September 25, 2018
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Looking at the building blocks of leadership

By Joseph McDonnell, Special to the BDN

Is there any surprise that behind the rise of a successful company there is a visionary leader? In our own generation, leaders like Bill Gates, Steve Jobs, Mark Zuckerberg and Larry Page saw the possibilities of new technology to create innovative companies that have transformed our society. Meg Whitman, Mary Kay Ash, Sam Walton and Jeff Bezos each in a different way revolutionized the way we purchase products. Businesswomen Anita Roddick and Oprah Winfrey not only blazed new entrepreneurial paths, but also heightened awareness of the social responsibility of business.

While Jack Welch, Warren Buffet and Lou Gerstner did not create new companies, they performed perhaps an even more difficult task by transforming long-standing companies. Welch imagined that a 100-year-old bureaucratic company could move at the speed of a start-up. Buffet transformed a shirt manufacturer into a vehicle for investments in companies that enjoyed a franchise position in their industries. And Gerstner made an elephant dance by turning the leading computer maker in the world into a highly profitable technology consulting company.

Vision matters. We can marvel at the accomplishments of these business leaders. But more importantly, we should learn from them. The first job of a business leader is to develop a vision for an organization — to imagine where that company could be in three-five years. It requires a realistic understanding of the market and its future direction, the likely actions of competitors and an assessment of a company’s own capabilities.

A number of years ago, companies in the senior living industry saw that people were living longer, which encouraged them to expand their facilities. These companies accurately assessed the market but failed to take into account the actions of competitors who saw the same thing and expanded their facilities, as well. The simultaneous expansions resulted in a glut of assisted living facilities, which eventually led to a consolidation in the industry. These business leaders developed a vision that accurately assessed market demographics but did not take into account the likely response from competitors or their own capacity to withstand the financial strain of underused facilities.

Mission matters. Business leaders develop a vision within the context of an organization’s mission. The mission describes the company’s purpose, its scope and the customers it serves, all of which helps prevent companies from drifting into areas where they possess no expertise.

Of course, as markets and capabilities change, missions change, as well. Amazon started as a company selling books through the Internet. But today, Amazon describes its mission as seeking “to be the most customer-centric company in the world where people can find and discover anything they want to buy online.” Its scope is defined by the Internet, but its products have expanded far beyond books.

Values matter. Business leaders describe their vision with values that establish a company’s identity and culture. By describing the aspirations of a company, values play an important role in defining the way a vision turns into reality. Values often are articulated as superlatives such as Amazon’s “most customer-centric company in the world.” But these superlatives become mere PR when organizations fail to back up their aspirations with measurable results.

It takes hard work and imagination to instill a set of values within an organization. In his effort to turn GE into a fast-moving, entrepreneurial company, Jack Welch introduced a practice called “work out” where employees gathered for a few days with facilitators but no managers to discuss ways to improve the organization. At the end of these sessions, employees presented their recommendations to their managers, who had to decide on the spot whether to implement these actions.

As a result of these sessions, Welch transformed a stodgy, autocratic organization by engaging in a practice that empowered workers, required managers to listen to the suggestions of those closest to the work and forced decisions to be made quickly in sharp contrast to the bureaucratic approach in the past.

Execution matters. While developing a vision requires insight and strategic intelligence, turning that vision into reality requires different talents — managerial skills to set objectives and organize diverse people to work cooperatively to accomplish established goals. Psychologist Daniel Goleman describes these interpersonal and organizational skills as emotional intelligence. The best business leaders forge inspiring visions, create value-laden cultures and put in place systems to get work done in fulfillment of a company’s mission. If you want to become a great business leader, these are the things that matter.

Joseph McDonnell is dean of the College of Management and Human Service at the University of Southern Maine and faculty member in the Muskie School of Public Service. He formerly served as dean of the College of Business at Stony Brook University in New York and has held executive management positions within both Fortune 500s and start-ups.

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