about becoming a good leader? What do you tell your subordinates to do? Let me quote from Professor Bennis’s short course: “Be yourself. Figure out what you’re good at. Hire only good people who care. Treat them just the way you want to be treated. Switch from macho to maestro. Identify one or two key objectives or directions. Ask your co-workers how to get there. Listen hared. Get out of their way. Cheer them. Count the gains. Start right now.”

Marshall Loeb’s speech on Leadership was given before a Minnesota Center for Corporate Responsibility audience on June 21, 1995. Mr. Loeb is Editor-at-Large at Fortune magazine. MCCR thanks Mr. Loeb for giving his permission to present this speech.