Episode Transcript
Speaker 1 00:00:13 Hey everyone. Today I'd like to talk about a really important topic management and leadership, which is a never ending deep topic heard by many, many, many people over many years. Now, first of all, what qualifies me to talk about this a couple of things. First of all, I've studied management practices and management models and leadership models in hundreds of companies. The second is I've had the chance during my career to work with leaders in very interesting different kinds of companies and observe them and learn from them. And the third is I've had the chance to be a leader many times in two startup and growing companies in a couple of very large companies. And I certainly don't feel that I'm the expert, but I think I have some things to share and I just feel a little bit of an urgency <laugh> to get it out there.
Speaker 1 00:01:03 Let me start by saying that even though you could debate the difference between management and leadership, they're really the same thing. You can't be a good leader without being a good manager, and you can't be a good manager without being a good leader. And the first concept I want to just start with is the idea that leadership must exist in context. Your role as a leader will change depending on the company, the growth rate, the business cycle, the economy, the political environment, and of course the particular situation that you're in in your job. There are fast growing companies, there are slow growing companies, there are companies that are highly collaborative. There are companies that are very competitive. So you have to adjust your leadership style depending on where you are and select the environment where you feel that you're fit. But even given that there are some fundamentals that really don't matter where you are or when it is.
Speaker 1 00:01:58 And so let me talk about those and I'm gonna put them in the category of 10 things. The first is belief in the power of individuals. When you're a leader, the most important thing that happens as you change from an individual contributor to a leader, and this happens daily as you shift from doing your own work to doing the work as a manager, is to believe in the power of others. And to understand that your job as a manager or a leader is to help others succeed, not yourself. And so you could think of that as being a coach, being someone who aligns, others who selects people for roles, evaluates performance, although that's a lot less important than you might imagine, but you have to fundamentally believe that other people can do amazing great things and that they will do it in individual ways. They will not do it in a conforming way.
Speaker 1 00:02:48 Person A might do it by focusing on innovation and creativity. And person B might do it by focusing on execution and alignment and productivity. And they might both come up with really amazing results in different ways. And I've found over the years that you can't turn an apple into an orange. You want to make each apple the best possible apple can be, and each orange, the best possible orange it can be. And that's really a lot of your job is understanding the power of individuals and believing in them. The second is having a sense of morality. And that sounds a little bit odd, but so many of the things that happen in business, in work, in society, come down to issues of is this a decision that you're making because of yourself or because of the larger collective? Good. And companies themselves are essentially systems or societies.
Speaker 1 00:03:37 And so every day, while people are making decisions about what to do, they can decide, am I gonna do this in a way that helps everybody else or am gonna do this in a way that helps me? And that's a bit of an issue of morality. The reason the word morality is a good way to think of it is in the broader society, in our jobs as citizens, when we decide to pick up a piece of trash or help somebody or give money to a homeless person or stop at a red light and not go through it, we're kind of making a decision that maybe this isn't the best thing for me, but it is helpful for everybody else and therefore it's the right thing to do and that's the way I'm gonna live my life. And that's what goes on inside of companies. In fact, Edgar Shine told me this in his research on culture that the most fundamental value or the most fundamental cultural trait of high performing companies is that people are willing to help each other.
Speaker 1 00:04:25 And you need to believe that and reinforce that as a manager or as a leader. The third discipline, or the third characteristic is humility. And humility is sometimes people are born with it and some people are not born with it. And I won't mention any names, but there are a lot of people in the public domain who clearly are not very humble, and there is a tendency for younger people to copy them and aspire to them and mimic them. But in the long run, and I can speak this through example, I've worked with some very arrogant leaders and been around a lot of them. To be honest, humility works better. It makes you a better listener, it makes you a better learner. You're more open to mistakes and you will more quickly repair mistakes. Let's face it. As a leader, your responsibility is to make the whole organization perform well, not just one individual piece of it or your role.
Speaker 1 00:05:20 And humility gives you the opportunity to do that. Humility is also a form of respect where you respect others and you respect the fact that things will happen that you're not aware of and you're not comfortable with, and you will learn from them. You can think of growth mindset as a part of humility. So I think that's really number three. Number four is inspiration. This is an incredibly important thing. Now, being inspiring doesn't mean you have to be a great public speaker. You have to be a great writer or a great artist or anything. You really just have to create energy of your team. Microsoft actually calls it creating energy. People create energy in different ways. In my particular case, I tend to create energy in our organization around our vision and our mission and our community and what we're trying to do. And people really like hearing that from me and I, I know that.
Speaker 1 00:06:11 So I spend a lot of time thinking about how I can create more energy in the organization when I see a lack of clarity or a lack of energy. You have to figure out how to do that because everybody comes to work with their own issues, their family issues, their personal issues, their didn't get enough sleep, whatever it may be. Their computer's broken, their phone ran outta juice, whatever. And so your ability to create that level of energy and passion is important. And sometimes you have to build that up in yourself. And by the way, creating energy means you have to create energy in yourself, get enough sleep, get enough rest, make sure you understand your own personal values, and you bring those to work and live by them. Number five is to make decisions. It is sometimes and oftentimes very hard to decide what to do.
Speaker 1 00:06:58 In fact, I think one of the most interesting aspects of business for me personally is this gigantic puzzle that goes on all the time about what to do next. Should we do A or B? Should we do two times more A or one times more B, or two times more B and one times more? A, this is living in an uncertain environment, and business is all about uncertainty. If it was certain and easy, everybody would be growing at the same rate. Businesses are competitive. There are people copying what you do. There are many forms of innovation. You have to make a decision. Now, broadly speaking, you need a context for making decisions. People will notice if you randomly make decisions in different directions. In fact, they will hate that. And so the decisions you make really need to be made in some pattern. Generally speaking, I find companies fall into three or four categories.
Speaker 1 00:07:50 The first is highly innovative in creative companies where decisions are always made about we could do this in a more creative way. Let's spend more time thinking about this. Let's ponder a new dimension to this problem. Those companies tend to differentiate themselves on having very creative and innovative products, and people will buy from them because of that. Some companies are number two, they focus on low cost. They're very efficient, they're very cost effective. They don't charge a lot for their products and they scale. You can make decisions along that lines on how to ring excess out of the company and always make people more effective and more efficient. The third is being customer intimate companies, companies that want to focus on a total solution, an integrated solution to the problem or the customer's needs. And so you can make decisions in that way. And then the fourth are companies that basically are just very, very competitive fast followers who really don't do any of the first three things, but they're very good at replicating or improving on others.
Speaker 1 00:08:51 And so your job as a manager or a leader is to understand which one of those models works for you and make the decisions that need to be made. People will be frustrated if you don't, and you will just have to take some risk doing that. The sixth area is considering all stakeholders. And this is a very contemporary topic in the world of sustainability, but it's actually quite a big important thing. Who are your customers? Is your customer, the person that bought your product or service? Is your customer the company that bought your product and service is your customer. The community in which you work and live is your customer. The investors who gave you the money and the capital to get your company off the ground is your customer, your boss, your peers, your reputation, the people who are paying attention to what you're doing, your employees, your supply chain, your suppliers, all of those different groups, including the political and societal people around you are all part of your stakeholders.
Speaker 1 00:09:55 And in many ways, as a leader, you have to look at all of those constituencies and decide on a daily or monthly or weekly basis, are we paying attention to the right stakeholders in our team, in our projects, in our groups? And that's a very important part of your job as a leader. The seventh is to honor and respect technology. One of the things you cannot get away from is the fact that technology will always be automating, interrupting and dislocating what you're doing. This isn't something new. In fact, I'm tired of listening to podcasts about AI and about how general purpose AI is gonna take over the world. That's not a new story. I've been involved in technology since the 1970s when the first word processors were created, and everybody who's worried about the end of jobs for typists, the reality of it is this is part of business.
Speaker 1 00:10:48 And the companies that use technology well or replace jobs with technology or automate certain things, will come out and bite you. I mean, they will. They will do things and you'll scratch your head and think, how the heck did they do that? So rather than say, oh, we're we're not a technology oriented person, or I'm not the technology group, we'll let somebody else do that. You as a leader have to have a healthy respect for technology. You don't have to be an engineer, you don't have to understand how it works, but make sure you're looking at it and learning from it and embracing it and re-engineering and reinventing how you work and your team as technology evolves. The ninth area is something that I think kind of goes without saying, but I want to mention it anyway. And that is to learn to love and study and understand people.
Speaker 1 00:11:35 And that gets into the issue of what is often called human-centered leadership. We wrote a whole piece on this from the big reset, and it's pretty popular. And the idea is that in every business decision or team or project status or investment decision, they're really two sides. There's the business decision on the numbers, the competitiveness, the innovation, the creativity, and then there's the people decision. Will this decision fit into the group? Will we empower the right people? Do we have the right culture? Will people respond to this Well, will they pick this up and run with it? How will it be perceived? On and on and on? And I would venture to say that if you don't have a love and respect and really in a sense, curiosity about people, you won't do as well on those second side of decisions. And that is a really important part of being a manager.
Speaker 1 00:12:27 And that's a challenge for a lot of individual contributors come outta technical jobs and they suddenly become leaders. The final one is what I call think like an economist. And this gets back down to the bottom line. The reason business exists in society is not because people need jobs and they need to make money. It's because business leaders and entrepreneurs and managers take something and they create value, and as a result of creating value, they create a profit and the profit goes to the employees, the shareholders and the various other stakeholders and the buyers, the consumers in society get a better product or service. That's really why business exists. It isn't here to make money for people and to make you rich, although it may do that or it may not, but it is a part of the economy, and that means that you as a leader, actually have a responsibility to make that economy work.
Speaker 1 00:13:21 What I mean is you can't just spend money and not expect to get a return and expect that to pay off. Now, a lot of private equity or venture backed companies do that, and they just spend money left and right and they continue to build things and hire people and grow and expect at some point in some future state to make a profit. Well, that may be the cycle that your company's in, but honestly, that's not what good leaders do. Good leaders think about the economics. How can we do this more cost effectively than our competitors? How can we make a profit at this? Where are the high degrees of margin in our business? Where are the low degrees of margin? Should we outsource this because it is not part of our capabilities and we would actually be more cost effective if we spent our time and money where we do add value versus where we don't add value?
Speaker 1 00:14:08 Should we centralize and streamline and reduce the cost of this group because it'll give us money to work on that group? Should we sell to customers that need our product more heavily and are willing to pay more because they see more value for it? Those are economic decisions. They're not just simple p and l, look at the budget and meet it decisions. They're really thinking about your little group or your department or your product. As a little economy and economies thrive when people are making money and there's excess capital for reinvestment and the business or the economy is growing. You know this. You read in the paper every day, well, that's part of your job as a manager too. Now we're gonna do a lot more on all of these topics. Even though we do spend most of our time working on HR and business of managing people and managing the HR function, I think being a leader is an important part of your job and is an important part of you helping the organization succeed.
Speaker 1 00:15:03 So let me go back through them again. Number one, respect and believe in the power of individuals. Number two, have a we versus I mentality and operate with a moral compass. Number three, respect people and be humble, generate and live with humility. Number four is inspiration. Create energy. Find a way to set a direction and get people excited about what you're doing. Number five is to make decisions. Have a framework for making decisions and be comfortable making decisions. Number six, consider all the stakeholders in your decisions in your organization. Many stakeholders who others may not have thought about. Number seven is to honor and embrace and be comfortable with technology. Number eight, love and study and understand people. Number nine, think like an economist. Make sure you're thinking about the money and the profitability and the return. Maybe the final thing that I want to add is to have an abundance mindset.
Speaker 1 00:16:08 Many years in my career, I've worked for companies that are in highly competitive markets, and if you're in a good market, it's gonna be competitive. And that's why business is kind of fun. If you don't like competition, then don't work in business, but you have to have an abundance mentality. If you find yourself chasing the competition, if you find yourself overly focused on how to win deals over somebody else, you've actually lost your way. You have to think constantly about climbing up the value curve of the business you're in and meeting greater and greater needs of the customers you serve. And yes, there will be competition. Yes, there will be market share issues. Yes, there will be times when it feels like the market's big enough, but it's an abundant world and you can create markets without having to take away business from somebody else. And so I'll leave you with that as maybe the final. I hope this EdCast was interesting. This is a big topic for me. I think about management and leadership all the time, and I look forward to your feedback. Thank you.
