CHAPTER 9

The Cutting Edge

“The inherent vice of capitalism is the unequal sharing
of the blessings. The inherent blessing of socialism is
the equal sharing of misery.”

We have seen several stories lately about CEOs who say the key to their success is their conviction that “it's not about me.” I beg to differ. If they mean having an attitude of unselfishness — fine. But the cold, hard truth is leadership starts with me.

“We hire eagles and teach them to fly in formation.”

If I am in a leadership position:

— I must know where we should be headed.

— I must select the people best qualified to take us there.

— I must eliminate obstacles I control.

— I must see that rewards are based on performance, not credentials or social ties or political correctness.

— I must refuse to accept mediocrity.

— I must part company with non-performers before they discourage the good ones.

— I must see that customers are treated so they prefer to buy from us.

— I must create policies which encourage vendors and suppliers to cooperate with us.

— I must personify a climate of honesty, integrity and fairness.

— Above all, my deeds must be consistent with my words.

If these responsibilities are not met, I am abdicating by:

1. Allowing confusion and chaos to prevail.

2. Opening the door for someone to step in and take my place.
But, when I meet these requirements, I can truly say, “It's about us; not just about me” because there will be evidence that we are needed and involved in making this a better place.

My goal-setting preference may have something to do with the fact that as a child I was my grandfather's biggest fan. I spent my summers at his dairy farm. He paid attention to me and made me feel special. Every day had a purpose for him. He was busy moving from task to task, from sunup till sundown. Usually, he would talk at suppertime about his next day's schedule. The implications were clear: anticipate, plan ahead, think about tomorrow. After 30 years, I still live with the daily realization that what I don't think about does not get done.

Is Loyalty A Myth?

Today's headlines broadcast an unanswered question—can organizational loyalty be revived?

— The advantages of employee loyalty to an organization are as great today as in the past:

— A loyal employee will not quit under pressure, or upon personal and career reversals.

— A loyal employee is not likely to steal, to file dishonest expense account records, or to use company equipment for personal projects.

— A loyal employee will defend against false criticism by customers, competitors or others.

“Advance those who know what
excellence is . . . and have achieved it.”

Perhaps the decline in loyalty dates from the rebellious days of the 1960's and is caused by four trends:

1. The growth of government entitlements.

Employers feel less inclined to duplicate programs sponsored by government.

“Be thankful we're not getting all
the government we're paying for.”

—Will Rogers, humorist

2. Corporate mergers, acquisitions and downsizing.

Millions of Americans who thought they had long-term jobs have been displaced.

3. The decline of the family . There is only about a 50% chance today that any given marriage will last a lifetime. Children of single-parent households soon learn to fend for themselves as their parents feud over property settlements, alimony, child support, custody and visitation rights.

4. The risk of self-indulgence. Unlike Japan, for example, where the Shinto faith demands respect and care for parents, today's generation stockpiles them in rest homes, nursing homes and retirement communities. The kids often see their elderly parents as a drag, while the oldsters seem to band together in relative isolation to defend pensions, savings, Medicare and Social Security.

• The effects of these trends are reflected in:

— More drug use.
fifty million Americans smoke, thirteen million drink alcohol, one-half million are addicted to heroin, and the average American takes four nonprescription pain pills a day.

— More layoffs chill loyalty.
When you're 35 and see 55 year-olds being forced out, you adopt a cautious and self-protective attitude which reduces your Effectiveness, and you certainly conclude that it's silly to love a corporation which can never love you back.

— More self-protection.
Employees who must constantly defend themselves are not likely to try new ideas.

“If you don't give good people an opportunity
to be engaged, they won't stay.”

— Howard Schultz, Starbucks founder

Employee loyalty is directly related to these common
sense guides:

— Select people who want to be accountable for their actions.

— Build teams in every unit.
When people feel isolated at work they tend to withdraw and become increasingly selfish.

— Use performance goal-setting to build commitment.
The face-to-face aspect of goal-setting is basic to motivation.

— Be generous with recognition.
Praise, rewards, and recognition cost little and solidify a sense of belonging.

On the other hand, we can easily stop advancements by following these . . .

8 Rules to Prevent Progress

1. Be certain everything you approve is politically correct.

Meg Whitman, President and CEO of Ebay, understands the reverse logic of this statement. Named the most powerful woman in American business by Fortune (2004), this understanding has enabled her to become a very effective executive. But, it is how she wields this power that sets her apart. Whitman gains respect not from a corner office, but by asking questions and getting people involved in finding better solutions to problems. “Executive leadership is a span of influence, not of control,” she says. She uses her power in a way that gains respect. The evidence is in Ebay's tremendous success. Touted as the fastest growing company in the history of capitalism, revenues went from $5.7 million in 1998 when she joined the company to $4.3 billion in 2005.

“The production of creative ideas increases when they are expected and decreases when they are rejected.”

2. Never accept an idea that has failed before. It's hard to imagine what life would be like with computer data still stored on punch cards and magnetic tape. Had Alan Shugart thrown in his hat at the first sign of defeat, he would not have developed the efficient disk drive that's used today, or started Seagate Technology, now the biggest disk drive manufacturer. He was motivated to find a better way to sort through data while working at IBM in the 1950's. He eventually left IBM taking a position with a competitor, Memorex. 200 IBM engineers followed him. Shugart Associates was started three years later. Everyone made suggestions on how to improve the product. He had many failures, but pushed on. “When you find yourself at the bottom of a deep hole, quit digging and get some perspective,” he says. In 1979, venture capitalists approached him to lead a company, Seagate, which would manufacture fiveinch disk drives. Funded with $1.5 million, it grew within five years to more than $300 million in revenue. Think of him the next time you turn on your computer.

3. Deal only with employee “representatives,” never with individuals themselves. Everyone wants to be valued and respected.

“People aren't interested in how much you know. It's how much you care,” says Howard Schultz, Chairman of Starbucks. Growing up in Brooklyn housing projects, he never forgot watching his father struggle without health benefits and, being unappreciated by his employers. This early memory helped Schultz lay the groundwork for Starbucks' reputation as a caring employer. He wants employees (all 90,000 of them) to know they are valued, and typically visits 30 to 40 different Starbucks stores each week. With five new locations opening daily worldwide, he guards against losing the atmos-phere he worked so hard to create. He understands the importance of striking a balance between growing a successful company and remaining a caring employer. Bottom line, Schultz goes out of his way to make each employee feel like they are a partner in the business.

“The first employees to be fired should be those
who interfere with progress.”

4. Avoid hiring people who have shown initiative in the past.

Admiral Arleigh Burke was raised on a farm near the Rocky Mountains . As a child, his father assigned not only chores but a deadline for each to be completed. He stressed the importance of leaving no task undone. As a result, the young man developed a keen sense of timing and could be trusted not only to complete a given task but to do it well. This knowledge shaped the man he was to become. Burke eventually entered the U.S. Naval Academy. When assigned to the battleship USS Arizona, he was given the least desirable job on the ship—scraping rust in a bottom hold. It was typically given to sailors as punishment. Burke, however, did not see it that way. He applied himself to the task at hand and was complimented by superiors for his outstanding work. A lieutenant told him, “You will continue to get tough, demanding jobs because they usually are the most important.”

Burke decided he would pursue the hardest and most demanding jobs throughout his naval career, and he did. He became known as the Navy's most famous destroyer commander in WWII. He served three terms as chief of naval operations from 1955 to 1961 and commanded a cruiser division during the Korean War. He was at his best when his ships were outnumbered and not expected to win. The lives of countless men were saved by the actions of Admiral Arleigh Burke.

“Seeking to be useful is more
important than seeking to be secure.”

5. Promote only people who agree with you.

Not everyone who works for you is going to agree with you and vice versa. We are individuals and want to feel like we make a difference. Michael Eskew, Chairman and CEO of UPS, Inc., remembers his beginnings as a package deliverer and still uses that knowledge to oversee the operations of this international shipping giant. Years ago he took a huge risk purchasing six 747s from American Airlines for $25 million each. Although he anguished over the controversial decision, it was a winner. UPS now has over 280 airplanes delivering packages worldwide. “The strategies change and the purpose changes, but the values never change,” says Eskew.

“Complacency is the enemy and
the enemy will not stand still—will you?”

6. When in doubt, appoint a committee.

Discourage problem solving by individuals. Three college graduates of Pepperdine University didn't know what they wanted to do. They traveled around the nation in an RV and interviewed hundreds of successful corporate employees. The message was clear and consistent with every successful person they spoke with . . .” Block out the noise . . . and do what lights you up.” That trip provided the inspiration the young men were looking for. They created Road Trip Productions and now videotape interviews, taking the results back to college campuses. Their video time and attention is now highly sought by companies such as Starbucks, Microsoft, State Farm Insurance, and J. Crew to name a few. They have been approached by MTV to start a reality show and national sponsorship has been offered.

Lessons:

—Find an unmet need.

—Provide a practical solution.

—Develop trustworthy service.

—Test thoroughly and frequently.

—Update and improve continuously.

—Exploit endorsements.

7. Restrict authority of employees to satisfy customer directly.

Customers delayed are customers dismayed. The longer it takes to address a specific problem, the greater the risk of losing them. The most critical link in the “customer chain” is the first person contacted. If no encouraged at that point, all later efforts may be in vain.

“Think about the people who have
earned your respect. Weren't almost
all of them doers, not talkers?”

8. Try to please everyone.

Clara Barton, known as the “Angel of the Battlefield,” didn't worry about rank. She was on a mission to care for wounded soldiers. Barton fought to get supplies to the front lines since twice as many men were dying from infection as from combat wounds. To have a woman on a battlefield was unheard of during the Civil War. Had Clara Barton not stood up for the cause she believed in, we may have never known the American chapter of the Red Cross which was founded by Barton in 1881. She served as president of the American Red Cross from 1881–1904 and was inducted into the National Women's Hall of Fame in 1973.

Faking is Fatal

“You can't fake anything in a leadership position. People sense it. They smell it. In about eight seconds, everyone knows it. If you're trying to look like George Patton, people think, ‘What a phony.' our credibility becomes about zero.”

—Michael Useem

No one could accuse John D. Rockefeller of being a phony. He was known as a thoughtful and courteous man. He had integrity and he was a good listener. These traits were evidenced in the work he accomplished during his lifetime. Rockefeller came from very humble beginnings but was taught from early on the benefits of hard work and saving. Through various endeavors Rockefeller showed his natural talent for making money. He bought and resold candy to his brothers and even raised and sold turkeys that he had taken from a nest in the wild. He worked digging potatoes for a mere 37.5 cents a day and granted a loan, charging interest, to a fellow farmer. “The impression was gaining ground with me that it was a good thing to let the money be my slave and not make myself a slave to the money.”, Rockefeller said.

Money, however, was the one thing that Rockefeller lacked. He was so poor in fact that he wasn't allowed to be photographed for a class picture while attending Owego Academy because his suit was too shabby. But true to his nature, this did not deter him. His sights were set on the future and his entrepreneurial spirit propelled him forward. Rockefeller didn't graduate from high school, yet he found employment as a bookkeeper and threw himself into the position. He went into business with a partner two years later, buying and selling produce. In 1863, Rockefeller was approached by an inventor who had developed a way to distill kerosene from oil. This venture opened the door for all the future would hold for Rockefeller, including running the Standard Oil companies.

True to his caring nature, Rockefeller was also a generous man. He could be seen giving money to beggars on the street and gave millions to the University of Chicago and what is now known as Rockefeller University , as well as charities such as the Rockefeller Foundation. Rockefeller was the epitome of success in many people's minds and he is a perfect example that success can be achieved by staying true to yourself.

“Courage is the capacity to wait
until you've learned as much as
you can and then take action.”

—Warren Bennis

Let's See Your Crown

What's that you say? You don't have one? Then don't pretend you do. If you want your opinion to count, back it up with facts and evidence. Those who say “trust me in this, I know I'm right” have just put on their crowns. They are hoping to get your trust without earning it. They are hoping you will follow their advice because of status, seniority, or self-proclaimed expertise — and hope you will fall for their “forceful presentation.”

Don't allow yourself to be naïve. Ask questions, press for reasons, and look for proof. Challenge unproved options. Test claims. Avoid rushing to judgment just because you are being pushed. Slow down. Be suspicious of those who insist you must act now.

Think of it this way: every time you allow emotion to rule your reason, be sure the advocate is wearing a crown . . . or even better, a halo.

Work Through Trouble

“Show me discipline and I'll show
you progress. Show me laziness and
I'll show you defeat.”

Pablo Casals, renowned cellist and pianist, suffered from such severe arthritis at the age of 90 that he could barely dress himself. His fingers were swollen and he struggled to simply walk. Yet Casals still began his day playing piano. As he played, his fingers loosened and his body could move freely. He was then able to go about his day in a normal fashion.

“The formula for success is:

One (1) portion initiative

Two (2) portions self-discipline

Three (3) portions persistence . . .”

Sergei Rachmanioff had a less than perfect start to life. He had no possessions and no money after fleeing Russia during the Bolshevik Revolution. He didn't let this stop him, though. Rachmanioff practiced Tchaikovsky, Bach, Chopin and Beethoven up to 60 hours a week and eventually became one of the most famous pianists and composers of the 20 th century.

“Winners learn from losses.
Losers make excuses.”

The man responsible for inventing e-mail doesn't get any recognition for it. Ray Tomlinson originally wrote a program called SNDMSG that even used the “@” symbol in the e-mail address. He didn't, however, patent the program. But that's okay with Tomlinson, who says “Computer nerds know that I've done this.”

Robert Kerns faced his share of trouble. After a mishap with a champagne cork on his wedding night which left him blind in one eye, Kerns developed and patented the idea of intermittent windshield wipers. Carmakers developed a similar system soon after. Kearns sued the carmakers and was awarded millions for patent infringement from Ford and Chrysler. Although Kearns persisted to fight his other lawsuits, they were all dismissed after his original patents expired. He ended up spending the majority of his millions fighting the carmakers in court. Unfortunately, simply having good ideas wasn't enough. Kearns couldn't get past his previous setbacks.