George Borst - Bedrock

ExcellenceL E A D E R S H I PTHE MAGAZINE OF LEADERSHIP DEVELOPMENT, MANAGERIAL EFFECTIVENESS, AND ORGANIZATIONAL PRODUCTIVITYJANUARY 2009This issue sponsored byMarshallGoldsmithBeinga LeaderGary HamelLeadership ConsultantAlignCore ValuesInterview withGeorge BorstMaster Innovation“Leadership Excellence is an exceptionalway to learn and then apply the best andlatest ideas in the field of leadership.”—WARREN BENNIS, AUTHOR ANDUSC PROFESSOR OF MANAGEMENTw w w . L e a d e r E x c e l . c o m

ExcellenceL E A D E R S H I PTHE MAGAZINE OF LEADERSHIP DEVELOPMENT, MANAGERIAL EFFECTIVENESS, AND ORGANIZATIONAL PRODUCTIVITYVOL. 26 NO. 1 JANUARY 2009Best and WorstLeadersWe sometimes forget thatall three pigs were proactiveand enterprising. Allbuilt shelter and hadsome provision. But onlyPractical Pig’s brickbuilt-to-last structurestood the test of timewhen good times endedand recession set in.KEN SHELTONBest and Worst LeadersWe need to be clear aboutauthentic leadership. . . . . 2GARY HAMELInnovation MastersOld dogs really canlearn new tricks . . . . . . . . 3MARTHA CARLSONWomen LeadersThey tend to embodyfour traits. . . . . . . . . . . . . .4JIM COLLINSAlign Action and ValuesPut some teeth intoyour statements . . . . . . . . 5A.G. LAFLEYInnovationYou can change the gameusing IQ and EQ. . . . . . . .6ALICIA BASSUK ANDMARSHALL GOLDSMITHMeaning at WorkAdd both primary andsecondary factors. . . . . . . .7KEVIN CASHMANBeing a LeaderWith self-awareness yougain executive presence . .8JIM BRAMANTE ANDLAWRENCE OWENMaking Change WorkLearn from those who areextremely successful. . . . . 9DON SCHMINCKEStrategic PlanningDelusionFour common dangersthreaten your ascent. . . . 10MICHAEL T. KANAZAWADoing More On LessYou can now generatedouble-digit results. . . . .11MICHAEL WINSTONAntitrust SuitsMany “suits” or so-calledleaders destroy trust . . . .12DEBORAH GARAND ANDJUDITH GLASERLeadership IntegrityYou need to hardwire itinto your culture. . . . . . . 13TOM GRIFFINGreat LeadersLink all learningto performance. . . . . . . . 14STEPHEN M. R. COVEYBuilding TrustEmulate the behaviorsof high-trust leaders . . . .15WILLIAM A. COHENLeadership LawsLearn from Drucker’sfavorite book . . . . . . . . . .16BILL BIRNBAUMTough TimesFocus on your keysuccess factors. . . . . . . . . 17BOB SCHWIETERMANSkip the MirrorLook to others to learnmore about yourself . . . .17LANCE SECRETANMoral CourageYou need it to makebreakthrough results. . . .18GEORGE BORSTAuthentic LeadershipBuild relationships of trustwith constituents. . . . . . .19

E . D . I . T . O . R’S N . O . T . EBest and Worst LeadersThe differences can be like night and day.by Ken SheltonRECENTLY, I WAS ASKED BYMissy Smith of PublishingExecutive to answer somequestions about leadership.Why and how did you get involved inleadership? In 1983, I was recognized asEditor of the Year in higher education andwas fired for it. Out of work and tired ofpoor leadership, I decided to start LeadershipExcellence, in partnership with the topthought leaders of the day.Why is good leadership important? Reador watch the news. Bad leaders create havoc,waste, corruption, loss, crises, and in extremecases devastation and death. In contrast, goodleaders create sustained work and benefits.The difference between them can be as wideand deep as the Grand Canyon; their resultsas measured in profits or losses can soar intothe billions; their relationships as measuredin trust and tenure range from high and lifelongto low and tenuous.What characteristics make for a goodleader? I’ve written extensively on this topicin my books. However, I’m not fond of listing“Boy Scout” virtues (I’ve known toomany “scout” leaders who mouth such platitudesand then abuse people). Good leaders,above all, are consistent, reliable, responsible,open, direct. They do what they say; andhow and why they get results matter asmuch to them and what, who and when.What actions or duties are required of aleader? They are duty-bound to see a desired(better) future and engage people in creatingit. To treat people with respect. To cultivatetrust. To keep focused on what matters most.And when the work is done, to have fun andshare the recognition and rewards.If you’re a top executive, why do you needto demonstrate strong leadership skills?Otherwise, you won’t have a company. Ifyou can’t lead people and manageresources, you go out of business. Sadly,many so-called leaders and managers todayBEST LEADERSBarack Obama, president electAlan Lafley, CEO, P&GAnn Mulcahey, CEO, XeroxJonathan Schwartz, CEO, SunMicrosystemsJohn Rooney CEO, U.S. CellularSteve Jobs, CEO, AppleWarren Buffet, Berkshire HathawayJeffrey R. Immelt, CEO, GEEric E. Schmidt, CEO, GoogleFred W. Smith, President, FedExWilliam C. Weldon, CEO, J&Jhave sold out. They no longer operate asself-sustaining, independent entities; hence,they lose their voice and viability—andeven lose a customer orientation.How can a strong leader guide his or hercompany during rough times? First, be astransparent as possible, treating people asresponsible adults who share in the problemand solution. Show and tell people what’s atstake (survival, life as we know it, everythingwe hold near and dear). Present the facts.Invite their energy and ideas. “Strong” leadersoften appear “soft” on people, hard on theproblem. They break down silos, entitlementmindsets, us-vs.-them thinking, inequities,and blame games. Rough times often causethem to share ownership.What happens when good leadership islacking? The culture is soon characterized bypolitics, favoritism, cronyism, nepotism, chaos,corruption, egotism, depression, dependency,boredom, mediocrity, low engagement, victimmindset. Good leaders often bring energy,excitement, optimism, hope, vision, direction,and action to situations. They restore trustand open communication. They rebuild transparencyand credibility with all constituents.What advice do you have for people whowork in a leadership role? Huddle up. Openthe books. Share the outlook. Address thechallenges. Set the new direction. Invite participation.Gain buy-in. Share the sacrifice.Recognize and reward the right people. Sendthe right signals. Communicate more. Connectwith key employees and customers regularly.Set high standards and goals. Focus on executionexcellence in every role. Measure afew key success factors weekly and make people’sperformance visible. Keep recruitingand upgrading the team. Go for what constitutesa meaningful win to your people.List of Best and WorstIn our list of 2008 Best and Worst Leaders,we made selections based on this criteria:track record, decisions and actions, testsand standards, responsibility and accountability,relationships, and results. LEGary C. Kelly, CEO, Southwest AirJim Sinegal, CEO, CostcoBrian Walker, CEO, Herman MillerD. Scott Davis, CEO, UPSJohn T. Chambers, CEO, Cisco SysGeorge W. Buckley, CEO, 3MDanny Wegman, CEO, WegmansJames D. Weddle, ManagingPartner, Edward JonesArthur D. Levinson, CEO, GenetechIrwin M. Jacobs, CEO, QualcommLou Gentine, CEO,Sargento CheeseLakshmi Mittal, CEO, Arcelor MittalArthur D. Levinson, CEO, GenetechVolume 26 Issue 1Leadership Excellence (ISSN 8756-2308) ispublished monthly by Executive ExcellencePublishing, LLC (dba Leadership Excellence),1806 North 1120 West, Provo, UT 84604.Editorial Purpose:Our mission is to promote personal and organizationalleadership based on constructive values,sound ethics, and timeless principles.Basic Annual Rate:US $129 one year (12 issues)US $219 two years (24 issues)Canada add US $30 postage per year.All other non-U.S. add US $70 per year.Corporate Bulk Rates (to same address)US $190 each per year for 5 to 25US $99 each per year for 26 and up* Ask about logo and custom editions andforeign bulk rates.Article Reprints:For reprints of 100 or more, please contact theeditorial department at 801-375-4060 or emailcustserv@eep.com. Back Issues: (print) US$25.00. Permission PDF US: $50.Internet Address: www.LeaderExcel.comSubmissions & Correspondence:All correspondence, articles, letters, andrequests to reprint articles should be sent to:Editorial Department, Executive Excellence,1806 North 1120 West, Provo, Utah 84604;801-375-4060, or editorial@eep.com.Customer Service/Circulation:For information on products and services call1-877-250-1983 or email: custserv@eep.com.Executive Excellence Publishing:Ken Shelton, CEO, Editor-in-ChiefScott Spjut, Asst. EditorCraig Cheek, Circulation ManagerNancy Low, Marketing ManagerRob Kennedy, Business ManagerGeoff Pace, SalesContributing Editors:Chip Bell, Warren Bennis, Dianna Booher,Kevin Cashman, Marshall Goldsmith, HowardGuttman, Jim Kouzes, Jim Loehr, Tom Peters,Norm SmallwoodThe table of contents art is a detail fromThree Little Pigs (image cropped) © ScottGustafson, and is courtesy of the artist andart print publisher Greenwich Workshop.For additional information on artwork byScott Gustafson, please contact:Greenwich Workshop151 Main StreetSaymour, CT 064831-800-243-4246www.greenwichworkshop.comFull view of table of contents art.Copyright © 2009 Executive Excellence Publishing.No part of this publication may be reproduced ortransmitted without written permission from thepublisher. Quotations must be credited.WORST LEADERSDick Cheney, Vice PresidentDonald Rumsfeld, Sec. of Def.Angelo Mozilo, CEO, CountrywideGavin Newsom, Mayor, SF, CABen Bernanke, Fed Res ChairHenry Paulson. Sec of TreasuryRick Wagoner CEO, GMRobert Nardelli CEO, ChryslerAlan Mulally CEO, FordHenry McKinnell, CEO, PfizerBarney Frank, CongressmanChris Dodd, SenatorChristopher Cox, SEC ChairmanRod Blagojevich, Illinois Governor2 January 2009 Leadership Excellence

ing the best candidates for funding, Julietgains significant expertise in each field.Leaders have access to more information,knowledge, and expertise andwant to engage with multiple perspectives.This can be in the form of outsideexperts advising on key projects,collaboration with leaders in otherfields, conferences in which leadersshare their key lessons learned, jointpublications, and assignment of multipleresponsibilities over time.8. Exposure to others. Alex is a Directorat a hospitality firm. When he suggests anew location for a hotel, a team memberwho grew up there shares insights. Thegroup investigates the new perspective firstto understand it and then to integrate thedata to apply it effectively to future projects.Leaders are enriched by exposure topeople with different backgrounds andlifestyles. There is a stimulation andfullness that comes with working withleaders who were raised and live invarious communities and are active indifferent activities. True exposuremakes for more vigorous debate and amore curious environment.9. Public engagement. Isabella is theeditor of a magazine. She is in the finalstages of writing her second book. In theQ&A portion of her talk, a conferenceattendee asks a provocative question thatpushes her ideas in a new direction.Something extraordinary happenswhen a leader shares her ideas in apublic forum and engages largegroups. Inevitably a new idea comesfrom someone in the audience, and theidea can then grow organically. It isstimulating and rewarding, and generatesenergy for rigorous thinking.Organizations that do not supportleaders who value secondary meaningfactors risk losing them and being unableto compete. In organizations thatsupport meaningful work experiences,the culture enables more of them.These secondary meaning factors selfperpetuateand attract and retain likeminded,meaning-seeking leaders.Companies that provide maximumsecondary meaning factors foster culturesin which loyalty—a tertiary meaningfactor—develops. Ultimately, findingmeaning at work is a question ofquality of life. Leaders realize that theyspend their most productive wakinghours at work, and that making thosehours meaningful is crucial.LEAlicia Bassuk is the author of Monday Morning LeadershipHandbook. E-mail alicia@ubicastrategy.com or visit www.ubicastrategy.com.Marshall Goldsmith is the co-founder of MarshallGoldsmith Partners. Visit www.MarshallGoldsmithLibrary.com.ACTION: Implement secondary meaning factors.ETHICSCHARACTERBeing a LeaderLead more with presence.by Kevin CashmanGOOGLE PLANS TOinvest one percentof its equity, profits, andemployee time in fighting climatechange, advancing the economy, andcreating warning systems for naturalor man-made disasters or pandemics.It might well be the greatest case studyever of leaders’ Being—delving deeplyinward to unearth new possibilities.Just how deep did Google go? Teammembers organized twice-weekly meditationsessions in their Mountain View,California headquarters with guest visitsfrom Tibetan monks and mind-scienceresearchers. Google.org directorLarry Brilliant is the same man who ledthe WHO’s effective smallpox immunizationcampaign on the recommendationof the guru he studied underwhile living in a monasteryin the Himalayas.Explaining why he hasmaintained his intensivestudy of self and its connectionto comparative religions,Dr. Brilliant said, “It’s theonly game in town. Why doanything else?”Meditation, prayer, andenjoying life’s simple pleasuresare more than just means to copewith the stress of the C-suite. Theytransform our state of awareness, helpsize up big issues, and lead to highimpactproblem solving—enhancingour drive for external success withawareness of deeper values.Benefits of Self-AwarenessIf leadership is the act of going beyondwhat is, it begins by going beyondwhat is within us. Our inner calmattracts others by communicating asense of comfort and thoughtful counsel.It translates into executive presence—a confidant demeanor that is not easilyshaken by external circumstances. Beingcentered equips us to deal withchange, enables us to refresh ourselvesand achieve more with less effort, andgives us the mix of energy and calmnesswe need to achieve better balance.Like flashes of intuitive insight,awareness of Being—this inner peace orspirit—comes to us in quiet moments—in the silence between our thoughts, thespace between problem and analysis.As we go within, the power of thoughtis greater. Our deeper thoughts havemore energy and power. As the mindsettles down, it becomes more orderly,more able to comprehend and to handlechallenges. We can go beyond theissues, combine seemingly unrelatedvariables, and come up with new solutionsor perspectives.If we want to do more, we need tobe more. As Emerson wrote, “We buthalf express ourselves, ashamed of thatdivine which each of us represents.”We can take more time to reflect and tobe. Since leaders lead by virtue of whothey are, we need to expand the depthof our character.Four Points of AwarenessIn leading with presence, keep thesefour points in mind:1. Take your own journey into Being.Find your own path to unfold Being.It’s your road, and only you can travelit and judge what vehicles will helpyou on your journey. Consider meditation,prayer, reflection, music, nature,exercise—whatever resonates with you.2. Resolve life challengesby going to a deeper level.Problems rarely are solvedon their own level. Learn togo to a deeper level to viewthings in a more comprehensiveway. As your mind settlesdown yet remains alert,you can better sort throughand organize your life.Experience the power ofuniquely open, relaxed moments whenthe complex becomes simple, and theunsolvable is solved.3. Learn to meditate properly. If youresist reflection or meditation, thenyour need to do so is probably great.Allow the resistance, but still spendtime to meditate. As you experience thebenefits, the resistance will subside.4. Integrate some reflection into yourlife. Commit to a lifestyle that valuesmore solitude, reflection, and meditation.Take some “Being Breaks” to getreacquainted with yourself. Enjoy thesolitude. Go on walks. Sort out yourpriorities. Experience the silence. Reducingthe noise and enjoying naturecan help you to settle down and reconnectwith yourself. Reflection is not anescape, but a process of preparing for amore dynamic, masterful life. LEKevin Cashman is senior partner and CEO advisor withKorn/Ferry Leadership and Talent Consulting and author ofLeadership From the Inside Out. Visit leadershipfromtheinsideout.com or e-mail kevin.cashman@kornferry.com.ACTION: Gain awareness to lead with presence.8 January 2009 Leadership Excellence

LEADERSHIPSTRATEGYStrategic Planning DelusionFour common dangers threaten yourby Don SchminckeTHOUSANDS OF CEOSvoice frustrationwith strategic planningefforts. It’s not that spending time onstrategic planning is bad, but whatshould executives do differently?An answer can be found in a uniquelab, the death zone—altitude above26,000 feet where lack of oxygen threatenslong-term survival. Here, climbersresemble executives. They live passionatelywhile confronting impossibleodds. Some are deeply humble, whileothers are psychotic narcissists. Theycome with all levels of competence,from naive wannabes to elite athletes.And when put to the test, climbersreact like executives: sometimes heroically,other times self-destructively.Remarkably, executives who createand execute great strategies in the faceof extreme challenges—high-altitudeleaders—walk a different path. Theysucceed by recognizing and survivingspecific dangers found at higher levels.Four DangersFour dangers threaten leaders whenthey engage in strategic planning:Fear of death. Last year at 26,500feet on K2, an experienced Sherpaslipped off the edge into the darkness.He would fall for several minutesbefore hitting the glacier below. Allthe climbers stopped as the fear ofdeath gripped them. This jeopardizedwhat could be a successful summit.The same happens in strategic planning.Unconscious anxiety about thedeath of a project, product line, salestarget, market, career, or strategic goalcauses executives to freeze. When thishappens, strategic breakthroughs arejeopardized as managers shirk greatdecisions, avoid taking risks, stop challengingeach other, and resist changes.High-altitude leaders free up strategicthinking by embracing death. Thisunleashes innovation versus preservingthe status quo, creates new opportunitiesversus resisting the inevitabledeath of a cherished product or market.Many leaders call it “dying beforebattle.” Companies facing bankruptcyascent.can experience the same effect—a freedomto take risks and pursue innovativestrategies. What decision is yourstrategy team avoiding? What longoverdue actions would they take todayif the company was really dying?Selfishness. At high altitudes, selfishnesskills people when new strategiesare needed to deal with injuries, equipmentmalfunction, limited resources,and threats of avalanche and weather.In strategic planning, selfishness killsnew ideas and covers problems as executiveslet personal agendas drive strategydevelopment. Then resources getmisallocated, decisions become watereddown, and commitment wanes.High-altitude leaders drive from afervor and zeal for achieving strategicresults that rises above selfishness.They inspire a higher passion in othersby creating a compelling saga andaligning people on strategic executionvia a shared drama. Passion is profit.When passions are greater than selfishagendas, creative strategy emerges. Isyour team driven by a passionate sagaor just empty words in a mission statement?Or are they just going throughperfunctory planning retreat activities?Tool seduction. In mountaineering,tool seduction endangers climbersevery time they dress in the latest gearbut apply the wrong techniques andbehaviors to the challenge. In theiroverconfidence (or naiveté), they endup lost on a storm-ravaged slope fordays while experienced climbers are atbase camp watching the weather.Facilitators packing the latest tools andprocesses for strategic planning bogdown progress and distract teamsfrom focusing on vital issues.Tool seduction detours the planningprocess from real strategic thinking intoa labyrinth of mechanical, analyticalprocesses. This explains why moststrategic plans aren’t strategic, but tactical(even though they have a “strategicplan” cover). Executives possessed bytool seduction confuse strategic planningwith analysis; contrary to KenichiOhmae’s observation that true strategylies beyond analysis—it exists in thedomain of intuition. Why do companieswho drive superior market performanceoften ignore industry expertanalysis and advice? Experts onlyknow what is already known. Your jobis to out-intuit what is known.High-altitude leaders aren’t seducedby tools, or anything that might diminishintuition. Do your planning team’stools support creative transformation ofyour beliefs, or distract you with fill-inthe-blank,analytical processes? Do yourtools enable you to act decisively, or clogyour shelves with interesting, but irrelevant,information? Avoiding tool seductionfuels team passion for the challengeahead instead of derailing the team withuseless meetings, lingo, and processes.Cowardice. Cowardice stops teamsfrom challenging the status quo, holdingeach other accountable, and exposingweaknesses. This danger happensas soon as planning team members aretoo afraid to confront previous violationsof accountability or take necessaryrisks with each other. It causesstrategy failures by stopping the essentialact needed for effective strategicplanning—telling the truth. Cowardiceeats truth. Lack of truth eats strategy.Initially telling the truth can upsetpeople, but good planning teams loveit—and it drives accountability to newlevels. The alternative of keeping thetruth at unspeakable levels only producescollateral damage—dead-weightideas and doomed projects. High-altitudeleaders bravely engage in thetruthful communication necessary forinnovating strategy. Does your teamseek the truth about a situation orchoose avoidance, denial, and silenceto avert possible discomfort, anger, orretribution? Do team members whisperabout issues outside the meeting?Being aware of dangers that emergein strategic planning helps you reachhigher summits in strategic thinkingand not slip into tactical distractions.The intuitive strategies that resultdrive higher market-share penetration,profitability, and commitment. LEDon Schmincke is a speaker and co-author of High AltitudeLeadership with Chris Warner. Visit www.HighAltitude-Leadership.com.ACTION: Avoid these four common dangers.10 January 2009 Leadership Excellence

MANAGEMENT STRATEGYDoing More On LessTurn big ideas into big results.accelerating results by concentratingresources on important initiatives.To generate breakthrough resultswith constrained resources, you needto ask, “Are we trying to get the mostor best out of our people?” You can’toptimize for both.by Michael T. KanazawaONE POPULAR BUTreviled phrase inbusiness is “do morewith less.” Your budgets are cut andstaff reduced, but the work to be doneremains the same. This is no solution.Once doing more with less referred toautomating tasks with IT solutions,reducing headcount, and increasingoperating throughput. However, it’sbecome a throwaway phrase thatallows leaders to dodge setting prioritiesand spread resources andinvestments thin. This results in poorexecution and undermines the abilityto turn big ideas into big results.On the margin, taking on a fewextra tasks to help in a resource-constrainedenvironment can be necessary.However, when not kept incheck, a lack of focus can result in corporateattention-deficit disorder: toomany projects and competing prioritiesexist, lots of new projects and initiativesget started, and nothing iscompleted. Resources becomestretched thin, no single effort hasenough attention and focus to drivereal impact, and the organizationbecomes gridlocked. As new strategicinitiatives and change efforts are layeredon top of overloaded systems,results suffer further. Thus, two thirdsof strategic change efforts fail toaccomplish their stated goals.Although revenue growth and executionof strategy are the top concernsof leaders, team members who aretold to just do more with less complainabout the lack of focus and priorities.Delusion of ‘More With Less’The idea of doing more with less isseductive because it seems to enableleaders to get more work out of peoplewithout giving up anything. However,there’s a limit to what these people candeliver with excellence.At one company, the executive teambecame frustrated with field leadersand their inability to get their teams toquickly execute programs deemed criticalto success. They called a managementteam meeting to review thesituation. When the meeting started,the VP of Operations placed a big boxof papers on the boardroom table andexplained it was all documents receivedin one month requiring action.Clearly nobody could implement allof the orders—much less read them all—in a month. Every manager was facedwith the choice of what to read, whatto ignore, and what to implement. Ifexecutives didn’t prioritize, the fieldmanagers had to, because they couldnot do it all. The point of many of theprograms was to drive consistent customerexperiences across the chain ofstores, but inconsistent follow-throughhad the opposite effect. More with lesshad gone beyond its limit of effectiveness,leaving a major gap betweentheir big ideas and desired big results.Power of ‘More On Less’In challenging conditions, you feelthe urge to reduce budgets, lay offemployees, and call on those whoremain to step up, work harder andlonger, and do “more with less.” Whenthese employees complain, you maythink that they would prefer to simplydo less work. However, they are callingon you to set priorities so they can stilldeliver their best work.The idea of doing “more on less” isto reduce the dispersion of tasks andinitiatives, focusing only on the mostcritical priorities, and then putting extraeffort against those. It is about doingmore work, not less, but on just a fewselect high-impact areas. This concentratesresources, aligns teams towards asmaller and common set of objectivesand initiatives, and allows teams todeliver breakthrough results faster.You might reduce your portfolio ofR&D projects to just 10 big ideas. Doingmore on less is not about reducingworkload or spending—it is aboutBe a ‘More On Less’ LeaderThe use of the phrase “more withless” as a substitute for making toughdecisions on priorities is a bad habit.We need a replacement idea—doing“more on less.” To make this ideawork, leaders must accept the responsibilityand risks of calling out truepriorities. Employees must also speakup when they are driven past thepoint of productive focus.What is often missing are the tiesbetween the strategy to high-priorityinitiatives to tactical commitments tobudgets to success metrics to personaljob responsibilities. When these elementsaren’t managed, they get dispersed,and focus becomes diffused.The key elements to managing a moreon-lessorganization are:• Confront reality: Take a critical lookat the business before starting thestrategy development process, includingexternal views and employeeviews, providing the fact base for makingdecisions on priorities• Focus the strategy: From all possiblegrowth ideas, select a critical few initiativeswith the highest potential impact.• Align: Align the executive team,operating plans, and budgets to supportfull execution on priority initiatives.• Engage: Engage all employees intranslating the strategy and top initiativesinto meaningful personal commitmentsto action at their level.• Execute: Establish regular reportingon a scorecard for the top initiatives,hold quarterly reviews to assess progress,ways to accelerate, and barriers.Tie the personal commitments into theperformance management systems.Generate Double-Digit ResultsBy following this approach, you cangenerate double-digit results in growingnew revenues, reducing costs, andimproving engagement. Maintainingfocus, clear priorities, and alignmentof resources requires consistent effort.Doing more on less unleashes excellencein execution and enables you toturn big ideas into big results. LEMichael T. Kanazawa is a coauthor of BIG Ideas to BIGResults: Remake and Recharge Your Company, Fast(FT Press) and CEO of Dissero Partners. Visitwww.bigideastobigresults.com and www.disseropartners.com.ACTION: Do more on less.Leadership Excellence January 2009 11

ETHICSCREDIBILITYAntitrust SuitsThey kill enterprises.by Michael WinstonTHERE HE IS, THECEO—expensivesuit, commandingsmile, persuasive communicator, compellingstory—standing up front,imploring our continued support. Themedia is wrong, we are told. We willrise again. In fact, we will be biggerand more profitable than before. Wewill be the “last firm standing.” Weare asked to wear tokens and symbolsof our undying loyalty to the cause.We see him again on TV, beinginterviewed, and his response is thesame: The industry is facing hugeheadwinds, but our company will befine. Yes, we have borrowed to thelimits of our credit. However, ourincomparable leadership, unmatchedbusiness model, and “valued-employees”will save the day. We have comethrough tougher challenges.But we know the truth. We listen tothe rhetoric, but the reality is far different.Something inside us has died. Thisdistortion proves what we have longknown—employees are not valued atall. We are pawns in a larger game. Themotivations at the top are not as stated,not meant to benefit our various constituents—shareholders,employees,and communities. They are selfish anddriven by greed. Our belief system hasbeen shattered by The Antitrust Suit.There was a time when peoplewould have walked through the gatesof hell for this individual. But the veilof this Wizard has been pierced. Walkbehind the curtain. There isn’t muchthere—all smoke, mirrors, and a litanyof “trust me” and “it will be fine.”We’re told by the Antitrust Suit tostick with him, and we’ll make millions.We’re told that those who havedone so before are wealthy now. Fewpeople still believe him. Over time, allrealize the truth. It is over. It is done.Credibility LostIf I were to pick the one characteristicessential to leadership it would becredibility—meaning that the leadersays what he is going to do, and doesit. The leader keeps his promises.Credibility is the soul of leadership.Credibility determines one’s perceivedand actual ability to lead. Credibilitycomes from the integrity that causesothers to place their trust in the leader.Integrity involves a reliability thatenables followers to know that theleader will, within reasonable boundaries,be predictable. A leader who isunpredictable will soon lose followers.Many executives, managers, andsupervisors fail in their leadershipresponsibilities because they lose credibility,either in a dramatic event or ina series of damaging actions, byputting their interests above the interestsof their constituents. One executiveput it well: “People don’t give youtheir trust; they only lend it to you.”An Oft-Told TaleI wish this tale were but of one loneinstitution. Alas, it’s a tale about many.Seven years ago, we were shockedwhen award-winning Enron turnedout to be little more than a cash-shreddingpyramid scheme. The crucial failingfor investors was Enron’s use ofopaque, “mark-to-market” accounting.The problem surfaces when the marketis uncertain or difficult to assess, andso assets are marked to a model, oftenbased on generous assumptions.In the end, we learned that Enron’saccounting was mark-to-fairy-tale, withthe company booking enormous gainsfrom assumed future profits on schemesthat sounded great, but had little chanceof producing anything besides headlines.The misbehavior of Enron’s KenLay and WorldCom’s Bernie Ebbers,gave us our many sweeping reforms.Why didn’t we learn our lessonsabout fantasy accounting after Enron?That scandal supposedly ushered in anera of corporate responsibility andaccountability. We all thought that itwould happen, but it didn’t. In fact,things actually got worse. Last year’sversion, the implosion of real estate,got downright ugly. Alas, this dream’s“income” wasn’t actually matched byreal cash flows, just bank loans—thisEnron-like “income” was all hot air.Many stocks have been decimated.The losses at those companies mostdirectly victimized by their own housing-bubbleineptitude—such as BearStearns and Fannie Mae—are easy tounderstand. But, the losses extend farbeyond that. These tales represent corporateculture (at its worst). And leaveus with chills down our spines at thehorror of the deceit and arrogance.Indeed, we’ve discovered manycompanies built on the sands of deceit,fraud, power, and greed.Dick Thornburgh, examiner in theWorldCom bankruptcy proceedings,says companies aren’t doing enough topromote accountability, transparency,and compliance—responsibilities thatusually fall on corporate directors, inhouseand outside counsel, and internaland external auditors. “Had gatekeepersof Enron, and WorldCom beenmore effective, shareholders would nothave suffered the huge losses.”After such scandals as Enron andWorldCom, Congress hastily passedthe Sarbanes-Oxley Act (SOX) to protectU.S. capital markets and shareholders.“While SOX may have increasedinvestor confidence in the short-term,ongoing compliance with its requirements,as well as the heavy finesimposed by the SEC, have provedextremely expensive for some companies,”said Michael Missal, lead counselto Thornburgh in the WorldCom case.The past is often prologue.Confidence in the disciplines in oureconomy is at historic lows. Clearly, westill lack disciplined governance onaccountability, transparency, and compliance.Other examples abound:• May 2008 marked the end for the 85-year-old financial powerhouse BearStearns. Problems appeared in July2007 after two of the company’s hedgefunds imploded. After months of heavywrite-downs due to the subprime mortgagecrisis, rumors swirled. In March2008, JP Morgan offered $2/share forthe company and in late May the fifthlargestinvestment bank was no more.• Arthur Andersen’s (1913 to 2002)downfall was its role as Enron’s auditor.In 2002, the firm surrendered itslicenses to practice as CPAs after beingfound guilty of criminal charges,resulting in the loss of 85,000 jobs.12 January 2009 Leadership Excellence

• Remember E.F. Hutton? “When E.F.Hutton talks, people listen,” chimed itsslogan. Well, people stopped listeningwhen E.F. Hutton & Co. was caughtcheck-kiting and money-laundering.• AIG and Lehman Brothers debaclesstill have people shaking their heads.Malfeasant practices continue tochoke our economic system. Wedeserve better—and we shoulddemand it of ourselves, and of those inwhom we place great trust and power.Two decades ago, James Kouzesand Barry Posner reported that themost essential element in successfulleadership was “honesty.” Also in thetop ten traits were “straightforward”and “fair-minded.” Clearly, someCEOs did not get the memo.What can we do to repair the erodingstandards of leadership? We mustturn up the heat on our leaders—andhold ourselves to the highest standards—outof faith that it’s the rightthing to do, not out of fear of legalconsequences. Let us model leadershipthat exudes these qualities:• The vision to spell out what we willdo for those who depend upon us.• The drive to share that vision withthose who share a stake in our success.• The courage to challenge the statusquo, stimulate change, and make decisionsthat move us forward.• The ability to inspire individualsand teams to action to achieve goals.• The foresight to empower people tolearn new skills and stretch capabilities.• The wisdom to translate knowledgeinto value-added performance.• The willingness to recognize accomplishmentsand celebrate successes.• The integrity to serve as examplesin actions that reinforce basic values.Implementing new strategy requiresleaders who can energize operations;inspire people; personify the purpose,values, culture, and character; inspirecommitment to the strategy and goals;and secure the allegiances required tomake any bold purpose succeed. Thebest leaders evoke trust. They matchtheir words with their deeds and keeptheir promises. They pass the true test ofleadership—translating their promisesand commitments into consistent, purposefulaction. Without character andintegrity, an organization is “built tofail.” As Edward R. Murrow said: “Tobe persuasive, we must be believable; to bebelievable, we must be credible; to be credible,we must be truthful.”LEMichael G. Winston has worked 25 years as a business leader,change agent, strategist, and leadership development officer forfive esteemed Fortune 50 companies. E-mail winstonmg@aol.com.ACTION: Stand up to the antitrust suits.ETHICSINTEGRITYLeadership IntegrityHardwire it into the culture.by Deborah Garand and Judith GlaserOF THE TOP 20 CHARACTERISTICS OFadmired leaders, integrity is selectedfirst 90 percent of the time. Integritymeans an uncompromising adherenceto a code of values and ethics. Integrityasks you to reach higher. Integrity isabout honor and about “doing goodover feeling good.” Integrity speaks toour ethical fiber, and our sense of whatis right for a company, society, andhumanity—not just what is right forme, the individual.Integrity challenges you to makesacrifices and to do the “right” thingwhen, in fact, it may stand in your wayof greater wealth, jeopardizeyour status, or riskyour career. Integrityrequires humility. Humbleleaders know that everyonehas a different approach,value system, and reasonfor doing what they do.Integrity seeks to understandall perspectives, andweigh consequences beforemaking a decision.Companies succeed or fail basedupon the integrity of its leaders andemployees. Integrity is the basis fortrust—the gauge through which weread and commit to action.Hardwire Integrity into the CultureYou can hardwire integrity into theculture in three ways:Conversations. Leaders must firsthave a conversation with themselves,asking themselves the hard questionsof personal accountability, grounded intruthfulness to oneself and all othersinvolved. Many executives becomeimbued with self-importance, narcissism,or over-evaluation of attributes orachievements. If we lead through ouractions, our conversations must ensurethat we “walk the talk.” We will theninspire others through our own example.We will care less about the preservationof self-image, impressive“bottom-lines,” pleasing the “street,”and looking good in the eyes of others.If we believe that we “walk into ourwords,” what are those words? If youlisted them today, would they reflectthe highest tenets of leadership? Thereis power in leaders who adhere totheir values. You feel that power in theconviction of their words and actions.They trust themselves. Through personalstrength and courage, trust isgrounded within the self-assuredknowledge of their ability to adhere totheir convictions. No one is given theright to impute this leader’s integrity.Leaders also need to expand conversationsacross all boundaries andseek honest perspectives concerninghow we live integrity through corporateresponsibility, accountability, andleadership direction.Transparency. Transparency—beingfree of all pretense and deceit—pavesthe way to open dialogue based upontrust in management and in the information.Good business is predicatedon solid principles. Businesses arecomprised of many interconnecteddepartments, each dependent upon theflow, accuracy, and transparency ofdisseminated information. Transparencyis essential when youare setting a new course ordesiring to improve productivityand profitability.One decision made by“shaving truth” or blatantdeceit begins small andthen snowballs. As moredecisions are made basedon the dishonest approach,the snowball gains speedand mass until it becomesunmanageable and systems begin tofail. Transparency keeps us honest.Candor. Candor means a dispositionto open-mindedness—a freedom frombias, prejudice, and malice. Candorenables us to listen receptively to otherperspectives while engaging in interactivedialogue. Dynamic leaders appreciatethe contribution of others. Theyleave their egos behind, harnessing thepower of being secure within themselveswhile promoting innovation,collaboration, and a heightened senseof “team.” Transparency affords thetrust, and candor fosters openness.By adhering to a personal code ofhonor, leaders can raise the bar forthemselves and for others.LEDeborah E. Garand is President of Integrity Integrations, speaker,and board member of The Women’s Congress. Visit www.integrityintegrations.com.Judith E. Glaser is CEO of BenchmarkCommunications, co-founder of the Creating WE Institute, andauthor of Creating WE and The DNA of Leadership. Visitwww.creatingwe.com and www.creatingweinstitute.com.ACTION: Lead with integrity.Leadership Excellence January 2009 13

LEADERSHIPCHARACTERGreat LeadersDevelop character in them.by Tom GriffinAS AN INFANTRY OFFIcerin the U.S.Army, I learned thislesson: Great leaders are born of strongcharacter—now the foundation of theleadership model at U.S. Cellular.Character separates good fromgreat leaders; and it’s what differentiatesand defines you. To succeed as aleader at U.S. Cellular, you have to bestrong of character, highly ethical, andauthentic. Our leadership development(LD) model is effective becauseit’s predicated on a specific set of principles,values, and behaviors that havewithstood the test of time.After 14 years at Texas Instruments,I took a position at SBC-Ameritech,where I met John E. Rooney, who eventuallybecame the president and CEOof U.S. Cellular. About 10 months later,I was offered a job at U.S. Cellular,where I helped put the dynamic organization(DO) into practice, whichstarts with effective leadership.Working with John Rooney and themanagement team, we develop programsthat impact strategic businessinitiatives and prepare people to beleaders. We are continually looking athow we can develop better leaders.U.S. Cellular is a place where learningand the business are harmonized.I’m involved in developing culture,fostering change and alignment, andcreating higher capability. U.S. Cellular,with 8,700 employees, employs a servant-leaderstrategy. We encourageleaders and associates to move beyondself-interest and embrace a more synergisticvision of high personal and teamperformance. Our leadership modelgrew organically, as each senior leadercontributed to its five tenets.At the heart of our model is whatwe call leader as self—being a leader ofhigh integrity and high character.Leadership starts and ends with self,so that’s our center point. To drive thepeople results, you’ve also got to bean extraordinary relationship builderand a great teacher. To drive the businessresults, you have to be a goodstrategist and a superior results driver.We have validated the componentsof the model at every level. Core competenciesand behaviors are set foreach of the five roles: leader as self,leader as teacher, leader as relationshipbuilder, leader as strategist, and leaderas results driver. This model was thenembedded into other strategic HRprocesses, such as performanceappraisal, talent review, and successionplanning, making it an operationalpriority, ensuring implementation,and creating accountability.We can’t empower until we createthe capability first, so our servantleaderphilosophy at its core is aboutcreating capability and then havingleaders lead from this perspective inevery interaction with a peer, associate,customer, supplier, or anybody else.Because learners crave dialogue andlearning often is the offshoot of discussion,we create a safe space for conversationby immersing leaders in fourdaylearning programs. We know thattransformation often happens throughsubstantive dialogue. The light maynot go on for me today or tomorrow,but it may the next day—not necessarilythrough the instructor but througha side conversation, peer coaching, ora guest speaker talking about theirpersonal experiences.With discussion comes the need forreflection. We make time for cogitation.In all of our work, people engagein active learning and have chances topractice what they learn, and thendemonstrate competence of that learning.A big part of our servant-leaderprogram is action reflection. Our leaderstake the time to engage in reflection.In all of our programs, we build intime for purposeful reflection. We be-lieve that meaningful reflection leadsto more purposeful action. We createways for people to dialogue, reflect onwhat they’re learning, and then decidehow this applies to them and whatthey can do differently as a result.The ideal of the learning organizationworks with our goal to become adynamic organization. If the leaders areeffective, the associates and customerswill be satisfied, and ultimately, thebusiness will be successful. As our CEOJohn Rooney says, “You can’t managethe results unless you manage the thingsthat go into producing those results.”The DO business model emphasizes valuesand principles, as well as leadershipskills. We need leaders who engage,teach, and motivate their people.Because of the close alignmentbetween the learning organization’sphilosophy and the company’s vision,I enjoy a close relationship with seniorofficers. We engage in powerful conversationswith our senior officers, andI get lots of direction from them abouttheir goals, needs, and wishes. Again,the first two components of the businessmodel are leadership effectivenessand associate satisfaction. To deliver onthat, I need and receive access to ourmost senior leaders.To measure how we’re doing, weconduct an annual Culture Survey,enabling associates to give feedback,and voice to the issues preventing customersatisfaction. The most successfulyear in terms of business results was2007, and it also was U.S. Cellular’shighest performance on the CultureSurvey. In that survey, 97 percent ofU.S. Cellular’s associates participated,and of those, 97 percent said, “I amproud of what we are accomplishing.”While we have all the financial measuresof any other telecom, we pay moreattention to two key measures that driveour success—the internal measure ofhealth, satisfaction, and vitality, theCulture Survey; and the external measureof customer satisfaction. We deploya third-party vendor to contact customersafter they’ve had an interactionwith U.S. Cellular, and we ask them toevaluate how effective that interactionwas. The CBI data and metrics indicatewhere we need to teach better and createmore capability in our associates.As we look to the future, we wantto institute more e-learning activities,improve the business model, and linklearning to performance.LETom Griffin is VP of organizational learning and chief teachingofficer at U.S. Cellular. Visit www.uscellular.com.ACTION: Link your learning to performance.14 January 2009 Leadership Excellence

LEADERSHIPTRUSTBuilding TrustHow the best leaders do it.by Stephen M. R. CoveyTRUST IS DECLININGeverywhere—inour personal relationshipsand in our culture and organizations.Only half of employees trusttheir senior managers and leaders,and only 28 percent believe CEOs area credible source of information.We are now experiencing a crisis oftrust and confidence in the financialmarkets. This compels us to ask: Isthere a measurable cost to low trust? Isthere a tangible benefit to high trust?And how can leaders build trust andreap the benefits of high trust?Most leaders don’t know how toquantify the costs of low trust or measurethe gains of high trust. For many,trust is intangible. They don’t knowhow to assess the trust level or how toimprove it. Yet, the costs of low trustare very real—and often staggering.One estimate put the cost of complyingwith federal rules and regulations—putin place due to lack oftrust—at $1.1 trillion (11 percent of thegross domestic product). The averageAmerican company loses 6 percent ofits annual revenue to fraudulent activity.We see similar effects for the otherdisguised low-trust “taxes” as well.When trust is low, in a company orrelationship, it places a hidden “tax” onevery transaction—every communication,interaction, strategy, and decisionis taxed, bringing speed down and drivingcosts up. Distrust doubles the costof doing business and triples the time ittakes to get things done!Leaders who are trustworthy andoperate with high trust experience theopposite of a tax—a “dividend” that islike a performance multiplier, enablingthem to succeed in their communications,interactions, and decisions, andto move with incredible speed. Hightrustcompanies outperform low-trustcompanies by 300 percent!The ability to create, grow, extend,and restore trust among stakeholders isthe critical competency of leadership.Fortunately, engendering trust is acompetency that can be learned andapplied. You can get good at it, measureit, improve it. You can’t be an effectiveleader without mutual trust. As WarrenBennis notes, “Leadership withoutmutual trust is a contradiction in terms.”How Can Leaders Build Trust?Job 1 of any leader is to inspire trust.Trust is confidence, born of characterand competence. Character includesyour integrity, motive, and intent.Competence includes your capabilities,skills, results, and track record.With the focus on ethics, the characterside of trust is now the price ofentry in the global economy. However,the differentiating (and often ignored)side of trust—competence—is equallyessential. You might think a person issincere, even honest, but you won’ttrust that person fully if he or shedoesn’t get results. And the opposite istrue. A person might have great skillsand talents and a good track record,but if he or she is not honest, youwon’t trust that person either.The best leaders frame trust in economicterms. In a low-trust culture,leaders can expect negative economicconsequences. Everything takes longerand costs more because of the stepspeople need to take to compensate forthe low trust. When these costs arecounted, leaders recognize how lowtrust becomes an economic matter.The dividends of high trust can alsobe quantified, enabling leaders tomake a compelling business case forbuilding trust, even making the buildingof trust an explicit objective. Likeany other goal, building trust shouldbe focused on, measured, and trackedfor improvement. It must be clear thattrust matters to managers and leaders,that it is the right thing to do, and thesmart economic thing to do. One wayto do this is to make an initial baselinemeasurement of trust, and then totrack improvements over time.The trust transformation starts withbuilding credibility at the personal level.The foundation of trust is your personalcredibility. Your reputation is a reflectionof your credibility, and it precedesyou in any interaction or negotiation.High credibility and a good reputationenable you to establish trust fast—speed goes up, cost goes down.I see four Cores of Credibility thatwork in tandem—Integrity, Intent,Capabilities, and Results. You can builda culture of high trust by clarifyingwhat constituents want and what youcan offer them. Then practice behaviorsthat build trust. Next, extend trust toyour organization. The combination ofthat credibility and behavior and alignmentresults in a culture of high trust.For example, Warren Buffett, thetrusted CEO of Berkshire Hathaway,completed an acquisition of McLaneDistribution (a $23 billion company)from Wal-Mart in record time. Thedeal was made with one two-hourmeeting and a handshake. In 30 days,it was completed. High trust yieldshigh speed and low cost.Behaviors of High-Trust LeadersEffective leaders use 13 behaviors tobuild and maintain trust: Talk straight,show respect, create transparency,right wrongs, show loyalty, deliverresults, get better, confront reality, clarifyexpectation, practice accountability,listen first, keep commitments, andextend trust first. When you adoptthese behaviors, you make depositsinto your “trust accounts.” However,these behaviors need to be balanced(i.e., talk straight needs to be balanced byshow respect). Any behavior, pushed tothe extreme, becomes a liability.You can always boost your self-trust(the confidence you have in yourself—in your ability to set and achieve goals,to keep commitments, to walk yourtalk), and your relationship trust (theability to create and increase the trustaccounts you have with others and toinspire trust in others).The job of a leader is to extend trustfirst—not a blind trust but a smart trustwith clear expectations and strongaccountability. Trust determines thequality of our relationships, communication,projects, ventures, services, andproducts. It changes the quality of presentmoments and alters the trajectoryand outcome of future moments. Nothingis as fast as the speed of trust. LEStephen M. R. Covey is the CEO of CoveyLink Worldwide801-756-2700 and the author of The Speed of Trust: The OneThing That Changes Everything.ACTION: Experience the speed of trust.Leadership Excellence January 2009 15

master the hard skills of your job aswell as the soft skills of interpersonalrelations. Interpersonal skills must be afocus of your leadership development.”Because most leaders believe theyhave strong interpersonal skills, theyneed to see an objective measure oftheir skills (often in the form of a multirateror 360-degree assessment). Afterthey complete a questionnaire aboutthemselves with input from colleagues,direct reports, and boss, they need tosee an evaluation of their interpersonalskills and behavioral preferences,showing strengths and weaknesses aswell as highlighting areas where theirself-ratings are different from thoseprovided by others. The report willidentify specific areas that can limit theleader’s interpersonal effectiveness andperformance. Areas that can be affectedby interpersonal shortcomings includethe person’s ability to establish rapport,give and receive feedback, communicate,or manage/delegate work assignmentseffectively.An objective report showing thatthe leader’s self-perception of theirabilities differs from others providesopportunity for improvement. Whilesome people will shrug off the data,most leaders find the information to beeye-opening and use it as a launchingpad for personal improvement. It createsa highly “teachable moment.”Leaders recognize they’re not beingas effective with others as they want.One-on-one coaching or workshoptraining programs are effective ways toexplore interpersonal effectivenessissues and build specific skills.You can improve your interpersonalskills by identifying the behavioralpreferences of others and work in away that makes them comfortable.Take these four basic steps:1. Know yourself—understand yourbehavioral preferences.2. Control yourself—don’t let thosepreferences dominate interactions.3. Know others—note the behavioralpreferences of your key relationships.4. Do something for others—accommodatepreferences of key relationships.You can easily learn these skills andquickly see results. Often, just makingan effort to work better with othersincreases productivity.Interpersonal skills never becomeobsolete. Apply the principles of effectiverelationships to keep moving tonext levels of leadership.LEBob Schwieterman is general manager of The TRACOM Group’sPerformance Consulting Division. Call 303-265-6143 or visitwww.tracomcorp.com.ACTION: Improve your interpersonal skills.LEADERSHIPCOURAGEMoral CourageIt’s the hallmark of leadership.by Lance SecretanCOURAGE IS MENTALor moral strength toventure, persevere, andwithstand danger, fear, or difficulty.Inspirational leaders embody mental,moral, and spiritual courage. Followersabhor cowards and love leaderswith mettle—it’s that simple. Andsmart leaders do what works.We use the word courage to describefirefighters, police, and paramedics attheir best and also to describe whistleblowers who expose corruption. In thefirst instance, a person’s life is in dangerbecause of the physical risks; in thesecond case, people arerisking their jobs by tellingthe truth—one is physicallycourageous, and the otheris morally courageous.In corporate life, we areinfrequently required todisplay physical courage;but we are required to displaymoral courage daily.Breakthroughs cannot bemade without enormouseffort sustained over time. In everyfield, entrenched, traditional beliefspresent insurmountable hurdles toachieving the remarkable. This thinkingis old-fashioned and unnecessary.For some, skiing is dangerous andfrightening. As an expert teacher of skiing,I run a Leadership Summit programin which we enable skiers of intermediateability to overcome their fears sothat they can ski moguls (bumps) intheir first half day and double blackdiamond runs (experts only) by the endof the day. Many teachers say this isimpossible, but we do it all the time. Wedo this because we use skiing as ametaphor—as it goes on the mountain,so it goes at work. The U.S. ski industryincludes 600 resorts, 29,000 professionalski instructors, and 26,000 ski patrollers,all of whom have a vested interest inkeeping a skier or snowboarder on aslow learning track. It helps maintain acontinuing flow of repeat business, butit doesn’t lead to rapid, radical breakthroughsin skiing ability.The “business” of leadership has thesame inbuilt inertia—hundreds of thousandsof consultants, academics, writersfor learned journals, training executives,and coaches have a similar vested interestin dragging out the process of leadershipdevelopment. As an expertteacher on leadership and inspiration, Ihelp organizations and individualsachieve the same rapid, radical breakthroughsin a remarkably short periodof time—just as we do in skiing. Thesecret to making a breakthrough in leadershipor skiing is the same—courageand trust. It amazes me that so manyskiers remain average or mediocre yearafter year, when they do not need to be.I’m equally amazed to see the samething happen in organizations.Perhaps we’re losing the strength ofour courage muscles. In choosing howwe lead, we exercise self-imposed limitations.Yet people regularly achievebreakthroughs in their experiences—the meaning and fulfillment of theirwork, the results they inspire from people,the fortunes they make from doingwhat they love—and we all have thepower to do the same. AsBuckminster Fuller said, wemust “dare to be naïve.”Each winter, leadersfrom around the world visitwith me in Colorado tolearn how to ski and leadbetter. Both can be achievedin a fraction of the time weexpect—if we have passion,willingness to learn andchange, a desire to improve,and a belief that there are no limits. Wemight call this courage.In teaching and leading others, youmust earn and build trusting relationshipswith followers. Trust creates aloving space in which experimentationand challenge can occur, in which youcan let go of “certainties.” This leads tochange—and in change there is power.It takes little courage to cling to thestillness of the status quo. Movementand change, which involves letting goof the familiar while embracing thenew, require courage.As Maya Angelou put it: “One isn’tnecessarily born with courage, but oneis born with potential. Without courage,we cannot practice any other virtuewith consistency. We can’t be kind, true,merciful, generous, or honest.”Paradoxically, safety comes from theadventurous and the exciting, not fromthe failing systems of the past. In thisway, we sacrifice what we are for whatwe can become.LELance Secretan is an expert in leadership development andauthor of ONE: The Art and Practice of ConsciousLeadership. Visit www.Secretan.com.ACTION: Cultivate the courage to change.18 January 2008 Leadership Excellence

LEADER OF THE MONTHGEORGE BORSTAuthentic LeadershipBuild strong relationships of trust.Interview withGeorge BorstWhen did ToyotaFinancialServices start?Our marketing name is ToyotaFinancial Services, but we started as afinancial services company in May1983 as Toyota Motor Credit Corp.Since then, we have grown from eightassociates to 3,000 with $85 billion inmanaged assets. TFS is part of thefinancial services operations for ToyotaFinancial Services Corp. (TFSC), a subsidiaryof Toyota Motor Corp.Why have you enjoyed such success?I give most of the credit to theToyota products. Our great productsadd 15 points to my IQ. As long as Iknow that I’m borrowing those 15points, I’m okay. When leaders thinkthat any good fortune is all because ofthem, they get in trouble. So, Toyota hashad a great run—both on the productside and sales side. In the finance company,we had two choices. We couldjust grow with Toyota, which was arobust growth rate, or we could seekways to add incremental value.How do you add value?One of our strategic goals is to increaseToyota loyalty. One statistic welike is that if you buy a Toyota andfinance with us (TFS) versus payingcash or financing with a bank, there isa 50 percent increase in the odds thatyou’ll go back to the Toyota dealer.How can you add that much value?We keep in touch with customers.We tell them what’s going on at Toyotain our monthly billing statements. Ifthey are leasing the vehicle, four or fivemonths before the lease expires we callthem and tell them what their optionsare. By staying in close contact withour customer, we steer them back intoanother Toyota or Lexus.sion adds value by identifying whoshould be buying Toyota and targetingthe message to attract these people. Onthe finance side, we add value by boostingcustomer loyalty. We bring peopleback to the Toyota/Lexus dealers moreoften. All that we do—getting into thecredit card business for redemption andpoints, or getting into lease retention orretail retention programs, or personalizingthe billing statements—we are tryingto develop more loyalty. We alsoadd value through the funding side.We’re now one of the few AAA namesleft in America. So even in this difficultfunding market, we are able to accessfunds and make credit available.How did you avoid the “lendron”mess of the home loaners?We’re not immune from that mess.Our credit losses and residual valuelosses from the declining used carmarket and off-lease vehicles havegone up as well. But the big issue facingthe market in recent months iscredit availability. We’ve seen so manybanks exit from the retail and leaseauto finance business. We’ve seenGMAC and Ford cut way back on leasing.GMAC announced that they’reonly going to approve FICO scoresover 700. And yet in the first sixmonths of this fiscal year, despiteToyota sales being down 15 percent,our absolute volume is up 58,000 contracts.That’s because we have the abilityto fund in a tight credit market.Why is that?Any investor in this marketplace isvery nervous. Whether you’re a pensionfund manager or an individualinvestor, everybody is nervous. Andwhen people are nervous, they eithersit on the sideline, or there is, whatSo, in effect, you change the Toyotavalue proposition?Yes, but again, it starts with greatproducts. The engineers, designers,and assembly workers add value byproducing a quality car. The sales divitheycall in the investment world, a“flight to quality.” We’re among only aselect few companies that have thehighest possible short- and long-termcredit ratings in corporate America thataccess the funding market daily. So inthis difficult credit environment, weare still able to access funds. It’s not ascheap as it was a few months ago.Why the dramatic fallout in funds?There are two reasons.First, the banks have backed off onauto loans because their losses in theAsset-Backed mortgage market havedrained their capital. So their leverageratio has gone way out of whack. Theycan’t grow the way they want to grow.Secondly, for many of our competitors,their primary source of funding isthe asset-backed market. And withwhat happened in mortgages, theasset-backed security market for carsand credit cards virtually disappeared.So where GMAC or Ford or somewell-known banks would do an ABSdeal of $1 billion, that market suddenlydisappeared, and they didn’t havenew assets they could draw down on.So they weren’t able to access funds;hence, they had to either tighten theircredit standards or reduce lending, orboth. Some chose to get out of leasing.ABS is the most expensive form offunding. And since we’re an AAAratedorganization, we can do unsecuredterm lending much cheaper. So,we’ve gone to a lot of smaller deals.We found that if we could customizeour funding to the needs of insurancecompanies or pension fund managers,we could get much better rates. So thatkeeps our funding costs low; and inthis credit market, we can still fund,just not as easily or cheaply.What makes you effective as a leader?I try to build relationships of trustacross borders and boundaries, departmentsand divisions. Toyota encouragesbuilding these relationships. SoI’m constantly communicating with allentities within the Toyota family andwith the dealer organization. I participatein many of their meetings, andtalk to their people about where we areon funding and credit issues. I’m alsopart of the Toyota North AmericanPresidents Organization. All the presidentsmeet every two months. I canassure you that everybody is wellaware of our issues, challenges, andgoals—and I’m well aware of theirs.Building relationships of trust formsthe bedrock of Toyota. Toyota is, afterall, a Japanese company. Some U.S.Leadership Excellence January 2009 19

vendors don’t understand how to dobusiness with Japanese companiesbecause in a typical vendor/manufacturerrelationship, you go in, makeyour presentation, and the lowest priceor best value proposition wins. ButToyota wants to get to know you for awhile before you win any business. Somany people give up, and they say, “Ican’t afford to keep traveling to Japanwithout walking away with an order.”But once you get inside that circle oftrust, good things happen fast. That’swhy Toyota has such great relationshipswith its suppliers—we wantthem to be successful too.Is anything lost in translation?I don’t believe we have bad leadershipin America; however, the styleand approaches are very different—and both can work well. The Toyotaapproach is one of consensus management.Toyota invests the time up frontto get everybody’s opinion and understanding—evenpeople who are onlytangentially involved weigh in at thebeginning. Initially this process candrive you crazy because it’s so timeconsuming,and so many people haveso many opinions. But once the decisionis made, the execution is usuallyexceptional. In a sense, Toyota tries tocreate chaos at the start of the project;other companies can get quickerapprovals or make faster decisions,but then other departments and organizationsweigh in and say, “You didnot think about this” or “This impactsus this way.” Thus, they create chaosafter the launch. I think that differenceaccounts for some of our success.Are you a convert to Japanese style?I respect it and understand it, and Itry to be a blend of both Japanese andAmerican styles. Toyota puts emphasison the details, and I’ve learned thereis dignity in the details. I’ve takensome Gallup strength tests and findthat my strengths fall in the area ofstrategy and execution. One thing Ilearned early is you can have thegreatest strategy in the world andwant it done tomorrow. But if youdon’t respect the details—if you don’tlet the people who are strong in analyticshave the time and the space andget out of their face so they can dotheir jobs—execution will suffer. Ithink one of the key leadership traitsis self-awareness. I recognize this impatiencein myself, and force myself tostep away and let the analytical piececome together. Sometimes it drives mecrazy, but it serves me well. When Imake mistakes, I tend to not give othersenough time to do their analysis.How do you gauge who to involve andwhat to reveal?I believe in involvement, transparency,and authentic communication. Itend to err on the side of revealing toomuch rather than try to hide things. Ithink people want to know who theirleader is. I think it’s okay for leaders toshow some vulnerability, to show thatthey’re human. People want to knowthere is a real person there. If leadershave enough self-confidence that theycan show vulnerability and show whatthey’re learning and where they’vecome from, people respond favorably.How do you communicate authenticity?Leaders often announce the strategyor plan and then assumeeverybody understands itand is committed to doingit. You have to repeat themessage early and often. Iget out of the office, visitmy associates, and buildrelationships and a reputation.The big mistake thatsome leaders make is creatinga “podium persona”that is not the same as whothey really are. People know whensomebody is giving them spin.Does the feedback/feedforward processspur improvement?Feedback is vital, and my coachMarshall Goldmith’s “feedforward”process facilitates self-awareness andgrowth. Five years ago, I went back toschool to pursue a master’s degree inleadership. One demand of leadershipis building a constituency by extendingyourself into many other parts ofthe organization and building awarenessof what you’re doing.For example, recently I learned thatour Remarketing Managers were meeting45 miles away in Laguna Niguel. Inthis credit crunch and collection environmentand funding crisis, I didn’twant to travel an hour and a half eachway in LA traffic. But I figured, “This isimportant; these men and womencome in from around the country.” So,I went there and told them where weare as a company, what our profit challengesare, what we are doing to cutexpenses. Then, I said, “I invested thistime because what I need is unfilteredfeedback. I need you to tell me what’sgoing on, what we’re doing right, andwhat we’re doing wrong. And I don’tcare if what you ask me is politicallyincorrect—I need to know what’s onyour mind.” What I learned made thetrip more than worthwhile.How do you build trust?When you seek feedback consistently,you build a balance sheet, an emotionalbank account, with the associates.You build up your asset side so whentough times come you can add to theliability side and still retain some networth. If you don’t build trust withpeople and you’re not authentic andthey don’t know who you are, you canquickly become bankrupt.Quarterly, I host an ice cream social.We randomly pick 15 people who respondto an invitation, get them in theroom, and cite two rules: You can’t quoteyour boss by name, and you can’t bad-mouthanybody after the meeting. You can say anythingyou want about me.I’m amazed at what I getout of this. As soon as peopleknow that it’s safe tospeak up, they will tell youwhat is on their minds. Ifyou can stay connected,you can look at the businessfrom their side of thehouse. All of our associateswant Toyota to do well, butyou still have to answerthese two questions: “What’s in it forme?” and “How does this impact me?”By addressing those questions, you goa long way in getting collaboration,alignment, and consensus.What advice do you give to leaders?In tough times, you can’t over-communicate.People want to know whatis going on, and they want to be partof the solution. We all know what thechallenges are. And if you can clearlycommunicate this in a transparent andauthentic way, people will want towork with you to get to the solution.In this market, people are nervousabout benefits being cut or losing theirjobs or bonuses. But if you can clearlycommunicate what needs to be done,you keep people focused on helping allof us get there. People feel much betterwhen they’re working toward a solution.Action is the antidote for anxiety.When they are participating in thesolution, they feel better about themselvesand about their contribution. Ifwe as leaders can motivate and coachpeople to make discretionary contributions,we’ll get to better solutions ofour problems much faster.LEGeorge Borst is CEO of Toyota Financial Services. Visitwww.toyotafinancial.com.ACTION: Show transparency and authenticity.20 January 2009 Leadership Excellence

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