My Leadership Perspective December 23, 2008, 2:12PM EST

Obama Needs a New Campaign

The incoming President must focus on one target—energy independence—and employ the same discipline he brought to the election battle

By Nikos Mourkogiannis

Barack Obama’s election has impressed the world as few achievements in recent past have and has helped change the way people overseas view the U.S. This President is going to Washington enjoying the support not only of many U.S. citizens but also the good wishes of many citizens of this planet. Indeed, Barack Obama is the closest thing to a truly global leader that the world has ever had.

Of course, this level of support comes with high expectations, and therein lies the true challenge of this Presidency. Barack Obama is expected to continue the bail out of banks, to execute the bailout of the car industry, find a way to bail us out of a failed policy in the Middle East and in Guantánamo, and to bail out both beleaguered states and cities. He is expected to stop the decline of the U.S. as defined by a myriad of constituencies that are trying to control his agenda even before he has a chance to move to Washington.

Obama cannot hope to win reelection in four years if he chooses to undertake all of these bailouts. What the U.S. needs is a buildup. Obama cannot afford to fight defensively on so many fronts. He needs to concentrate on one, employing the same discipline he exhibited during the primaries and the general campaign. He needs to choose a target and organize a campaign behind it. He should expect all to support his campaign and not waste his political capital supporting campaigns conceived and defined by others. Progress toward the target will generate its own momentum.

The Key to Reelection

The reason he needs to do this is because the history of the U.S. Presidency is clear: Those who used their first year in office to define their permanent campaign won reelection. Those who dissipated their energy among many initiatives did not. Jimmy Carter is a clear example of the latter, while Ronald Reagan and even George W. Bush are examples of the former. It is said—and Ronald Reagan never denied it—that when he was awakened by his National Security Adviser about an international crisis during his first year in office, he had one reaction: “Cut taxes.” Such was his singlemindedness and commitment to his campaign.

Of all the issues in front of the incoming Administration it is energy independence that is the most promising politically. First, campaigning for energy independence allows for an appeal to national security. The Presidency as pulpit is most effective when it is used to advocate steps advancing U.S. security. This is how the highways were built by President Eisenhower and why President Kennedy told us we had to go to the moon.

Second, energy independence resonates with the U.S. character because it reinforces both U.S. exceptionalism and U.S. patriotism. Furthermore, it allows for the momentum that only popular mobilization can give to a campaign. People can install solar panels; people can make a difference—and a statement—by buying hybrid cars.

However, the best attribute of an energy-independence campaign is neither the national security theme nor the organizational advantage of continuous popular mobilization. It is the latitude that it will create for redefining some key issues. We live in the era of ideas. Those who redefine the issues of the day win in the long run. Let’s look at three ways an Obama Administration focused on energy independence could redefine existing problems so they are easier to deal with.

Tax Carbon
It is in the U.S. interest to frame our stance on Iraq from the perspective of safeguarding our oil supplies for the next five years. Most Americans would support such a shift in our criteria for exiting Iraq away from strictly military considerations (as has been the case to date). Indeed, Americans will understand such a policy even if most are still wondering about the exact purpose of going there in the first place.

Citizens are currently evenly divided on whether the Big Three automakers should be bailed out. However, we can unite behind a program that replaces the fleets used by the federal and state governments with all the hybrids and clean cars that Detroit could produce for the next five years. This would not be a bailout, yet such a plan would allow the Big Three to build up and develop economies of scale faster than their competitors.

We are also divided as a nation on taxes. Indeed, our party system is broadly defined by preferences on taxation. Even so, there seems to be agreement on one thing: the need for a fundamental change in taxation. By taxing neither labor nor capital but carbon, we could both unite on two key issues: energy independence and the need for tax reform.

Green Jobs for the Future
This cannot be achieved overnight, but even with oil trading well below $50, there is no time to waste. And the money raised from tax reform should be used to create green jobs for the future and traditional jobs for those who need them and where they are needed urgently: along our highways, in the downtown, all over our ailing and underfunded civil infrastructure, which includes our national grid.

The temptation just to create jobs will be great given the deteriorating state of the economy. However, mere job creation is easy, and jobs created for the sake of creation can be ephemeral. The jobs need to be created for a purpose. And they need to be sustainable, which means they depend on a specific revenue program that cuts across the existing divide on taxes and does not increase the debt or the budget deficit.

Much will become possible if the U.S. citizens can get behind a purpose, and that is what the concept of a campaign conveys. Many of the things expected of the new Administration will not happen unless Obama does what he does best: subjugate

Issue date: Nov. 14, 2008

Column: IBD’s 10 Secrets To Success

Be Honest And Dependable; Take Responsibility

Follow A Solid Purpose

By Steve Watkins

Be clear about your company’s purpose in order to reach the next level of success. Sure, everyone is in it to make money. But finding something deeper helps your firm stand above others in the long run.

Keys to developing a purpose:

* Find your base. Nikos Mourkogiannis, a leadership consultant and author of the book “Purpose,” starts by asking company leaders why they’re in business and how they’d like to be remembered. Put why before how. “Without the discipline of purpose, you can talk about the hows forever,” he told IBD. “Purpose creates something that stands the test of time.”

* Look at the goal. If you make airplane engines, do you want to innovate or do you want to make them safer? “You’re going to the underlying purpose,” Mourkogiannis said. “Purpose is a game of champions, of good companies that want to be great companies.”

* Get buy-in. You can’t dictate the purpose to staffers. They have to believe it. Get employees involved by gauging their moral ideas and what’s important to them.

* Locate your niche. You don’t have to operate in a world-saving field to develop a purpose that people can embrace. Link the work — no matter how simple it seems — to improving lives of customers or employees, says Rob Galford, managing partner at the Center for Leading Organizations, a Boston-based consulting firm. Even Procter & Gamble can say its toilet paper has a larger purpose. “Soft toilet paper makes people’s lives literally more comfortable,” Galford said.

* Put it in action. Whole Foods Market aims to find the best natural and organic foods, support sustainable farming and pave the way to nurture the body, community and planet. An analyst recently asked Chief Executive John Mackey if the company would cut the quality of some products to reduce prices during the economy’s slump. “We are a mission-driven company and we think our business model is very successful,” Mackey said. “I don’t think we’re going to lower our quality.”

* Find the right talent. You have to get everyone on board. Some people aren’t a good fit for a mission and should go. “I have never done this exercise without seeing some people feel they’re not in the right place,” Mourkogiannis said.

* Personalize it. Put up pictures of people using your products. “That gives people a linkage to purpose,” Galford said. “It’s critically important, in times of crisis, to have something deeply embedded as a value so you know it’s about the customer.”

* Show the impact. Demonstrate that 7,000 people use the product each day, and the value of what employees do hits home.

“It’s not just Mrs. Jones ripping open the package,” Galford said. “It’s tying together the qualitative and the quantitative.”

* Don’t stray. Many lenders slammed by the current financial crisis lost their way. Banks went beyond making standard loans to lending to those who couldn’t afford to borrow. “That’s a loss of purpose in a most dramatic way,” Mourkogiannis said. “At the moment the banks couldn’t make money, there was a complete loss of trust.”

Within the week that started on September 14 Lehman Brothers imploded, Merrill Lynch sought refuge with Bank of America and Goldman Sachs and Morgan Stanley relinquished their exalted status as the only stand alone Investment Banks. They petitioned the Fed to henceforth treat them as commoners: they would accept a lot more regulations in exchange for government insurance, as all commercial Banks do.
These are not the largest of the Banks. Unlike City and others in that cohort, Goldman and Morgan were not carrying the heroic Purpose of making Main Street work or operating under pressure to innovate constantly to attract clients. Nor were they supposed to be just servants to their clients as the Credit Unions. Instead, clients were supposed to flock to them; they were the temples of Banking, pursuing excellence and thus setting the standards for the rest of the industry and often for Washington. These were not mere businesses expected to manage themselves well; they were Industry Leaders with the clout and responsibility to also tell others what was to be done and why. And within a week they were no more.

Some called this the death of Investment Banking, which excelled in the US after it built both whole Industries and Countries in Old Europe. In reality it was just the burial of Purpose previously pursued by these venerable institutions. They were the ones who lost the high ground of operating at the interface of competitiveness and morality, of doing well while doing good. They did not fail as managers. Goldman has not missed a single quarter of profitability. They did not perform as Leaders. The question is why?
In 1999, Morgan Stanley really ceased to be a standalone Investment Bank when it merged with Dean Witter, a finance company. Two years later Goldman ceased to be a partnership and went public. The Partners cashed out handsomely and the shareholders did even better- as the new Goldman aggressively expanded its trading and principal investing activities. Within years, investment banking accounted for only 15% of the profits of the financial conglomerate that Goldman had transformed itself into.
Many noticed the transformation but not Goldman itself or the regulator. Goldman continued to be allowed to extend credit up to 30 times its capital while commercial Banks, like The Bank of America, had to manage with leveraging their capital 11 times- as they were subject to a stricter regulatory regime.
In 2003, it seemed that the time of looking at Investment Banking had come. As some might remember, long before we experienced the credit bubble we experienced the dotcom bubble. Investment Banks had pushed the very good idea of connecting through the internet too far, as the idea of securitizing mortgages was to be pushed later. They marketed and then they sold for the worst possible reason: because they could collect upfront fees or could use leverage afforded to them by their privileged regulatory position
President George W. Bush threatened to end their days of “shading the truth”, but nothing happened. As a matter of fact, nobody enjoyed the long party of easy credit launched by Dr. Greenspan more than the Investment Banks.
So these particular Investment Banks that we all knew as the keepers of standards of “Haute Finance” have long gone. I will not write about greed as the cause of their demise. Writing about greed is always an attribution, unless one has evidence relating to actions of individuals. Instead, I will focus on questions of strategy and organization and leadership not exercised.

For some time now there has been disconnect of Purpose and Strategies pursued. Neither growth nor innovation for their own shake was strategic objectives that fitted with the pursuit of excellence.
Looking at it from the organizational perspective, it turned out that the standards of Excellence that Partnerships could pursue were too lofty for these companies, once they became publicly traded and operated under the pressure of having to show quarterly results. Even worse, pursuing what was good for the shareholders and at the same time what was good for clients and their shareholders created more complexity than their leaders wanted to deal with. Freddie and Fannie had a similar – and in their case mortal problem- dealing with complexity when they deviated from their Purpose. Except one would expect better from the two Banks that were seen in a position to advise what is right and what is wrong in the world of Finance.
However, for years now these banks have abandoned Excellence as their Purpose without confronting the consequences. Change or abandonment of Purpose amounts to Transformation. And leading a conscious Transformation is not an easy business. Suffice it to say Transformation will not be achieved overnight now, just because the Fed agreed that Goldman Sachs and Morgan Stanley are no longer Investment Banks. To paraphrase Walter Bagehot: “Honor sunk, but the Commercial Bank has not surfaced as yet.”
As for Investment Banking, it is alive and well. In recent years there has been a convergence of financial services involving Private Equity Firms, Hedge Funds, Asset Management Firms and Investment Banks. What happened last week will just give other institutions the opportunity of moving even more aggressively into Investment Banking.
Morgan Stanley and Goldman Sachs will need some time to readjust, perhaps transform themselves for good by discovering a new Purpose and sticking to it. Their respective tie ups with Mitsubishi and Warren Buffet is a first good step and sets a good example for other Banks to seek to raise capital in the private markets instead of waiting for the Government bailout.
As for Merrill Lynch it has already managed to gain a seat in the future by making a virtue out of necessity. Its acquisition produced the “You Tube” moment of the month by showing that some US Bankers stuck to Strategies consistent with their Purpose. They were just not living in New York.

The Russians were clear after Kosovo was allowed by the international community to declare its independence: allowing a self governing territory to decide to become a sovereign country would have far reaching consequences. It is the Kosovo precedent that the Russians now invoke to support Abkhazia and Ossetia on their road to become sovereign countries.
The US is arguing that the territorial integrity of an existing country, such as Georgia, should be respected. The Russians seem to have recently perfected the argument that the West used to support the independence of Kosovo: The purpose of the international community should be to advance freedom and self determination. Respecting the territorial integrity of existing countries cannot be the overriding purpose of the international community. Territorial integrity has to be shelved when it does not serve the purpose of self determination and is unenforceable, for example when dealing with territories that have been self governed for a long time. Espousing self determination over respect for territorial integrity is a major brake with the past for Moscow. With the exception of the Austro-Hungarian Empire nobody advocated the respect of territorial integrity as the purpose of the international community more loudly than the USSR.
This brake with the past can indeed transform our world as only questions about what is purpose and what are only means for its achievement can. There are several other regions of what the Russians call their “near abroad” where this argument can transform self governed territories to sovereign countries. Next to Georgia is Azerbaijan, where ethnic and energy tensions can easily lead to the redrawing of the map. Naghorno- Karabakh, an Armenian enclave has been enjoying Russian support and self government for years. Across the pond from Georgia is Moldova, with part of its territory administered by the self proclaimed Dnieper Republic which is inhabited by a Russian speaking population. If territorial integrity has to yield to self determination and to facts created on the ground, Georgia is the first of mini crises that will balkanize the Caucuses. These mini crises will delay the development of the region and they will refuse the West pipelines to the Caspian oil free of potential Russian interference. However, they are unlikely to produce a Russian confrontation with the West. For one the West has no power in the region. The only NATO country with borders to Georgia is Turkey, an archenemy for centuries.
Our world will be transformed for ever if the arguments advanced on Georgia are applied in the Ukraine, which, unlike the Caucuses and the Caspian Region, is in the center of what some would call New Europe. Ukraine is a large country- the size of France. Ukrainians are deeply divided on their aspirations. The West of the Country wants to join the EU and NATO. The East is more loyal to Moscow than to Kiev (Ukraine `s capital). As a matter of fact, 17% of Ukraine`s population of 46 million are ethnic Russians. The Russian fleet is allowed to be anchored in Sevastopol, which is a Ukrainian city. This is allowed by treaty which comes up for renewal in 2017. Many in Kiev want the Russian fleet out and NATO in as soon as possible. This infuriates Russia. The anchorage of the fleet and the surrounding Crimean peninsula were handed to Ukraine only in 1954 by Nikita Khrushchev, the Ukrainian born leader of the Soviet Leader without any regard to the feelings of its Russian population. Similarly the Russians blame the Soviets for the set up in the Caucuses. For one, Georgian suzerainty over Ossetia and Abkhazia would not have existed, they argue, absent the machinations of Georgian born Stalin.
To return to current affairs, both Ukraine and Georgia were assured only a couple of months ago in a Heads of States` meeting in Bucharest that they would eventually be admitted to NATO. If both countries had been admitted, on August 7, the Georgians would most likely have invoked Article V of the NATO Charter for the Alliance to come to their aid with military force. Events did not allow for this to happen. It arguably could have saved Georgia`s territorial integrity. There is now no conceivable scenario, diplomatic niceties aside, stopping Abkhazia and Ossetia from eventually exercising self determination. The Russian campaign has transformed the Caucuses. The real question is the future of Ukraine, with talks for ascension to NATO due to start January 1.
Georgia`s entry into NATO, assuming it renounces the use of force for reestablishing its sovereignty over Abkhazia and Ossetia without explicitly resigning from its national aspirations, could be “ yes able”. NATO and Russia have a good record of keeping frontiers quiet. The pipeline from Azerbaijan would be free of Russian interference. Russia will not be seen as threatening Georgian Democracy, without really giving much up. After all, Russia has no vote on who joins NATO.
Ukraine is another matter. Would “Old Europe” commit to defend the territorial integrity of a country with a large part of its population loyal to Moscow and wishing the reintegration of Russia and Ukraine? A positive decision by NATO would corner Russia. China would silently applaud it, because it would reaffirm the importance of territorial integrity, thus strengthening its hand on Taiwan, not to mention Tibet. India would also be happy thinking of Kashmir. But can “Old Europe” afford such a return back into the future in the name of territorial integrity, a principle that it abandoned in Kosovo?
The new US Administration will have NATO `s enlargement on top of its agenda next January. Senator McCain has absolute clarity of purpose. He always saw the need to contain Putin`s Russia before it could become again a superpower. Enlarging NATO and inviting both Georgia and Ukraine to join it would fit that purpose. An Obama Administration would not take a very different position. The two people opening competing for the job of Secretary of State in a Democratic Administration (Ambassador Holbrooke and General Clark) could not have been stronger in their condemnation of Russia. In his speech in Berlin Senator Obama exposed us to his thinking: Europeans have to step up to their NATO obligations and NATO has to face up to its responsibilities in new theaters, like Afghanistan. But if the Obama Doctrine of collective but global NATO responsibility is applicable on Afghanistan, why is it not on Ukraine, a country at the center of the “ New Europe “ that emerged after the collapse of the Soviet Union?
For almost all Republicans and Democrats with policy experience what happened in Georgia represents nothing new but rather the resurface of Russian imperialism that needs to be contained. Only the Neoconservatives agree with the premise of this article that the arguments voiced by Russia over Georgia can transform the world. They believe, as Richard Pearle stated, that Russia is using the arguments of self determination as a theme of a campaign similar to that launched by the Nazis to annex Sudetenland. The neoconservative recipe is the expeditious entry of both Georgia and Ukraine into NATO.
Russian behavior on the ground of Georgia proper will test the validity of the theory of resurgent Russian imperialism. The neoconservative argument is correct in its analysis of the war of ideas that we are experiencing. The policy recommendations, however, represent thinking by analogy, which is often both appealing and flawed. For one, Georgia is a small country, of unquestionable western orientation, with a democratically elected government which has received a disproportionately high amount of western investment and attention and has oil pipelines traversing its territory. Ukraine could not be more different. And the West cannot afford a new split over it, especially while the largest US, UK and French armada since World War Two is amassed in the Gulf of Iran.

That’s my conclusion and BusinessWeek.com has just published an essay I’ve written on how clear a choice this Presidential election really is for the American people. As I note, there are those who are disappointed in the U.S. for squandering its chance to lead the world to a better energy future over the past 21 years. There are those who believe that America Inc. should have more prudently managed its finances. Others believe the U.S. never should have gone to Iraq. Finally, there are those who believe that America should have done a better job waging the war, irrespective of why it was started. There are a lot of people disappointed with America these days; they include many Americans.

However, there is something about America that demands great admiration: the current Presidential election. Elections are supposed to offer clear choices. Nobody disputes that this election offers voters a clear choice. In the past, candidates produced clarity by associating with an ideology along the lines of their party affiliation. Senators John McCain and Barack Obama have gone beyond traditional politics. Each proposes a different purpose for America. And each of them is fit to lead us to his purpose. Therefore, the choice we face is clear and meaningful, for meaningful can be only what is in pursuit of a purpose.

McCain, a Republican, sees an America devoted to “heroism.” The U.S. can defeat its enemies in Iraq, the energy crisis, global warming, and every other calamity that might come along. America would welcome the help of others, but if necessary will do it alone. It has the power but it also has the duty to do so. This is McCain’s America.

Ideal Characters

And the senator from Arizona has the character best fit for that purpose. He is a warrior. Each of us gravitates to one of four ideal characters (BusinessWeek.com, 12/19/07). Paraphrasing the famous German psychologist Carl Jung and the Greek philosopher Plato, I think of the four character types as magicians, sovereigns, lovers, and warriors. McCain has all the characteristics of the warrior and the record of a POW to prove it.

The leadership strengths of a warrior are his focus on the next battle, his ability to hold people accountable, and his propensity for action when he sees the prospect of results. McCain demonstrated enormous focus on Iraq last year, on Gustav only recently. He did hold the Defense Secretary of his own party publicly accountable for a failing policy.

In my view, his finest moment was when he opposed the deployment of the U.S. Marines to Lebanon in 1982. Ronald Reagan made a high-minded decision in committing troops to Lebanon. McCain could not see how this would have a good outcome. Warriors are men and women who focus mostly on the “how.”

The antithesis of the warrior is the sovereign. He or she cares passionately about the “why” and the overall direction. The sovereign’s strength is focusing on the big picture and judging everything on whether it leads to the completion of the big picture. A sovereign has the ability to inspire people by redefining what they believe is possible and getting them to act differently from others.

Inspiring by Distinction

Senator Obama fits that description perfectly, and his record confirms it. His finest hour was when he famously asked “why” the U.S. should attack Iraq. He inspired people by turning the improbability of his candidacy into his biggest campaign asset. When he graduated from Harvard, with the distinction of having managed the Law Review, he became a community organizer, not a Wall Street lawyer. In his youth, he talked the talk of a future political leader.

Today nobody is accusing Obama of not talking the talk. However, the America about which he speaks so eloquently is different from the America imagined by McCain. The Democratic candidate sees a U.S. respected not because of its power but because of the power of its example. Such an America would have as its purpose excellence, as exemplified by setting the standards in fighting terrorism, gaining energy independence, providing jobs, and building alliances.

What makes the choice in this election clear is that we have in front of us two leaders with well-defined characters. They are the antithesis of each other; the strengths of are the weaknesses of the other.

What makes this election meaningful is that the character of each is a perfect fit to the purpose they clearly espouse. What makes this election critical is that it will define the purpose of the U.S. What makes this election difficult for the American voter is that it requires thinking beyond the headlines. “Heroism” and “Excellence” argue for different sets of values, for different budget priorities, for a different organization of the world. We cannot have it all. The candidates are clear about what they want. In November it will be our turn to show what we want.

 
I heard this again and again, one assignment after another, until I came to understand that there was too much “how” and too little “why” in business. So many executives are consumed by how to get things done, rarely by why they should be done in the first place. That’s why I started NikosOnline.com. It’s a place where I can share my thoughts and ideas on the “why” in business, and a place where you can engage in debate and discussion about the “why.”

Years ago, my own discovery of this difference led me on an intellectual journey that resulted in a book, “Purpose,” and an ongoing debate in which I’ve been positioned as the antithesis of Ram Charan, the co-author of ‘Execution’ and “Know-How.” Nearly 100 people weighed in on the topic earlier this year when leadership professor James Heskett fueled a spirited debate between know-how and know why on Harvard Business School’s Working Knowledge website. I watched the discussion from afar, amused by the contrasting theories, humbled by the eloquence of the readers’ responses, the passionate back-and-forth of the participants.

 
 “Is there too little ‘know why’ in business?” asked consultant Mark Howell. “Almost certainly. In “The Leadership Challenge,’ (jim) Kouzes and (Barry) Posner ask the question: ‘Are you on this planet to do something, or are you here just for something to do?’ I believe most businesses begin as a result of finding something to do rather than to do something which is what Mourkogiannis would call purpose.”

 
“You can’t separate know how from know why, and you can’t have one without the other,” wrote Maree Conway, a general manager at Victoria University. “And know why needs to come before know how—there is no point deciding, acting and executing without knowing why you are doing it. Purpose gives you the constant or guiding star—it’s always there to remind you why you do what you do every day.”

 
If there was a consensus in the debate, it was that purpose is powerful and valuable because it is a reason for doing something which appeals to our inner sense of what is right and what is worthwhile. “How” is about management. “Why” is about leadership. A lot of pen and paper has been wasted in making the distinction between managers and leaders. Emerson had it right when he noted that “the man who knows How will always have a job. The man who also knows Why will always be his boss.”

I love that quote and the thinking behind it. Do you?

 
What does it take to put together a winning team in business?

Volumes of articles and books have been written on the topic over the years, offering advice on how to avoid the dysfunction that often renders teams ineffective. We have all been part of groups that failed, either because of hidden agendas or personalities that didn’t quite mesh.

In my experience as an executive and a consultant, I’ve come to believe the personal style of team members has the greatest influence on a group’s success. More important than any technical skill a team member brings is the ability to work closely together, free of backbiting and political maneuvering. The key is having the right mix on your team.

 
The Four Types of Employee
By and large, there are four archetypes of people in companies: magicians, warriors, sovereigns, and lovers. You can easily define them using the Jungian framework introduced by psychologist Robert Moore and mythologist Douglas Gillette.

 
Magicians. They are the rational yet imaginative souls in your organization. They think a new idea or insight is the only thing that can move the world. In truth, they’re obsessed by ideas. Their answer to feeding the troops is to pull a rabbit out of a hat. These types of people think a mere argument over an idea equals action.

 
Lovers. For them, everything comes down to human relations. They’re pragmatic but emotional. They focus on building the winning coalition. They are obsessed not by ideas but by feelings. They consider agreement an action.

 
Sovereigns. They are the emotional and imaginative types. They focus on the big picture and judge everything on whether it leads to where they want to go. They redefine what people consider is possible. They are obsessed by beliefs. And they consider direction a form of action.

 
Warriors. They are rational and pragmatic. They’re focused on the next battle and can only see clearly what’s directly in front of them. They hold people accountable to systems and the fairness of those systems. They’re obsessed by facts. For them, action is finding the critical factor to get something immediately accomplished.

 
Apple’s Steve Jobs is clearly a magician. Watching him introduce a new product on stage (BusinessWeek.com, 7/6/07) is like watching a master magician pull a rabbit out of a hat. Microsoft’s Bill Gates, with all his competitive juice to dominate his industry, is a warrior. IBM’s (IBM) Tom Watson, who plastered the walls of Big Blue with “Think” signs, was a magician. Could anyone think of GE’s Jack Welch (BusinessWeek.com, 12/7/07) as anything other than a warrior? Indeed, one of the most fascinating campaigns in all of business is the attempt by Welch’s successor to transform a warrior company like GE into a hothouse of ideas. Jeff Immelt, whose “imagination at work” vision for GE is an extreme departure from the Welch years, will have a hard time of it without more magicians on his senior team.

 
Maintaining the Balance
Obviously, this framework is a simplification, but there are logical implications for any leader assembling a team. The most effective teams maintain a balance by having a healthy variety of types in key roles because each type is good at doing different things. A mix of magicians, warriors, lovers, and sovereigns will get you the best team possible.

 
When one type dominates, friction and conflict can occur: a fall-off of creativity, a lack of flexibility, risk aversion, and paralysis. That’s why the most effective leaders know who they are and surround themselves with people who complement their strengths and offset their weaknesses. The warrior needs a magician, a sovereign, and a few lovers. What often happens in organizations is you get a group of warriors, and they don’t like the magicians so you don’t have any of them on your team.

 
Clearly, there is beauty in balance. That is the place where individual team members become more sensitive to each other’s needs. Too many magicians and your team will be pondering opportunities all the time, but will lack decisive action, even though the thinking will be excellent. Why? Because magicians are more concerned with having it done “right,” rather than having it done. They’re especially vulnerable to pursuing superior technology at the expense of something that customers would buy. And a group of them in a room will look more like a debating society than a high performance team. Too many lovers and you have another set of problems. These employees value consensus to the detriment of results. They hold far too many meetings. They do too much talking and not enough acting. The lover excessively relies on outside advice and often appears to lack both competitiveness and edge.

 
The Right Mix for Your Team
Too many warriors, on the other hand, will experience difficulty if anything in the environment changes. They won’t be proactive and will consequently miss opportunities competitors may exploit. They appear as a parade of soldiers, and they can be innovation-challenged. Too many sovereigns will often pull an organization in too many directions at once, or will radically change direction often. Sovereign-dominated teams will have no center of gravity and will keep many unresolved business issues up in the air all the time. They appear fragmented, with poor communication, and they often struggle with strategy and direction.

 
That said, some companies require a predominance of one type or another to effectively pursue certain strategies or values. Magicians are the best fit for innovation-based companies in which discovery is crucial to success. Warriors are ideally suited for highly competitive environments that demand a conquering-the-world mindset.

 
Do you have the right mix on your team?

With Richard Rawlinson and Simon Gilles, vice-presidents at Booz Allen Hamilton.

Originally published in Business Week Online on December 20, 2007

Also, listen to my podcast interview iwth Business Week Executive Editor John A. Byrne

Winston Churchill & The Concept of a Campaign

Inspiring your team to wage a campaign—whether it be to save the free world or improve competitiveness—is a key leadership tool

 
One of the greatest campaigners in history is surely Sir Winston Churchill. With his soaring rhetoric and steely tenacity, he inspired the British to believe they could win World War II, and he convinced an isolationist U.S. to mobilize against Adolf Hitler and sell, lend, and lease its arms.

 
Churchill, of course, is one of history’s greatest leaders. There are few of us who could ever match his way with words or hope that our words could bring about the dramatic consequences that his did. But both campaigns—the one at home and the one abroad—were won by his oratory and relationship-building skills. They remain the quintessential case studies of influence and power in leadership.

 
Achievable Targets
I’m not going to even pretend that you can be a Churchill in your company. But the notion of waging a campaign as opposed to heading a project or an initiative is a powerful one in and of itself. The word alone lends importance and credibility to an effort. It elevates that effort in a way that allows and encourages more people to rally around a cause quickly. And the word “campaign” conveys the sometimes grueling nature of what it takes to win something of substance—gaining significant market share against a rival, launching a new breakthrough product, leading a total transformation of a company.

 
Campaigns turn purpose into action, concentrating people’s efforts on what can be done and turning those efforts into results; that is the essence of leadership. Campaigns are sequences of actions—not a single decision or a project—designed to produce clearly defined objectives within specified time frames and with specified resources. These targets are achievable, specific and limited but have strategic significance.

 
A campaign can be directed toward fixing a hole when something is broken, making a U-turn when a change of direction is required, or simply staying on top of your game. A campaign is a form of guided improvisation, held together by a theme as opposed to an action plan. And a series of campaigns, executed in a concerted way, can lead to complete transformation of an organization.

 
In any campaign, the leader’s first job is to get his colleagues to think about and decide what the company or unit is to do. For example, companies have to defend or create competitive advantage. How to defend an advantage may be obvious. But a company’s advantage can change over time without its managers fully appreciating it. Then a campaign may be needed to analyze and identify the “active ingredient”—the advantage. This is the thinking part of leadership.

 
Rallying the Troops
The leader’s second job is to get his colleagues to understand and support the organization’s task. Leaders should not aim to indoctrinate employees but should instead draw upon a shared sense of purpose. A poor attempt to mimic Churchill will do more harm than good. As a leader you should remain authentic to yourself, using what skills you have. Every now and then top executives will need to sponsor a campaign to develop or refine the company’s brand or identity. This is the inspirational part of leadership.

 
The leader’s third job is to recruit and develop people for the campaign and to deploy them in the right roles. Three quarters of large employers readily admit that they are not successful in recruiting highly talented people or effectively identifying the best and weakest performers, according to a study by Towers Perrin, the human resources firm. Allocating people to roles should be a negotiation rather than simply an administrative exercise. The real issue is always how much commitment and energy an individual will bring to a role and how well he and his immediate colleagues will work together. This is the mobilization component of leadership.

 
Equipping Your Team
And finally, a leader’s job is to equip people to perform their tasks for a campaign. That often involves curing some defect, from unclear accountability to poor information design, giving the troops the assets and the resources they need to win. This is the “equip” part of leadership. A campaign should be reasonably short, typically between three and six months, with an absolute maximum of a year. You want to make sure a campaign target doesn’t become out of date and that all the players can focus for the entire period of the campaign.

 
All campaigns are not created equal. When trying to get out of a hole, a leader has to first engage in a thinking campaign and then he or she must inspire. Once successful, the leader has to redefine the possible and then mobilize the organization to build capabilities matching its new ambitions. When things aren’t working out, a U-turn may be needed. More often than not, U-turns start with a restructuring or a shake-up of the senior leadership team.

 
As Churchill once said, “We have before us a great opportunity, a golden opportunity, glittering bright but short-lived. Our chance is now at hand. The chance is there; the cause is there, the man is there.” Remind your team that they have a chance to seize whatever opportunity is before them.

Originally published in Business Week Online on January 22, 2008

Jack Welch has his “4E” framework for what makes for a great leader: positive energy, ability to energize others, edge to summon the courage to make tough decisions, and ability to execute. The Welch framework is just one of many in the leadership literature. Leadership gurus from Warren Bennis to Ram Charan have their own well-known and well-advanced formulas.

 
I humbly submit mine here. It may not be as catchy as some of the others, and I make no claims to originality. But it is informed by my experiences as an executive and as a consultant to dozens of global clients in assignments too numerous to mention. And it is the product of much reading, thinking, and agonizing over what it takes to be a great leader. Besides, as a consultant, I feel guilty when I don’t present a framework to help people. A consultant, after all, is not unlike an optician who prescribes a new pair of glasses—or framework—to improve your eyesight.

 
My modest prescription: Every leader should be mindful that the opportunity to effect meaningful change is limited by time. In other words, leaders should always have a time frame in mind. Leaders work against the clock and the calendar. The TIME framework below describes the four essential actions every leader should master. Most important, this framework allows a leader to simultaneously deal with the myriad cognitive, spiritual, emotional, and power plays of the world.

 
Think. Little is more important to leadership than the opportunity for deep reflection. Often, leaders are caught up doing triage at work, reacting to the daily grind of getting the job done, that they fail to set aside time for the proactive work. Thinking is the part of leadership that leads to innovating, discovering a purpose, creating a vision, and choosing a strategic position. It is the most essential part of the job, the part that focuses on the future.

 
Inspire. This is the most visible component of leadership. You’ve heard this before, but probably with an entirely different spin. Of course, the most effective leaders inspire. To use Welch’s word, they energize. But they also sell the vision, act as an example, tell stories, confront reality, ask the right questions, demonstrate possibilities, reassure, and give hope for a bright future. The leader’s job is to make people comfortable with what the company does so they can shape the task themselves in response to changing positions. Then, they can “do strategy with their fingertips,” to borrow Andy Grove’s phrase. Too many people, however, confuse inspiration with feelings. No wonder, because many leadership writers just happen to be real or imaginary psychologists. But inspiration at its core is a spiritual concept, not rooted in psychology. Inspiration is the spirit in you. A spirit is not a sentiment. It helps us redefine what is possible.

 
Mobilize. The leader’s third role is to mobilize people to perform a task. Every leader must be able to move a team to action, to build coalitions, define campaigns, set targets, and encourage networks. Unlike inspiring, which is typically directed at large numbers of people, mobilizing requires leaders to engage with and influence key players and their specific contributions. The skill to mobilize people is nearly equal to the skill to manage the politics and neutralize opponents. You have to clear the way for action to occur.

 
Empower. Leaders get most things done through others, so execution depends on managing authority correctly and delegating power generously. And part of this task involves allocating resources, scrutinizing and overseeing the deployment of those assets, and disempowering those who misuse them. People have to be equipped to perform their tasks. Assets have to be acquired and deployed. The overall organization has to be designed.

 
Thinking about what we do in all four dimensions is a passport to great leadership. But it’s also important to say clearly that leadership is ineffective or flawed largely when someone is unbalanced on some or all of these dimensions. The best leaders must operate on all four levels.

With Ivan de Suza and Gregor Vogelsang, vice-presidents at Booz Allen Hamilton.

Originally published in Business Week Online on December 26, 2007

For many years, I worked for one of the world’s leading strategy consultancies. On any typical assignment, watching CEOs evaluating the pros and cons of our recommendations, I would always find myself wondering, “What is really determining their decision?”

With the best chief executives, those at the helm of the most effective companies that we advised, I knew that there was something more driving their decisions than simply the need to make immediate profits. Some advice was deemed a natural fit; some, even though it would be difficult to execute, was taken on as part of a long-term strategy. And some “slam-dunk” options were dismissed immediately, often with a comment like, “This is not what we are trying to do here.” I came to recognize that the more consistent this type of reaction was, the more successful the leadership team, because its members knew where they were going. In other words, while strategic alignment and execution were always essential to success, the most successful leaders were those who knew which strategy to pursue.

All leaders, not just top CEOs, face difficult strategic decisions throughout their careers. The single factor that helps them make these decisions correctly is an understanding of what their organization is really trying to do: its Purpose. That’s because the Purpose of the organization— the shared recognition of the reason why it exists—is the context that determines whether a decision is the right one to make at any particular time.

Purpose does not mean making money. It does not even mean producing goods or services, satisfying shareholders or paying taxes and contributing to society. Those are all the things that an organization must do in order to fulfill its Purpose. The Purpose is a moral conviction: a rationale that explains why a particular group of talented people—leaders and employees—should spend their valuable time working together in this particular organization doing these particular things.  For example: Are we here to discover new inventions? To increase people’s happiness? To create beauty and quality? To control the direction of our industry? Or for some other reason?
 
When a Purpose appeals to the moral conviction of employees, then they are capable of acting with conviction and self-determination, without being micromanaged. When the strategy of a company is aligned with its Purpose, then its moves will make sense, whether in the short or long term. When companies operate over time with a clear and well-aligned Purpose, then they become great and influential.

THE FOUR PURPOSES
For today’s global companies, based on my research, there are four moral traditions on which a successful Purpose can be based:
 
1. Discovery centers on the search for the new. Discovery put America on the map, men on the moon and the dot-coms in business. Sony, IBM, Google, and many technologically based companies have succeeded by making innovation and exploration the center of their effort.

2. Excellence focuses on providing the best possible product or service. Excellence built the great cathedrals of Europe and today’s most successful professional and creative businesses. Apple, BMW, and Warren Buffett’s firm Berkshire Hathaway have all built their identity around the artistry of their endeavors.

3. Altruism is built on compassion. Altruism is the driving force of any organization that exists primarily to help others, like many political parties or most charities.  Nordstrom, Hewlett-Packard, and even Wal-Mart have established appeal around the idea that they are, first and foremost, making their customers happy.

4. Heroism sets the standards for everyone else to follow. Heroism resulted in the Roman Empire, Wimbledon champions Serena and Venus Williams and many spectacular growth companies.  Microsoft, ExxonMobil (and its predecessor Standard Oil), and GE have dominated their markets and industries by focusing on their capacity to win every competition.

To be sure, Purpose is not monomaniacal. Wal-Mart beats the competition; Nordstrom provides excellent service; and IBM has had its heroic moments. But the underlying rationale for the decisions made by these companies becomes clear when you study their histories, which always have to do with fulfilling an idea, often set in place by a leader or a leadership team, about “what we are really trying to do here.”

Companies do not adopt such Purposes by accident; they are deliberately chosen by the leaders, often with original forms of expression. Thomas Watson, Sr., didn’t say “our Purpose is discovery.” He put signs reading “Think” in everyone’s office. In doing so, he was making it clear that discovery was the essential constant at IBM, and every other action people took, including financial security, was secondary. The adoption of a Purpose, and the alignment of corporate strategy with that Purpose, is the single most important job that a leader has to perform. And most CEOs know it: “Purpose” is what they most want to talk about, though they do not always call it by that name.

PURPOSE AND CORPORATE STRATEGY
Corporate strategy is a highly complex business—witness the range of articles and books published on the subject, the number of professors who teach it at business school, and the legions of consultants who make a living from it.
 
However, at its heart is a very simple idea: to enjoy competitive advantage is to be able to generate more wealth than other companies in the same industry year after year.  Not all companies are driven to achieve this, but most public companies need to do so, if only to continue appealing to shareholders.

 
So how do you generate more wealth than other competitors?  In the 1980s and 1990s, many companies assumed that efficiency was the key, but they soon discovered that their competitors could easily make the same changes to their operations (for example, through outsourcing or streamlining).When productivity equalized, they were all competitively back where they had started from, but with lower margins. Companies then realized that the key is not efficiency per se (although this is of course essential to any successful business), but differentiation.

Michael Porter expressed this idea most cogently in his influential 1996 Harvard Business Review article, “What is Strategy?” Competitive strategy means “deliberately choosing a different set of activities to deliver a unique mix of value”; and different positions require “…different product configurations, different equipment, different employee behavior….”

But anyone reading Porter—and certainly anyone wanting to implement Porter—is bound to wonder just how this fit between a position and all the activities supporting it is to be achieved. Even more importantly, how can it be achieved so that others are reluctant to try to imitate it? One could argue that Porter’s answer to this is rationalist: in most cases a company can make a strategic decision because it enjoys distinctive strengths or a position in the industry well suited to that decision. Indeed, companies do not all start from the same place, and the additional costs and difficulties of moving to a strategic position will vary from firm to firm.

However, in practical, day-to-day experience, the difference in strengths and position from one company to the next can rapidly change, depending on the capabilities and commitment of the people involved. The underlying crucial issue is building those capabilities and solidifying that commitment. In any company, those depend on a flow of ideas and a web of routines and relationships. Some routines and relationships are formal—like the budgeting procedures or the innovation management procedures that some firms adopt, or the allocation of decision-making authority. Some are informal—the personal networks that allow individuals to access knowledge across and beyond the company or to assemble teams on an ad hoc basis, or to influence the way decisions are made and so move events forward.

Whether formal or informal, the single most important factor shaping these routines and relationships is the organization’s Purpose: they all rest on a set of shared understandings among everyone involved.  If the organization’s Purpose is mere expedience (making as much profit as quickly as possible, or solving problems with the least effort and cost), people will tend to do things and have contact with people to gain only short-term advantage. If the organization’s Purpose is Discovery, Excellence, Altruism, or Heroism, then people will tend to be guided, consciously or not, by those values when doing regular tasks and building relationships at work. And when it comes to the introduction of new ideas, nothing helps people overcome the fear of adopting them more than the shared understanding that they thus serve a higher Purpose (for instance, saving people’s lives).

These shared understandings then underpin all kinds of internal organizational strengths—motivated employees, effective teamwork, knowledge sharing, efficient factories, creative product development teams, good brand management, a spirit of co-operation, flexibility and so on.

PURPOSE AND DECISION MAKING
It was many years before I understood why, when presented with a series of strategic options, some leaders always seemed to make the right decisions and some leaders always seemed to make the wrong decisions. The most successful leaders understood that the best option is the one that the organization will act on most effectively—in other words, the one that fits best with the Purpose.

So, if you are a leader within a company that seems muddled in its strategic direction, spend some time thinking about what drives you and your organization. Perhaps there is a divergence between the two. Perhaps your organization needs to discover or rediscover its Purpose. Ask yourself which leaders and which organizations you most admire. Then ask yourself what drove them to success. Was it Discovery, Excellence, Altruism, or Heroism?  

Could that Purpose be the driving force in your own organization?

Originally published in MWORLD, Winter 2006/2007