Issue 9 (emailed version), Weds 27 September, 2000
Made in New Zealand - twice winners of the America's Cup

“I'm on the board of the New Zealand Rugby Football Union team, the All Blacks. I know for a fact that there is no opposition as intimidating as your opponent's legacy. When you play against the ABs, you're going up against a team that has a 74% win record over the past 104 years, the most sensational winning percentage in all of global sport. You're not just playing against the players on the current team – you're playing against all of the guys who ever put on that jersey.

“We've just done a $100 million deal with Adidas to sponsor the All Blacks. Adidas is doing the deal not because it wants to be associated with rugby but because using the All Blacks builds its brand value by being associated with the team's legacy, its tradition, and its history. Adidas wants to be about authentic, competitive warriors.

“These days, if you don't have a past, then you need to create your own legends and myths very fast. We live in Internet years, so your culture can become a legendary, mythical thing in six months.”
Kevin Roberts, Kiwi CEO of Saatchi & Saatchi
From Trust in the Future by Alan M. Webber
in Fast Company no 38, September 2000

Welcome to issue nine of EDGE FIRST, an email magazine dedicated to making you a better leader, by providing:
- provocative thinking about what it means to be a leader
- the tools, techniques and best-practices that drive leadership improvement

In this issue
Why should anyone be led by you? - key leadership skills
Narrative - John Kotter talks to MCB's Sarah Powell
Quick case study - to grow your company, leverage your leaders
Pointers - mapping strategy, from the people who brought you the balanced scorecard; disruptive innovation in health care.
Resources - identifying and cultivating tomorrow's leaders, from APQC; four articles of the month, from MCB Press.

To access Portable Document Format (.pdf) files you'll need Adobe'sฎ free Acrobatฎ Reader.

Start
In the Sep-Oct 2000 Harvard Business Review, authors Robert Goffee and Gareth Jones asked 'Why should anyone be led by you?' Great way to still a room full of executives, apparently. All you can hear are the knees knocking. Why? Nothing happens in business without followers, and followers in these empowered times are hard to find.

So if you're a leader, or aspire to be (or – hey, go easy on yourself – are failing to be) you'd better know what it takes to lead effectively. Most don't, Goffee and Jones say, and who can blame them. For one thing, they're drowning in good advice – last year, more than 2,000 books on leadership were published.

Sure, everyone knows leaders need vision, energy, authority and strategic direction, they say, but we've discovered that inspirational leaders also share four unexpected qualities:

They selectively show their weaknesses – by revealing their humanity leaders inspire trust and collaboration. Owning up to faults and failings means your enemies are less likely to invent worse ones. But beware – don't expose anything that will be seen as a fatal flaw. How about (these guys are cynics) exposing a weakness that may also be a strength – like, you're a workaholic? Be true tho – making things up will sink your credibility. Porkies always find you out.

They rely heavily on intuition for timing and the best course of action – collecting and interpreting soft data, inspirational leaders can sniff out the signals in the environment and sense what's going on without having anything spelled out for them. Franz Humer, Roche CEO and one-time tour guide who learned his skills while surviving solely on tips; Ray van Shaik, Heineken CEO in the early 90s who could read major shareholder Freddie Heineken like a book, are two examples. Just don't get carried away – always test your intuition with a trusted advisor or team member.

They manage with tough empathy – the soft stuff is hard, especially if it's not the real thing, Goffee and Jones say, and there's altogether too much hype about interpersonal-skills training and 'concern' for others. Inspirational leaders practice tough empathy – giving people what they need, not what they want. The Marine Corps, McKinsey – grow or go. But it's tough to be tough, and choosing between the best interests of the team and the corporation (or the team and the customer) is not always an easy call. But tough also means committed, and people respect commitment and authenticity.

They reveal their differences – and capitalise on what's unique about themselves. It may be as obvious as dress, style or an affectation, or a subtle as class, culture or nationality. In your face, or rarely seen. Difference sets leaders apart.

All four qualities are necessary for inspirational leadership, but must be a part of his or her personality. That's why the leadership cook books fail, Goffee and Jones say. Leadership can't be copied, it has to be learned, and it's situational. Be yourself, they say, but with great skill.

Sidebar 1 – four popular myths about leadership:
(1) everyone can be a leader. Not true – many executives don't have the self-knowledge or authenticity. Many don't want to be. Many don't choose to be
(2) people who get to the top are leaders. Not necessarily – not everyone in a leadership position is a leader. They may be there for 'political' reasons. And not all leaders are at the top. If they're defined by followers, leaders can be anywhere
(3) leaders deliver results. Not always – if results to leadership was a 1 to 1 relationship, picking leaders would be easy. Sometimes, results are down to luck or monopoly. Sometimes, organisations suffer for reasons that have nothing to do with leadership
(4) leaders are great coaches. Rarely – even though there's a cottage industry based on this teaching. Can happen, but it's not common

Sidebar 2 – can female leaders be true to themselves?
Gender can be a good or a bad, Goffee and Jones say. Women are prone to stereotyping – because they're a minority in most management suites. Many try to avoid labelling by disappearing – dressing and talking like men – but that's counterproductive because it also masks leadership characteristics. Organising is another tactic – campaigning for rights, opportunities, relativities. But most have to work too hard just to survive to have spare capacity – or the will – to fight other battles. A third response is to leverage the stereotypes – but with such wit and skill that they confer benefits.

Narrative - Harvard Business School's Konosuke Matsushita Professor of Leadership, John P Kotter has carved out his own niche in the business and organisation literature as a change specialist. Seven of his books have received awards or honours and a number have been business best sellers, including Leading Change, Corporate Culture and Performance, and A Force for Change: How Leadership Differs from Management.

John Kotter is this month's MCB Press star turn, subject of an interview by editor Sarah Powell on issues of organizational change, the speed of change, and resistance to it, leadership and management. Read the full interview here. Here's a severe summary:

Tell us about your new book The Leading Change Fieldbook
Kotter – just about finished, to be published in summer 2001. It's organized just like Leading Change (1996) and looks at large-scale change in companies, ranging from creating or shifting strategy, to mergers and acquisitions, to incorporating big IT systems, to leaping into e-commerce.

As the name suggests, it's based on interviews with people in the field, for staff and managers at all levels – the people who introduce change. Mostly it's stories from people who are trying to make change happen; lessons they have learned, techniques that they have tried that have worked, or not worked.

All are short and to-the-point and concern the creation of a vision, or the building of a guiding coalition, or the injection of a sense of urgency into a company.

People often go about major change using the "decide and implement model", somebody studies something and then gets the go-ahead from somebody else – that's the decide. Implement involves assigning responsibility, coming up with timetables and resources, following up with paperwork and meetings. An approach that works “terribly poorly.” Doesn't set the stage well enough, doesn't follow through well enough. Designed for small changes in a steady state, yet used constantly to try to create major change.

In past books, you've drawn a line between leadership and management. Why the distinction?
Kotter – because it gives people useful insights about what they are or are not doing. Large-scale organizations – in a slower moving world, with strong market positions or the buffers of monopolies or national protectionism – are easy to manage … they got away without much leadership. As the world speeds up, more and more change is needed; you need more leadership from more people. Companies that are over-managed and under-led are going under.

Successful change is 70% leadership:30% management. But most organizations go about it the other way, trying to drive change 70% with a managerial process, and 30% leadership. Doesn't work.

Is there a feeling that employees in the middle or lower down the chain, who traditionally might have reacted against change, may be beginning to accept change, or at least greet it more positively?
Kotter – possibly. Employees are certainly more receptive to change because they see the inevitability of it. But, when it comes to resistance, don't just assume that it's the troops. Everybody, at one time or another, resists. I have seen many company presidents resist. CEOs and executive vice-presidents were the biggest force in dragging their feet in some companies.

Sometimes it's middle management, not the bottom of the hierarchy; the bottom of the hierarchy has often understood the need for change – they are being pressured by customers or information technology; they are sinking into a black hole and they want change – the problem isn't them, it's this "lump" in the middle.

The reason we sometimes focus on the middle is because very often that is where you need many fewer people and of course people, quite legitimately, feel very threatened by that; they become anchors, rather than being in front, trying to lead the change.

In What Leaders Really Do, you have explored such situations and how to combat them. Is there a formula for this?
Kotter – it helps enormously if you realize people don't resist for a single reason, but for many reasons. The better your understanding of why they are dragging their feet, the better the chances of success.

- some people resist because they think the world is just fine – so why do we need to change it?
- some because they are scared to death; they are paralysed
- some resist because they have no confidence in the people who are trying to drive the change
- others because they look at the vision that is promoted to describe the change and it makes no sense to them
- yet others resist because they never hear about the vision; it looks to those at the top as if they are resisting but, in fact, they just don't know what to do
- then there are people who resist because they are so boxed-in by various things that they can't move; they don't have the information or the training that they need to be able to do something, or they have a boss who is pressuring them, or there is a performance appraisal system that will penalize them if they do what is needed
- some people resist because they see this change effort going along and they don't see any real, concrete signs of success. Even if they were enthusiastic supporters at the beginning, they waver.

To combat such different areas of resistance, you need to adopt differing approaches.

What do you see as the major challenges for leaders in the future?
Kotter: It is the same big trend. They are just going to play themselves out, forcing more and more companies that have had relatively safe harbours to leap further and faster to be able to compete, to win, to serve. That is the most fundamental trend. Companies have to leap further, faster, and in the right direction. If they can't, they're in trouble.

Quick Case Study - to grow your company, leverage your leaders
Dupont's Leadership for Growth program leverages talent and ideas by taking the chemical company's top executives out of their element and teaming them up with colleagues from other divisions. From an article by Betsy Wiesendanger in Fast Company issue 39, page 68

Beer in a plastic bottle? Purists might choke on their Speights at the thought. But Craig Binetti, vice president and general manager of polyester resins and intermediates at DuPont, saw the promise of a brave new market [OK, we know this is a US story, and Speights is a South Island NZ beer, but we can't resist adding a local flavor]. Researchers, packaging experts, and McKinsey consultants had been dissecting the idea for a year. DuPont chemists had conquered plastic's porousness, which lets air in and makes beer go flat. Focus groups indicated that beer drinkers were willing to give plastic a try.

Binetti was ready to leap. But where -- and how, exactly? Should he approach brewers? Bottlers? Wholesalers? Retailers? And were die-hard beer lovers really ready to raise a plastic bottle to their lips?

Managers in Binetti's position -- he has the resources of a $26b, 94,000-person company behind him -- might be tempted to call in more consultants. Instead, he turned to DuPont's Leadership for Growth program, which culls the company's top 400 executives to form teams that can swoop into any of DuPont's 202 product groups.

For three weeks, each team focuses its collective brainpower on the question at hand -- anything from "What are new uses for Kevlar?" to "How can we sell polyester resins online?" The program is both a training tool -- participants are assigned a coach and get refresher courses on decision making and conflict resolution -- and an intelligence unit, a way of leveraging team members' expertise to flush out products and strategies that might be worth millions of dollars in new revenues.

The program is an answer to something that's often said about operations as big as DuPont: "If only they knew what they knew." The company is divided into 21 business units, some of which would qualify for Fortune 500 status on their own. Leadership for Growth is a way of tapping the enormous knowledge base that lurks within DuPont.

"The recommendations that come out of these groups are as good as, if not better than, anything we get from external consultants," says program manager Chor-Huat Lim.

The first rule of the program is this: Throw everybody into the deep end. No team member is assigned to a project within his or her division, and each person brings different skills and a different background to the effort.

"When I heard that I was going to be working on PET, I thought, What's that?" says Tom Keen, who manages a nylon-yarn plant in Chattanooga, Tennessee. PET, or polyethylene terephthalate, is the material that would be used to make plastic beer bottles. Not that PET's promise mattered much to Keen and his team -- at first. "We were a bunch of people who didn't know a plastic beer bottle from a Frisbee," he says. Still, DuPont gave them all of the tools that they needed: three-inch [75mm] binders crammed with product data and market research, and funding to jet off to anywhere in the world to dig up additional intelligence.

For Rajeev Vaidya, a business manager in DuPont's fluoropolymers division, Leadership for Growth was a chance to "step out of the swamp" for three weeks last May, he says. His mission: Explore e-business opportunities for a DuPont countertop material called Corian. He and his cohorts fanned out across the US and talked to fabricators, contractors, and retailers. One person spied on shoppers in a Home Depot.

"We were talking to people who'd worn out the soles of their shoes walking this path," says Vaidya. Among his team's recommendations: Create an Internet system to track orders online, and put kiosks in stores to help consumers design their kitchens.

The beer-bottle team, meanwhile, uncapped its own unorthodox ideas. Could DuPont make its own ale and call it "Du Brew"? (Not likely). How about a bottle shaped like a sports-team mascot? (Sorry, no).

Discussions with brewers, however, proved enlightening. With beer consumption flat in the United States, brewers want to set their brands apart. A plastic bottle would appeal to 21-to-29-year-old males, the demographic that drinks the most beer in the US, brewers said. And venues such as sports stadiums were a sure market. Team members concluded that the best next step was to partner with a brewer -- they even knew of one that was ready to sign on. "That was incredibly valuable information," says Binetti, who is now doing a test run with the brewer named by the team.

Sidebar: Chemical Reaction
How does an industry giant become more nimble? DuPont gets fast answers on new business opportunities by training its executives to think outside their divisions. Here's the program's MO.
Call in the troops for three weeks at most - Leadership for Growth used to be an eight-week assignment, but "it wore people down," says Chor-Huat Lim, program manager of Leadership for Growth.
Ensure that team members can fully commit themselves - "This isn't something that can be done part-time," says Rajeev Vaidya, a business manager in DuPont's fluoropolymers division, who participated in a team last year. "You'd dilute the power of the whole thing." Provide information on what's been done on the issue so far, so that team members don't tread old territory. Market research, competitive information, product literature, and a list of pertinent Web sites are good choices.
Give teams latitude and a travel budget - While exploring e-commerce applications for Corian countertop material, one Delaware-based team sent a member to Dell Computer's Texas headquarters in order to bone up on e-business best practices.
Assign a coach to each team - Coaches don't participate in field work, but they do act as facilitators who can help members work on their management skills, and who can intervene when meltdown seems imminent.

For more about Leadership for Growth, email Lee Hoffman (lee.c.hoffman@usa.dupont.com).
>> Pointers
Lots of the material we know you'd find useful doesn't lend itself to eZine treatment, but we'd really like – at the very least – to point you towards it. Hence, pointers. Hundred-word signposts to stuff we think is worth your time.

>> Mapping strategy. Robert S Kaplan and David P Norton are the originators of the balanced scorecard, a strategic approach to organisational management that 'balances' all key performance indicators. Balanced scorecards tell you the knowledge, skills and systems that your employees will need to innovate and build the right strategic capabilities and efficiencies that deliver specific value to the market, eventually leading to higher shareholder value. There's a summary and some examples in the baldrigeplus.com exhibits collection. In the Sep-Oct 2000 HBR, Kaplan and Norton extend and develop the idea to 'mapping' strategy. If you've got any strategic responsibilities or interests, this article is required reading.

>> Curing health care. Clayton Christensen, Richard Bohmer and John Kenagy (HBR, Sep-Oct, 2000) argue that the (US) health care system is in crisis, and one essential prescription is disruptive innovation. The present system is directed too much at high cost, resource-intensive care, overshooting the everyday needs of most people. They've got a solution. If your interests include healthcare, managing scarcity (or any public resource), or innovation, this is an article you should try to read.
Resources
>> IDENTIFYING AND CULTIVATING TOMORROW'S LEADERS
Companies face an impending crisis as they struggle to fill gaps appearing in their leadership ranks as baby boomers seek early retirement. Because of corporate restructuring, the roster of middle managers who could have risen to upper leadership positions has been depleted. Companies are redefining what constitutes optimal leadership by creating competencies for anticipated future needs and building them within their leadership pipeline. APQC is conducting a consortium learning forum to uncover best practices in succession management. This multiclient benchmarking project will explore how innovative organizations create succession management programs that identify and cultivate potential leaders for a sustainable business advantage. To find out more about this project, visit http://www.apqc.org/proposal/6546lead3.


>> Leadership in change and the wisdom of a gentleman John O. Burdett Participation & Empowerment: An International Journal; 07: 1 1999;pp.5-14
>> Organizational politics: the missing discipline of management? David Butcher, Martin Clarke Industrial & Commercial Training; 31: 1 1999; pp.9-12
>> Employee involvement: opening the diversity Pandora's Box? Gillian Shapiro Personnel Review; 29: 3 2000; pp. 304-323
>> Cladistics: a taxonomy for manufacturing organizations Ian McCarthy, Keith Ridgway Integrated Manufacturing Systems; 11: 1 2000; pp.16-29
Full text at http://www.mcb.co.uk/emrld/now/articles.htm

>> The Inc.com Newsletter - Executive Recruiting
http://www.inc.com/guide/item/0,,GDE76,00.html
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