By Wes Ball. Wes is a strategic innovation consultant and author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success (Westlyn Publishing, 2008) and writes for Leadership turn every Tuesday. See all his posts here. Wes can be reached at www.ballgroup.com.
Are leaders and managers getting dumber or is it just who is assessing them?
Wally Bock’s Three Star Leadership blog led me to a very interesting post by Ken Nowack concerning the discrepancies between self-perception of performance and external assessment for corporate executives. The point of the article was that, as managers move up the corporate ladder, they seem to gain more and more blindness to their real performance.
The “no-clue gene,” as Nowack put it, crosses gender boundaries, but “does seem to be more pronounced as leaders move up the corporate hierarchy.”
Any of us who have worked in the corporate world know what he’s talking about. And the worst part is that most corporate employees look at the top-most levels of their company and fear that the person at the very top may be one of the clueless ones.
I have seen this at work across all size companies from the largest in their category down to mid-sized regional companies. Smaller companies are not immune, but there the faults of a leader are far more apparent to everyone involved, including the leader himself.
Ignoring the obvious and all too typical problem of employees naively believing that they could certainly do better at their manager’s simple job, even though they really don’t see what he or she actually does, I have seen three factors that drive such disconnects for managers between self-perception and the perceptions of those around them:
Corporate pressures on managers/leaders and internal competitiveness are immense these days, and they create a self-defensiveness that increases significantly as one moves up the corporate ladder. This pressure creates stress that actually does reduce performance aptitude, while it also creates a greater self-protective need to justify oneself. Honestly, who would want a top-executive job in most large corporations these days, no matter what the payout looked to be?
The demands upon top leaders are so great that they themselves don’t believe they are up to the challenge, so they compensate with apparently extreme conceit. This is a most natural reaction among most personality types to any self-perception of weakness. Among driver personalities it can be a positive self-motivator – they have learned that, if you think of yourself as something better, you can become it, so they use this tool to drive themselves to greater performance. Among other personality types, this compensation usually backfires.
Most leaders have bought into the belief that they must be able to walk on water in order to lead an organization or team. It’s the old military code that a leader never admits ignorance; he just states his opinion with greater confidence. That is a formula for failure in the corporate world, if I’ve ever seen one. No one can stand up for long to that kind of expectation. Yet, when faced with the reality of personal weakness, many positional leaders just can’t or won’t face that truth.
I wrote a post a few months ago supporting Jeffery Immelt of GE, who had just been whipped public ally by his ex-boss, Jack Welch, for not being a clairvoyant about profit in their tumultuous financial services group. I’m not a big fan of Immelt, but the pressure he was under to perform with perfection in an imperfect environment demonstrates what many top leaders are up against.
This problem only decreases in scope and intensity, as you go down the corporate ladder.
There far too many persons ready and willing to throw someone else under the bus when they spot any weakness that can be exploited.
I can’t even guess how many times I’ve heard corporate employees say that they can’t trust anyone.
The loneliness of business that used to only exist at the top tiers has sifted downstairs throughout the corporate ranks.
The fad of 360-degree assessments has only fueled such isolation, because everyone around you suddenly becomes a potential critic who will be heard.
There is certainly incompetence evident in most organizations. I would suggest, however, that the perceptions of incompetence are often anything but objective, and the causes for the real managerial and leadership weaknesses seen could be addressed through a better model for expectations for leadership and how to assess performance.
When was the last time you trusted a co-worker who could assess your performance?
When was the last time you saw someone in your organization admit weakness?
I had a unique view of this through the 15 years of research I did into dominant companies for my book The Alpha Factor. I saw it at an even closer level as we conducted the tests with more than 75 companies to see if our findings could create dramatic, sustainable growth.
One of the interesting things I discovered was that there was little direct correlation between ability of a company to create such sustainable growth and the actual competence of top leadership.
Rather, it was the willingness of top leadership to allow the smart, very competent people below them to do smart things that had a far greater correlation than the leader’s personal aptitude.
I recall being more than a bit skeptical about the conclusions of Jim Collins’ book, Good to Great, where his team had decided that leadership approach was the critical factor in defining great companies vs. simply good ones.
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
OK, here’s the deal.
We all know that short-term, tactical management is killing American business, right?
We all recognize that top-level managers in publicly-held corporations are being driven crazy with external pressures from investors and stock analysts so they can’t do the “visionary leadership” job they need to do.
Most of us have experienced the destructive effects of this corporate ADD as it filters down to the ranks of “worker bees” who are really keeping the company going, yet feel unappreciated.
We have all seen the exodus of good people who wanted to make a difference for their employer, yet felt they were just wasting their time.
So why does it go on and on? I even see it in privately-held companies, and it frightens me that they would want to embrace this self-destructive behavior.
I’m beginning to believe it’s an impossible problem. So…
I’m throwing out a challenge today for anyone who can show me a publicly-held company that doesn’t have this problem. I want to see that someone has figured out how to overcome this and has been successful at it. I want to believe that it is possible, because I was certainly able to do it in my company – but mine was a privately-held business, so I could ignore people on the outside of my company.
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
Sam Walton made no bones about it. He was not going to lose control of Wal-Mart to the stock market. Even after they started selling stock over the counter, top management at Wal-Mart was able to maintain control over the strategic direction of the company right up to Sam’s death in 1992.
Sam was a leader. He had a clear vision that he would not compromise. He took risks, built a support team to “manage” the company, empowered and nurtured employees, shared profits, and built a company that is still the envy of most retailers. It also became the Alpha in discount retailing due to that leadership.
Compare that with the life of most CEOs today: shareholders and stock analysts really run their companies, because stock price is the measurement of their success. Their bonuses are based upon it, and their future employment is based upon it.
CEOs who have to answer to the whims of the stock market cannot be leaders, because they have already defined themselves as followers.
Is it possible for a CEO of a publicly-owned company to maintain leadership?
Certainly, but it takes an extremely charismatic, visionary, focused individual who is willing and capable of bucking stock analyst and shareholder pressure for short-term profit results and instead keep the company focused upon long-term success.
All of the Alpha companies I researched for my book, The Alpha Factor, had such leadership in their early formative years. What killed most of those companies later on was the compromise of allowing stockholders and stock analysts (or other outsiders) to drive the strategic management of the company.
How would you protect your company from this if you had to generate significant financing?
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
If you’re alive, you’ve probably been watching the drama being played out at Starbucks. Hundreds of stores are slated to close across the country, and customers ranging from local neighbors to business owners to the mayors of cities are calling to lobby for their local store.
Starbucks management claim that they “over expanded,” and that has caught up with them as they experience the same economic downturn that is haunting everyone else. That is certainly the case, but there is something even more significant being displayed here: the power of an Alpha company.
Alpha companies are the leaders of customer expectations in a product or service category. They define what it means to be “good.” Everyone else has to either emulate or overcome them to establish themselves as acceptable. They accomplish that by driving emotional needs fulfillment ever higher to “self-satisfaction” and “significance.”
One of the benefits of making yourself this kind of company is that you have a lot more margin for error when you really blow it.
Not since Coca-Cola nearly immolated itself with “New Coke” in the 1980s has there been such a customer response as we are seeing for Starbucks. Customers saved Coca-Cola from disaster. They are trying to help Starbucks in the same way. What a testimony for leadership over management.
Cost-side management has really been the cause of the problem. What was forgotten was that cost-side management could never have created this kind of customer response. Only revenue-side management (which is the focus of leadership vs. management) could do this.
Luckily, Starbucks has been given a gift by its customers. I hope that it recognizes the true cause of its decline is a cost-side focus and uses this time to re-focus upon the customer experience that defined new experiential expectations for a coffee shop.
How will you react when your local Starbucks closes?
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
It is seldom the “big” decisions that kill a company, except in the final stages, when big decisions are needed to “save” it. It is the day-to-day sacrificing of “Alpha Assets” that drive a company to ruin. Alpha Assets are the real strategic assets a company has, based upon the Alpha Factor model defined in my book.
What happens is that leaders start to believe the lies they hear from customers, retailers, and salespeople that they have to compete on price. They make decisions based upon short-term internal needs before addressing strategic needs of customers. They make budget and other decisions based upon satisfying shareholders and stock analysts, whose interest in the company is extremely short-term.
When I see the kinds of problems that most corporate leaders face on a day-to-day basis, more than 90% of them are ones that either would not exist or would be much less threatening, if the company had not made many small compromises and small “mistakes” over a long time. They have given away the competitive influence they might have had by “playing by the rules.”
In the research for my book, The Alpha Factor, I was continually surprised to find that many Alpha companies struggle with this. The difference is that Alpha’s compromise less and stay focused more upon their core Alpha Assets when making decisions.
What kind of pressure have you seen that tempts you to just solve the problem today without regard to how it might harm your long-term potential?
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
Corporate ADD (see last Tuesday’s posting) may be one of the chief causes of the lack of “leadership training” in corporate America today, other than a simple lack of know-how. Who has time to nurture a subordinate or to model “strategic leadership” in an environment that is all tactical all the time? And, as noted in last Tuesday’s posting, this only gets worse as you go up the corporate ladder.
The danger is that lower-level employees are the only ones with any perceived freedom to experiment or to make truly strategic proposals… at least until they realize that there’s no one upstairs who is listening. That’s when the young ranks of “best and brightest” start looking for another place of employment.
Not all Alpha companies, as I describe them in my book, The Alpha Factor, avoid this problem, but I was lucky enough to work for two where young employees were encouraged to experiment. At one of them, I made a bold comment about how staff at my level were being under-utilized, and the VP of my division challenged me to prove what I could do. That opened up an opportunity for me to initiate a limited, but strategic initiative that created my first big personal success at growing sales.
Be aware, however, that just because a company is the Alpha of its category doesn’t make it the greatest place to work. Some of the Alphas I discuss in the book have extremely threatening cultures, but they seem to work because they are designed to nurture a specific type of employee that can thrive under that management style.
What are your thoughts on how to nurture future strong strategic leaders?
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
In my fifteen year research project for my book, The Alpha Factor, that finally uncovered the core transferable secrets to creating sustainable market dominance no matter how big or small you are, I discovered something that seemed to fly in the face of most business mythology. I discovered that many companies that are the dominant leaders are not run by extraordinarily gifted visionary “leaders.” I know that the book Good to Great came up with the conclusion that “great” companies had great leaders, but I did not find that to be true across the board.
A prime example: Harley-Davidson. They are clearly the Alpha in the cruiser motorcycle category and have been for many years. In the mid-1990s, Harley-Davidsons were found to be the most desired item in the world. Not the most desired motorcycle; the most desired item.
Yet their leadership is not visionary. It is not inspirational. It is not truly “Alpha” material.
The difference between H-D and many other Alphas, Victoria’s Secret for instance, is that one created its Alpha status, the other had it thrust upon them. Victoria’s Secret very purposefully created the aura and dominance they enjoy. Harley-Davidson discovered that they had that aura after they finally got their quality up to an acceptable level in 1983, after the company was purchased from AMF.
H-D’s “Alphaness” is the result of their customers, not their own marketing or strategic vision.
Because of that difference, we may be watching the beginning of the demise of one of the greatest success stories in American manufacturing, as H-D begins to let its quality slide, as I heard from one distraught factory manager.
Could we see them slide into oblivion over the next decade or so, just because their management doesn’t “get it?”
What a shame. As a long-time, die-hard Harley fan, my hope is that they finally catch their customers’ vision!
What’s all the fuss about leader as opposed to manager?
I keep wondering why there is so much discussion about “leader” vs. “manager.” The head of a company has to be a leader, because people need to follow someone or something in order to be productive and effective. Without a model to follow, people fall into chaos. That includes everyone from your children to heads of major corporations to the companies themselves.
Every person within a company also has to be a manager—from the top down. Without management of processes and outcomes, there is chaos.
So what’s the big deal?
The big deal is that we’ve been taught that you can
compartmentalize those two functions; and
you don’t have to be both to run a company.
Wrong! There have been so many books written on this subject that it is almost absurd to talk about it, but even my own research for my book, The Alpha Factor, which was focused upon how to create total dominance in the marketplace, had to recognize the importance of the leader/manager. The key is in understanding how and where to lead and what to manage. And aren’t those the key definers of leaders vs. managers?
I think that it’s the “how,” “where,” and “what” that make a total leader.
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Are leaders and managers getting dumber or is it just who is assessing them?
If you’re alive, you’ve probably been watching the drama being played out at Starbucks. Hundreds of stores are slated to close across the country, and customers ranging from local neighbors to business owners to the mayors of cities are calling to lobby for their local store.
It is seldom the “big” decisions that kill a company, except in the final stages, when big decisions are needed to “save” it. It is the day-to-day sacrificing of “Alpha Assets” that drive a company to ruin. Alpha Assets are the real strategic assets a company has, based upon the Alpha Factor model defined in my book.
A prime example: Harley-Davidson. They are clearly the Alpha in the cruiser motorcycle category and have been for many years. In the mid-1990s, Harley-Davidsons were found to be the most desired item in the world. Not the most desired motorcycle; the most desired item.
For the next few months (longer I hope) Wes Ball, founder of 
