Assignment 1: Discussion—Technology Supporting Business Processes

Over the twentieth century, the ability to process information in terms of labor units has improved by a factor in the order of 1 to 5 trillion. This improvement represents a compounded growth rate of between 30 to 35 percent per year for a century. At the turn of the twentieth century, the mechanical calculator offered a modest productivity increase but the number of workers required to maintain the accounts of a medium-sized business still remained very high. Many tasks would take a large investment in equipment and a significant number of accountants’ weeks to process. A hundred years later, the same tasks can be completed by a standard desktop computer in minutes. The challenge for management has transitioned from a simple reduction in labor requirements to leveraging the increased processing power to develop competitive, efficient, and profitable organizations.

With this example in mind, use the assigned readings for this module and respond to the following:

• Explain how information systems influence businesses to be more competitive, efficient, and profitable.
• Provide at least one example for each factor.

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Assignment 2 Grading Criteria	Maximum Points
Explained how information systems influence businesses to be more competitive, efficient, and profitable.	8
Provided examples of each.

 

 

Assignment 2: Discussion—How Technology is Changing the Face of Business Today

The traditional retail model has focused on finding high-margin, high-volume products or services because limited space means reduced space inventory. For example, organizations such as Walmart select the biggest hits from the broadest genres, called the “short head.” The short head means Walmart will only carry a select mix of country, pop, and rock that is calculated to provide the greatest cost/benefit. The business model of Amazon is different. Amazon provides the short head but also provides the “long tail” of more than 100,000 different audio selections. The competition for customers between the Walmart and Amazon marketplace is profoundly changing the face of retail business today.

Using the assigned reading and the  University online library resources, find at least three scholarly articles that address similar current trends related to e-business and how e-business is changing the face of businesses today.

Using your company or a real-world example from your research, respond to the following:

• Describe how technology is changing the face of businesses today.
• Describe the most critical business processes that utilize information systems in your selected company.
• Explain how IT makes the company’s business processes faster, cheaper, more accurate, and customer-savvy than that of competitors.
• Cite at least three sources found in your online library research.

Give reasons and examples from your research to support your responses.

Write your response in approximately of 300 words. Apply APA standards to citation of sources.

Assignment 3 Grading Criteria

Explained how IT makes the selected company’s business processes faster, cheaper, more accurate, and customer-savvy than that of competitors.

 

From the textbook Management information systems: Managing the digital firm (11th ed.), read the following chapters:

• Information systems in global business today
• Global e-business: How businesses use information systemsChapter 1 Information Systems in Global Business Today

  NBA TEAMS MAKE A SLAM DUNK WITH INFORMATION TECHNOLOGY

  Basketball is a very fast-paced, high-energy sport but it’s also big business. Professional teams that belong to the National Basketball Association (NBA) pay each of their players an average of $5 million per year. For that amount of money, member teams expect a great deal and are constantly on the watch for ways of improving their performance. During an 82-game season, every nuance a coach can pick up about a weakness in an opponent’s offense or in the jump shot of one of his own players will translate into more points on the scoreboard, more wins, and ultimately more money for the team.

  Traditional basketball game statistics failed to capture all of the details associated with every play and were not easily related to videotapes of games. As a result, decisions about changes in tactics or how to take advantage of opponents’ weaknesses were based primarily on hunches and gut instincts. Coaches could not easily answer questions such as “Which types of plays are hurting us?” Now professional basketball coaches and managers are taking their cues from other businesses and learning how to make decisions based on hard data.

  A company called Synergy Sports Technology has found a way to collect and organize fine-grained statistical data and relate the data to associated video clips. Synergy employs more than 30 people to match up video of each play with statistical information on which players have the ball, what type of play is involved, and the result.

  Each game is dissected and tagged, play by play, using hundreds of descriptive categories, and these data are linked to high-resolution video.

  Coaches then use an index to locate the exact video clip in which they are interested and access the video at a protected Web site. Within seconds they are able to watch streaming video on the protected site or they can download it to laptops and even to iPods. One NBA team puchased iPods for every player so they could review videos to help them prepare for their next game.

  For example, if the Dallas Mavericks have just lost to the Phoenix Suns and gave up too many fast-break points, the Mavericks coach can use Synergy’s service to see video clips of every Phoenix fast break in the game. He can also view every Dallas transitional situation for the entire season to see how that night’s game compared with others. According to Dallas Mavericks owner Mark Cuban, “the system allows us to look at every play, in every way, and tie it back to stats. So we can watch how we played every pick and roll, track our success rate, and see how other teams are doing it.”

  

  The service helps coaches analyze the strengths and weaknesses of individual players. For example, Synergy’s system has recorded every offensive step of the Mavericks’ Dirk Nowitzki since he joined the NBA in 1998. The system can show how successfully he is driving right or left in either home or away games, with the ability to break games and player performance into increasingly finer-grained categories. If a user clicks on any statistic, that person will find video clips from the last three seasons of 20, 50, or even 2,000 plays that show Nowitzki making that particular move.

  About 14 NBA teams have already signed up for Synergy’s service, and are using it to help them scout for promising high school and international players. Although nothing will ever replace the need to scout players in person, the service has reduced NBA teams’ skyrocketing travel costs.

  The challenges facing NBA teams show why information systems are so essential today. Like other businesses, professional basketball faces pressures from high costs, especially for team member salaries and travel to search for new talent. Teams are trying to increase revenue by improving employee performance, especially the performance of basketball team members.

  The chapter-opening diagram calls attention to important points raised by this case and this chapter. Management was unable to make good decisions about how to improve the performance of teams and of individual players because it lacked precise data about plays. It had to rely on “best guesses” based on videotapes of games. Management found a new information system to provide better information.

  The information system is based on a service provided by Synergy Sports Technology. Synergy staff members break down each game into a series of plays and then categorize each play by players, type of play, and the outcome. These data are tagged to the videos they describe to make the videos easy to search. NBA coaches and management can analyze the data to see which offensive and defensive moves are the most effective for each team player. Team members themselves can use iPods to download the videos to help them prepare for games. This innovative solution makes it possible for basketball management to use objective statistical data about players, plays, and outcomes to improve their decision making about what players should or shouldn’t do to most effectively counter their opponents.

  

  1.1 The Role of Information Systems in Business Today

  It’s not business as usual in America anymore, or the rest of the global economy. In 2008, American businesses will spend about $840 billion on information systems hardware, software and telecommunications equipment. In addition, they will spend another $900 billion on business and management consulting and services—much of which involves redesigning firms’ business operations to take advantage of these new technologies. Figure 1-1 shows that between 1980 and 2007, private business investment in information technology consisting of hardware, software, and communications equipment grew from 32 percent to 51 percent of all invested capital.

  As managers, most of you will work for firms that are intensively using information systems and making large investments in information technology. You will certainly want to know how to invest this money wisely. If you make wise choices, your firm can outperform competitors. If you make poor choices, you will be wasting valuable capital. This book is dedicated to helping you make wise decisions about information technology and information systems.

  HOW INFORMATION SYSTEMS ARE TRANSFORMING BUSINESS

  You can see the results of this massive spending around you every day by observing how people conduct business. More wireless cell phone accounts were opened in 2008 than telephone land lines installed. Cell phones, BlackBerrys, iPhones, e-mail, and online conferencing over the Internet have all become essential tools of business. Fifty-eight percent of adult Americans have used a cell phone or mobile handheld device for activities other than voice communication, such as texting, emailing, taking a picture, looking for maps or directions, or recording video (Horrigan, 2008).

  By June, 2008, more than 80 million businesses worldwide had dot-com Internet sites registered (60 million in the U.S. alone) (Versign, 2008). Today 138 million Americans shop online, and 117 million have purchased on line. Every day about 34 million Americans go online to research a product or service.

  In 2007, FedEx moved over 100 million packages in the United States, mostly overnight, and the United Parcel Service (UPS) moved 3.7 billion packages worldwide. Businesses sought to sense and respond to rapidly changing customer demand, reduce inventories to the lowest possible levels, and achieve higher levels of operational efficiency. Supply chains have become more fast-paced, with companies of all sizes depending on just-in-time inventory to reduce their overhead costs and get to market faster.

  As newspaper readership continues to decline, more than 64 million people receive their news online. About 67 million Americans now read blogs, and 21 million write blogs, creating an explosion of new writers and new forms of customer feedback that did not exist five years ago (Pew, 2008). Social networking sites like MySpace and Facebook attract over 70 and 30 million visitors a month, respectively, and businesses are starting to use social networking tools to connect their employees, customers, and managers worldwide.

  FIGURE 1-1 INFORMATION TECHNOLOGY CAPITAL INVESTMENT

  

  Information technology capital investment, defined as hardware, software, and communications equipment, grew from 32 percent to 51 percent of all invested capital between 1980 and 2008.

  Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2008.

  E-commerce and Internet advertising are booming: Google’s online ad revenues surpassed $16.5 billion in 2007, and Internet advertising continues to grow at more than 25 percent a year, reaching more than $28 billion in revenues in 2008.

  New federal security and accounting laws, requiring many businesses to keep e-mail messages for five years, coupled with existing occupational and health laws requiring firms to store employee chemical exposure data for up to 60 years, are spurring the growth of digital information now estimated to be 5 exabytes annually, equivalent to 37,000 new Libraries of Congress.

  WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS?

  Lots! What makes management information systems the most exciting topic in business is the continual change in technology, management use of the technology, and the impact on business success. Old systems are being creatively destroyed, and entirely new systems are taking their place. New industries appear, old ones decline, and successful firms are those who learn how to use the new technologies. Table 1-1 summarizes the major new themes in business uses of information systems. These themes will appear throughout the book in all the chapters, so it might be a good idea to take some time now and discuss these with your professor and other students. You may want to even add to the list.

  In the technology area there are three interrelated changes: (1) the emerging mobile digital platform (think iPhones, BlackBerrys, and tiny Web-surfing netbooks), (2) the growth of online software as a service, and (3) the growth in “cloud computing” where more and more business software runs over the Internet. Of course these changes depend on other building-block technologies described in Table 1-1, such as faster processor chips that use much less power.

  TABLE 1-1 WHAT’S NEW IN MIS

  CHANGE

  BUSINESS IMPACT

  TECHNOLOGY

  Cloud computing platform emerges as a major business area of innovation

  A flexible collection of computers on the Internet begins to perform tasks traditionally performed on corporate computers.

  More powerful, energy efficient computer processing and storage devices

  Intel’s new PC processor chips consume 50% less power, generate 30% less heat, and are 20% faster than the previous models, packing over 400 million transistors on a dual-core chip.

  Growth in software as a service (SaaS)

  Major business applications are now delivered online as an Internet service rather than as boxed software or custom systems.

  Netbooks emerge as a growing presence in the PC marketplace, often using open source software

  Small, lightweight, low-cost, energy-efficient, net-centric subnotebooks use Linux, Google Docs, open source tools, flash memory, and the Internet for their applications, storage, and communications.

  A mobile digital platform emerges to compete with the PC as a business system

  Apple opens its iPhone software to developers, and then opens an Applications Store on iTunes where business users can download hundreds of applications to support collaboration, location-based services, and communication with colleagues.

  MANAGEMENT

  Managers adopt online collaboration and social networking software to improve coordination, collaboration, and knowledge sharing

  Google Apps, Google Sites, Microsoft’s Office Sharepoint and IBM’s Lotus Connections are used by over 100 million business decision makers worldwide to support blogs, project management, online meetings, personal profiles, social bookmarks, and online communities.

  Business intelligence applications accelerate

  More powerful data analytics and interactive dashboards provide real-time performance information to managers to enhance management control and decision making.

  Managers adopt millions of mobile tools such as smartphones and mobile Internet devices to accelerate decision making and improve performance

  The emerging mobile platform greatly enhances the accuracy, speed, and richness of decision making as well as responsiveness to customers.

  Virtual meetings proliferate

  Managers adopt telepresence video conferencing and Web conferencing technologies to reduce travel time and cost while improving collaboration and decision making.

  ORGANIZATIONS

  Web 2.0 applications are widely adopted by firms

  Web-based services enable employees to interact as online communities using blogs, wikis e-mail, and instant messaging services. Facebook and MySpace create new opportunities for business to collaborate with customers and vendors.

  Telework gains momentum in the workplace

  The Internet, wireless laptops, iPhones, and BlackBerrys make it possible for growing numbers of people to work away from the traditional office. 55 percent of U.S. businesses have some form of remote work program.

  Outsourcing production

  Firms learn to use the new technologies to outsource production work to low wage countries.

  Co-creation of business value

  Sources of business value shift from products to solutions and experiences and from internal sources to networks of suppliers and collaboration with customers. Supply chains and product development become more global and collaborative; customer interactions help firms define new products and services.

  YouTube, iPhones and Blackberrys, and Facebook are not just gadgets or entertainment outlets. They represent new emerging computing platforms based on an array of new hardware and software technologies and business investments. Besides being successful products in their own right, these emerging technologies are being adopted by corporations as business tools to improve management and achieve competitive advantages. We call these developments the “emerging mobile platform.”

  Managers routinely use so-called “Web 2.0” technologies like social networking, collaboration tools, and wikis in order to make better, faster decisions. Millions of managers rely heavily on the mobile digital platform to coordinate vendors, satisfy customers, and manage their employees. For many if not most U.S. managers, a business day without their cell phones or Internet access is unthinkable.

  As management behavior changes, how work gets organized, coordinated, and measured also changes. By connecting employees working on teams and projects, the social network is where works gets done, where plans are executed, and where managers manage. Collaboration spaces are where employees meet one another—even when they are separated by continents and time zones. The strength of cloud computing, and the growth of the mobile digital platform means that organizations can rely more on telework, remote work, and distributed decision making. Think decentralization. This same platform means firms can outsource more work, and rely on markets (rather than employees) to build value. It also means that firms can collaborate with suppliers and customers to create new products, or make existing products more efficiently.

  All of these changes contribute to a dynamic new global business economy. In fact, without the changes in management information systems just described, the global economy would not succeed.

  GLOBALIZATION CHALLENGES AND OPPORTUNITIES: A FLATTENED WORLD

  In 1492 Columbus reaffirmed what astronomers were long saying: the world was round and the seas could be safely sailed. As it turned out, the world was populated by peoples and languages living in near total isolation from one another, with great disparities in economic and scientific development. The world trade that ensued after Columbus’s voyages has brought these peoples and cultures closer. The “industrial revolution” was really a world-wide phenomenon energized by expansion of trade among nations.

  By 2005, journalist Thomas Friedman wrote an influential book declaring the world was now “flat,” by which he meant that the Internet and global communications had greatly reduced the economic and cultural advantages of developed countries. U.S. and European countries were in a fight for their economic lives, competing for jobs, markets, resources, and even ideas with highly educated, motivated populations in low-wage areas in the less developed world (Friedman, 2006). This “globalization” presents both challenges and opportunities.

  A growing percentage of the economy of the United States and other advanced industrial countries in Europe and Asia depends on imports and exports. In 2009, more than 33 percent of the U.S. economy results from foreign trade, both imports and exports. In Europe and Asia, the number exceeds 50 percent. Many Fortune 500 U.S. firms derive half their revenues from foreign operations. For instance, more than half of Intel’s revenues in 2006 came from overseas sales of its microprocessors. Toys for chips: 80 percent of the toys sold in the U.S. are manufactured in China, while about 90 percent of the PCs manufactured in China use American-made Intel or Advanced Micro Design (AMD) chips.

  It’s not just goods that move across borders. So too do jobs, some of them high-level jobs that pay well and require a college degree. In the past decade the U.S. lost several million manufacturing jobs to offshore, low-wage producers. But manufacturing is now a very small part of U.S. employment (less than 12 percent). In a normal year, about 300,000 service jobs move offshore to lower wage countries, many of them in less-skilled information system occupations, but also including “tradable service” jobs in architecture, financial services, customer call centers, consulting, engineering, and even radiology.

  On the plus side, the U.S. economy creates over 3.5 million new jobs a year, and employment in information systems, and the other service occupations listed above, has expanded in sheer numbers, wages, productivity, and quality of work. Outsourcing has actually accelerated the development of new systems in the United States and worldwide.

  The challenge for you as a business student is to develop high-level skills through education and on-the-job experience that cannot be outsourced. The challenge for your business is to avoid markets for goods and services that can be produced offshore much less expensively. The opportunities are equally immense. You will find throughout this book examples of companies and individuals who either failed or succeeded in using information systems to adapt to this new global environment.

  What does globalization have to do with management information systems? That’s simple: everything. The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting on a global scale. Communication between a factory floor in Shanghai and a distribution center in Rapid Falls, South Dakota, is now instant and virtually free. Customers now can shop in a worldwide marketplace, obtaining price and quality information reliably 24 hours a day. Firms producing goods and services on a global scale achieve extraordinary cost reductions by finding low-cost suppliers and managing production facilities in other countries. Internet service firms, such as Google and eBay, are able to replicate their business models and services in multiple countries without having to redesign their expensive fixed-cost information systems infrastructure. Half of the revenue of eBay (as well as General Motors) in 2009 originates outside the United States. Briefly, information systems enable globalization.

  THE EMERGING DIGITAL FIRM

  All of the changes we have just described, coupled with equally significant organizational redesign, have created the conditions for a fully digital firm. A digital firm can be defined along several dimensions. A digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.

  Business processes refer to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Developing a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of business processes, and the ways organizations accomplish their business processes can be a source of competitive strength. (A detailed discussion of business processes can be found in Chapter 2.)

  INTERACTIVE SESSION: MANAGEMENT VIRTUAL MEETINGS: SMART MANAGEMENT

  For many businesses, including investment banking, accounting, law, technology services, and management consulting, extensive travel is a fact of life. The expenses incurred by business travel have been steadily rising in recent years, primarily due to increasing energy costs. In an effort to reduce travel expenses, many companies, both large and small, are using videoconferencing and Web conferencing technologies.

  A June 2008 report issued by the Global e-Sustainability Initiative and the Climate Group estimated that up to 20 percent of business travel could be replaced by virtual meeting technology.

  A videoconference allows individuals at two or more locations to communicate through two-way video and audio transmissions at the same time. The critical feature of videoconferencing is the digital compression of audio and video streams by a device called a codec. Those streams are then divided into packets and transmitted over a network or the Internet. The technology has been plagued by poor audio and video performance in the past, usually related to the speed at which the streams were transmitted, and its cost was prohibitively high for all but the largest and most powerful corporations. Most companies deemed videoconferencing as a poor substitute for face-to-face meetings.

  However, vast improvements in videoconferencing and associated technologies have renewed interest in this way of working. Videoconferencing is now growing at an annual rate of 30 percent. Proponents of the technology claim that it does more than simply reduce costs. It allows for ‘better’ meetings as well: it’s easier to meet with partners, suppliers, subsidiaries, and colleagues from within the office or around the world on a more frequent basis, which in most cases simply cannot be reasonably accomplished through travel. You can also meet with contacts that you wouldn’t be able to meet at all without videoconferencing technology.

  The top-of-the-line videoconferencing technology is known as telepresence. Telepresence strives to make users feel as if they are actually present in a location different from their own. Telepresence products provide the highest-quality videoconferencing available on the market to date. Only a handful of companies, such as Cisco, HP, and Polycom, supply these products. Prices for fully equipped telepresence rooms can run to $500,000.

  Companies able to afford this technology report large savings. For example, technology consulting firm Accenture reports that it eliminated expenditures for 240 international trips and 120 domestic flights in a single month. The ability to reach customers and partners is also dramatically increased. Other business travelers report tenfold increases in the number of customers and partners they are able to reach for a fraction of the previous price per person. Cisco has over 200 telepresence rooms and predicts that it saves $100 million in travel costs each year.

  Videoconferencing products have not traditionally been feasible for small businesses, but another company, LifeSize, has introduced an affordable line of products as low as $5,000. Reviews of the LifeSize product indicate that when a great deal of movement occurs in a frame, the screen blurs and distorts somewhat. But overall, the product is easy to use and will allow many smaller companies to use a high-quality videoconferencing product.

  There are even some free Internet-based options like Skype videoconferencing and ooVoo. These products are of lower quality than traditional videoconferencing products, and they are proprietary, meaning they can only talk to others using that very same system. Most videoconferencing and telepresence products are able to interact with a variety of other devices. Higher-end systems include features like multi-party conferencing, video mail with unlimited storage, no long-distance fees, and a detailed call history.

  Companies of all sizes are finding Web-based online meeting tools such as WebEx, Microsoft Office Live Meeting, and Adobe Acrobat Connect especially helpful for training and sales presentations. These products enable participants to share documents and presentations in conjunction with audioconferencing and live video via Webcam. Cornerstone Information Systems, a Bloomington, Indiana business software company with 60 employees, cut its travel costs by 60 percent and the average time to close a new sale by 30 percent by performing many product demonstrations online.

  Before setting up videoconferencing or telepresence, it’s important for a company to make sure it really needs the technology to ensure that it will be a profitable venture. Companies should determine how their employees conduct meetings, how they communicate and with what technologies, how much travel they do, and their network’s capabilities. There are still plenty of times when face-to-face interaction is more desirable, and often traveling to meet a client is essential for cultivating clients and closing sales.

  Videoconferencing figures to have an impact on the business world in other ways, as well. More employees may be able to work closer to home and balance their work and personal lives more efficiently; traditional office environments and corporate headquarters may shrink or disappear; and freelancers, contractors, and workers from other countries will become a larger portion of the global economy.

  Sources: Steve Lohr, “As Travel Costs Rise, More Meetings Go Virtual,” The New York Times, July 22, 2008; Karen D. Schwartz, “Videoconferencing on a Budget,” eWeek, May 29, 2008; and Jim Rapoza, “Videoconferencing Redux,” eWeek, July 21, 2008; Mike Fratto, “High-Def Conferencing At a Low Price,” Information Week, July 14, 2008; Marianne Kolbasuk McGee, “Looking Into The Work-Trend Crystal Ball,” Information Week, June 24, 2008; Eric Krapf, “What’s Video Good For?”, Information Week, July 1, 2008.

  CASE STUDY QUESTIONS

  1. One consulting firm has predicted that video and Web conferencing will make business travel extinct. Do you agree? Why or why not?

  2. What is the distinction between videoconferencing and telepresence?

  3. What are the ways in which videoconferencing provides value to a business? Would you consider it smart management? Explain your answer.

  4. If you were in charge of a small business, would you choose to implement videoconferencing? What factors would you consider in your decision?

  MIS IN ACTION

  Explore the WebEx Web site (www.webex.com) and note all of its capabilities for both small and large businesses, then answer the following questions:

  1. List and describe its capabilities for small-medium and large businesses. How useful is WebEx? How can it help companies save time and money?

  2. Compare WebEx video capabilities with the videoconferencing capabilities described in this case.

  3. Describe the steps you would take to prepare for a Web conference as opposed to a face-to-face conference.

  Key corporate assets—intellectual property, core competencies, and financial and human assets—are managed through digital means. In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm.

  Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times. Digital firms offer extraordinary opportunities for more flexible global organization and management. In digital firms, both time shifting and space shifting are the norm. Time shifting refers to business being conducted continuously, 24/7, rather than in narrow “work day” time bands of 9 a.m. to 5 p.m. Space shifting means that work takes place in a global workshop, as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.

  A few firms, such as Cisco Systems and Dell Computers, are close to becoming digital firms, using the Internet to drive every aspect of their business. Most other companies are not fully digital, but they are moving toward close digital integration with suppliers, customers, and employees. Many firms, for example, are replacing traditional face-to-face meetings with “virtual” meetings using videoconferencing and Web conferencing technology. The Interactive Session on Management provides more detail on this topic.

  STRATEGIC BUSINESS OBJECTIVES OF INFORMATION SYSTEMS

  What makes information systems so essential today? Why are businesses investing so much in information systems and technologies? In the United States, more than 23 million managers and 113 million workers in the labor force rely on information systems to conduct business. Information systems are essential for conducting day-to-day business in the United States and most other advanced countries, as well as achieving strategic business objectives.

  Entire sectors of the economy are nearly inconceivable without substantial investments in information systems. E-commerce firms such as Amazon, eBay, Google, and E*Trade simply would not exist. Today’s service industries—finance, insurance, and real estate, as well as personal services such as travel, medicine, and education—could not operate without information systems. Similarly, retail firms such as Wal-Mart and Sears and manufacturing firms such as General Motors and General Electric require information systems to survive and prosper. Just like offices, telephones, filing cabinets, and efficient tall buildings with elevators were once the foundations of business in the twentieth century, information technology is a foundation for business in the twenty-first century.

  There is a growing interdependence between a firm’s ability to use information technology and its ability to implement corporate strategies and achieve corporate goals (see Figure 1-2). What a business would like to do in five years often depends on what its systems will be able to do. Increasing market share, becoming the high-quality or low-cost producer, developing new products, and increasing employee productivity depend more and more on the kinds and quality of information systems in the organization. The more you understand about this relationship, the more valuable you will be as a manager.

  Specifically, business firms invest heavily in information systems to achieve six strategic business objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; improved decision making; competitive advantage; and survival.

  FIGURE 1-2 THE INTERDEPENDENCE BETWEEN ORGANIZATIONS AND INFORMATION SYSTEMS

  

  In contemporary systems there is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

  Operational Excellence

  Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behavior.

  Wal-Mart, the largest retailer on Earth, exemplifies the power of information systems coupled with brilliant business practices and supportive management to achieve world-class operational efficiency. In 2007, Wal-Mart achieved close to $379 billion in sales—nearly one-tenth of retail sales in the United States—in large part because of its RetailLink system, which digitally links its suppliers to every one of Wal-Mart’s stores. As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf. Wal-Mart is the most efficient retail store in the industry, achieving sales of more than $28 per square foot, compared to its closest competitor, Target, at $23 a square foot, with other retail firms producing less than $12 a square foot.

  New Products, Services, and Business Models

  Information systems and technologies are a major enabling tool for firms to create new products and services, as well as entirely new business models. A business model describes how a company produces, delivers, and sells a product or service to create wealth.

  Today’s music industry is vastly different from the industry in 2000. Apple Inc. transformed an old business model of music distribution based on vinyl records, tapes, and CDs into an online, legal distribution model based on its own iPod technology platform. Apple has prospered from a continuing stream of iPod innovations, including the iPod, the iTunes music service, and the iPhone.

  Customer and Supplier Intimacy

  When a business really knows its customers, and serves them well, the customers generally respond by returning and purchasing more. This raises revenues and profits. Likewise with suppliers: the more a business engages its suppliers, the better the suppliers can provide vital inputs. This lowers costs. How to really know your customers, or suppliers, is a central problem for businesses with millions of offline and online customers.

  

  With its stunning multitouch display, full Internet browsing, digital camera, and portable music player, Apple’s iPhone set a new standard for mobile phones. Other Apple products have transformed the music and entertainment industries.

  The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technologies to achieve customer intimacy. These hotels use computers to keep track of guests’ preferences, such as their preferred room temperature, check-in time, frequently dialed telephone numbers, and television programs, and store these data in a giant data repository. Individual rooms in the hotels are networked to a central network server computer so that they can be remotely monitored or controlled. When a customer arrives at one of these hotels, the system automatically changes the room conditions, such as dimming the lights, setting the room temperature, or selecting appropriate music, based on the customer’s digital profile. The hotels also analyze their customer data to identify their best customers and to develop individualized marketing campaigns based on customers’ preferences.

  JC Penney exemplifies the benefits of information systems-enabled supplier intimacy. Every time a dress shirt is bought at a Penney store in the United States, the record of the sale appears immediately on computers in Hong Kong at the TAL Apparel Ltd. supplier, a giant contract manufacturer that produces one in eight dress shirts sold in the United States. TAL runs the numbers through a computer model it developed and then decides how many replacement shirts to make, and in what styles, colors, and sizes. TAL then sends the shirts to each Penney store, bypassing completely the retailer’s warehouses. In other words, Penney’s shirt inventory is near zero, as is the cost of storing it.

  Improved Decision Making

  Many business managers operate in an information fog bank, never really having the right information at the right time to make an informed decision. Instead, managers rely on forecasts, best guesses, and luck. The result is over-or underproduction of goods and services, misallocation of resources, and poor response times. These poor outcomes raise costs and lose customers. In the past decade, information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions.

  For instance, Verizon Corporation, one of the largest regional Bell operating companies in the United States, uses a Web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance for each locality served, and line outages or storm-damaged lines. Using this information, managers can immediately allocate repair resources to affected areas, inform consumers of repair efforts, and restore service fast.

  

  Information Builders’ digital dashboard delivers comprehensive and accurate information for decision making. The graphical overview of key performance indicators helps managers quickly spot areas that need attention.

  Competitive Advantage

  When firms achieve one or more of these business objectives—operational excellence; new products, services, and business models; customer/supplier intimacy; and improved decision making—chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match.

  Perhaps no other company exemplifies all of these attributes leading to competitive advantage more than Toyota Motor Company. Toyota has become the world’s largest auto maker because of its high level of efficiency and quality. Competitors struggle to keep up. Toyota’s legendary Toyota Production System (TPS) focuses on organizing work to eliminate waste, making continuous improvements, and optimizing customer value. Information systems help Toyota implement the TPS and produce vehicles based on what customers have actually ordered.

  Survival

  Business firms also invest in information systems and technologies because they are necessities of doing business. Sometimes these “necessities” are driven by industry-level changes. For instance, after Citibank introduced the first automatic teller machines (ATMs) in the New York region in 1977 to attract customers through higher service levels, its competitors rushed to provide ATMs to their customers to keep up with Citibank. Today, virtually all banks in the United States have regional ATMs and link to national and international ATM networks, such as CIRRUS. Providing ATM services to retail banking customers is simply a requirement of being in and surviving in the retail banking business.

  There are many federal and state statutes and regulations that create a legal duty for companies and their employees to retain records, including digital records. For instance, the Toxic Substances Control Act (1976), which regulates the exposure of U.S. workers to more than 75,000 toxic chemicals, requires firms to retain records on employee exposure for 30 years. The Sarbanes—Oxley Act (2002), which was intended to improve the accountability of public firms and their auditors, requires certified public accounting firms that audit public companies to retain audit working papers and records, including all e-mails, for five years. Many other pieces of federal and state legislation in healthcare, financial services, education, and privacy protection impose significant information retention and reporting requirements on U.S. businesses. Firms turn to information systems and technologies to provide the capability to respond to these

  1.2 Perspectives on Information Systems

  So far we’ve used information systems and technologies informally without defining the terms. Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. This includes not only computer machines, disk drives, and handheld mobile devices, but also software, such as the Windows or Linux operating systems, the Microsoft Office desktop productivity suite, and the many thousands of computer programs that can be found in a typical large firm. “Information systems” are more complex and can be best be understood by looking at them from both a technology and a business perspective.

  WHAT IS AN INFORMATION SYSTEM?

  An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.

  Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.

  A brief example contrasting information and data may prove useful. Supermarket checkout counters scan millions of pieces of data from bar codes, which describe each product. Such pieces of data can be totaled and analyzed to provide meaningful information, such as the total number of bottles of dish detergent sold at a particular store, which brands of dish detergent were selling the most rapidly at that store or sales territory, or the total amount spent on that brand of dish detergent at that store or sales region (see Figure 1-3).

  FIGURE 1-3 DATA AND INFORMATION

  

  Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory.

  Three activities in an information system produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services. These activities are input, processing, and output (see Figure 1-4). Input captures or collects raw data from within the organization or from its external environment. Processing converts this raw input into a meaningful form. Output transfers the processed information to the people who will use it or to the activities for which it will be used. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage.

  FIGURE 1-4 FUNCTIONS OF AN INFORMATION SYSTEM

  

  An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.

  In the NBA teams’ system for analyzing basketball moves, there are actually two types of raw input. One consists of all the data about each play entered by Synergy Sports Technology’s staff members—the player’s name, team, date of game, game location, type of play, other players involved in the play, and the outcome. The other input consists of videos of the plays and games, which are captured as digital points of data for storage, retrieval, and manipulation by the computer.

  Synergy Sports Technology server computers store these data and process them to relate data such as the player’s name, type of play, and outcome to a specific video clip. The output consists of videos and statistics about specific players, teams, and plays. The system provides meaningful information, such as the number and type of defensive plays that were successful against a specific player, what types of offensive plays were the most successful against a specific team, or comparisons of individual player and team performance in home and away games.

  Although computer-based information systems use computer technology to process raw data into meaningful information, there is a sharp distinction between a computer and a computer program on the one hand, and an information system on the other. Electronic computers and related software programs are the technical foundation, the tools and materials, of modern information systems. Computers provide the equipment for storing and processing information. Computer programs, or software, are sets of operating instructions that direct and control computer processing. Knowing how computers and computer programs work is important in designing solutions to organizational problems, but computers are only part of an information system.

  A house is an appropriate analogy. Houses are built with hammers, nails, and wood, but these do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one’s head. Computers and programs are the hammer, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to these solutions.

  DIMENSIONS OF INFORMATION SYSTEMS

  To fully understand information systems, you must understand the broader organization, management, and information technology dimensions of systems (see Figure 1-5) and their power to provide solutions to challenges and problems in the business environment. We refer to this broader understanding of information systems, which encompasses an understanding of the management and organizational dimensions of systems as well as the technical dimensions of systems, as information systems literacy. Computer literacy, in contrast, focuses primarily on knowledge of information technology.

  FIGURE 1-5 INFORMATION SYSTEMS ARE MORE THAN COMPUTERS

  

  Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.

  The field of management information systems (MIS) tries to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm.

  Let’s examine each of the dimensions of information systems—organizations, management, and information technology.

  Organizations

  Information systems are an integral part of organizations. Indeed, for some companies, such as credit reporting firms, without an information system, there would be no business. The key elements of an organization are its people, structure, business processes, politics, and culture. We introduce these components of organizations here and describe them in greater detail in Chapters 2 and 3.

  Organizations have a structure that is composed of different levels and specialties. Their structures reveal a clear-cut division of labor. Authority and responsibility in a business firm are organized as a hierarchy, or a pyramid structure. The upper levels of the hierarchy consist of managerial, professional, and technical employees, whereas the lower levels consist of operational personnel.

  Senior management makes long-range strategic decisions about products and services as well as ensures financial performance of the firm. Middle management carries out the programs and plans of senior management and operational management is responsible for monitoring the daily activities of the business. Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm, whereas data workers, such as secretaries or clerks, assist with paperwork at all levels of the firm. Production or service workers actually produce the product and deliver the service (see Figure 1-6).

  FIGURE 1-6 LEVELS IN A FIRM

  

  Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management.

  Experts are employed and trained for different business functions. The major business functions, or specialized tasks performed by business organizations, consist of sales and marketing, manufacturing and production, finance and accounting, and human resources (see Table 1-2). Chapter 2 provides more detail on these business functions and the ways in which they are supported by information systems.

  An organization coordinates work through its hierarchy and through its business processes, which are logically related tasks and behaviors for accomplishing work. Developing a new product, fulfilling an order, or hiring a new employee are examples of business processes.

  Most organizations’ business processes include formal rules that have been developed over a long time for accomplishing tasks. These rules guide employees in a variety of procedures, from writing an invoice to responding to customer complaints. Some of these business processes have been written down, but others are informal work practices, such as a requirement to return telephone calls from co-workers or customers, that are not formally documented. Information systems automate many business processes. For instance, how a customer receives credit or how a customer is billed is often determined by an information system that incorporates a set of formal business processes.

  Each organization has a unique culture, or fundamental set of assumptions, values, and ways of doing things, that has been accepted by most of its members. You can see organizational culture at work by looking around your university or college. Some bedrock assumptions of university life are that professors know more than students, the reasons students attend college is to learn, and that classes follow a regular schedule.

  Parts of an organization’s culture can always be found embedded in its information systems. For instance, UPS’s concern with placing service to the customer first is an aspect of its organizational culture that can be found in the company’s package tracking systems, which we describe later in this section.

  Different levels and specialties in an organization create different interests and points of view. These views often conflict over how the company should be run and how resources and rewards should be distributed. Conflict is the basis for organizational politics. Information systems come out of this cauldron of differing perspectives, conflicts, compromises, and agreements that are a natural part of all organizations. In Chapter 3, we examine these features of organizations and their role in the development of information systems in greater detail.

  TABLE 1-2 MAJOR BUSINESS FUNCTIONS

  FUNCTION

  PURPOSE

  Sales and marketing

  Selling the organization’s products and services

  Manufacturing and production

  Producing and delivering products and services

  Finance and accounting

  Managing the organization’s financial assets and maintaining the organization’s financial records

  Human resources

  Attracting, developing, and maintaining the organization’s labor force; maintaining employee records

  Management

  Management’s job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment; they set the organizational strategy for responding to those challenges; and they allocate the human and financial resources to coordinate the work and achieve success. Throughout, they must exercise responsible leadership. The business information systems described in this book reflect the hopes, dreams, and realities of real-world managers.

  But managers must do more than manage what already exists. They must also create new products and services and even re-create the organization from time to time. A substantial part of management responsibility is creative work driven by new knowledge and information. Information technology can play a powerful role in helping managers design and deliver new products and services and redirecting and redesigning their organizations. Chapter 12 treats management decision making in detail.

  Technology

  Information technology is one of many tools managers use to cope with change. Computer hardware is the physical equipment used for input, processing, and output activities in an information system. It consists of the following: computers of various sizes and shapes (including mobile handheld devices); various input, output, and storage devices; and telecommunications devices that link computers together.

  Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. Chapter 5 describes the contemporary software and hardware platforms used by firms today in greater detail.

  Data management technology consists of the software governing the organization of data on physical storage media. More detail on data organization and access methods can be found in Chapter 6.

 

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Assignment 1: Leadership versus Management

Leadership and management are often used interchangeably in US organizations. They are similar and related but not the same. They have different orientations and both are needed by organizations today. They complement each other and often are seen as two sides of the same coin

Using the module readings, University online library resources, and the Internet, research the concepts of leadership and management. Respond to the following:

• Are the concepts of leadership and management the same?
• What are the similarities and differences between them?
• Is it necessary for an organization to have both leadership and management?

Support your answer with specific examples or by citing a credible source.

Write your initial response in a minimum of 300 words. All written assignments and responses should follow APA rules for attributing sources.

By Friday, August 30, 2013, post your response to the appropriate Discussion Area.

 

Assignment 3: Leadership Challenges in Today’s Environment

There are some who argue that leaders face unprecedented demands as we enter the 21st century. The pace of organizations is faster than ever due to technology advances and impatience in stakeholder groups. There is increased diversity due to globalization. The workforce is more nomadic; few people today spend their entire careers in a single company. This puts a lot of pressure on leaders and may demand new or evolved competencies.

Using the module readings,  University online library resources, and the Internet, including general organizational sources like the Wall Street Journal, BusinessWeek, or Harvard Business Review, research into the demands facing 21st century leaders. Then, respond to the following:

• What are the challenges facing leaders in today’s environment? Consider both internal and external challenges.
• Describe the impact of those challenges on today’s leaders. Explain how leaders need to respond to them.
• Discuss at least three–four core competencies that you think leaders need to be effective in in today’s environment. Explain how these competencies will address the challenges you identified.
• Use examples where applicable and also consider the “Five practices” of Kouzes and Posner (2007) in your response.

Support your positions by citing at least two sources from your research.

Write your initial response in a minimum of 300 words. Apply APA standards to citation of sources.

 

By Saturday, August 31, 2013, post your response to the appropriate Discussion Area

· From the textbook, Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007, read the following chapters:

 

· The five practices of exemplary leadership

· Credibility is the foundation of leadership

· Leadership is everyone’s business

 

 

1 THE FIVE PRACTICES OF EXEMPLARY LEADERSHIP

“Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.”

Alan Keith, Genentech

“When I walked in the door on my first day,” Dick Nettell told us, “we had four hundred people working really, really hard, but they weren’t winning. We had people who were walking around looking like they ran over their dogs on the way to work. It was very, very sad.” As the new site executive for Bank of America’s Consumer Call Center in Concord, California, Dick found “rep scores” (the key performance measure) 21 percentage points behind the top performing call center and 18 points behind the next lowest performer. Fifty-five percent of employees felt that they were in an environment in which they could not speak their minds, and 50 percent believed that nothing was going to happen even if they did.1

It’s Dick’s firm belief that “everybody wants to win. Everybody wants to be successful. Everybody comes to work trying to make a difference.” But the call center employees suffered from “management whiplash.” The constant turnover in leadership and changes in priorities had been sending them down the path of poor performance. Dick said that when he started asking about the comparisons with other centers, “All I heard were the reasons why we couldn’t do this or that. If there were an Olympic excuse-making team, we would be gold medallists. People were very disempowered.” So Dick set out to change all that.

Dick set aside three entire days just for talking and listening to people. He gathered as much data as he could from these interviews and elsewhere. “If you keep your eyes open and periodically actually shut your mouth, and you have the courage to turn the mirror around on yourself,” said Dick, “it’s amazing what you can learn and how you can change things.”

He met with the call center’s senior managers and support staff in a large basement conference room and presented his findings. Then he handed out stacks of Post-it notepads and asked the group to write down five adjectives that described the center at that time. He repeated this process two more times, asking them to write down five adjectives that described how they thought their peers would describe the center and what they thought the associates, or customer service representatives, would say. Each time, their responses were written on an easel. It was a bleak picture. Words such as demotivated, volatile, imprecise, failing, disorganized, frustrating, not fun, constantly changing priorities, lack of appreciation, too many changes, and not enough coaching appeared on the lists. Even so, there were some positive comments about the people, such as dedicated, energetic, and supportive.

Then Dick asked them to go through the process once more, this time describing how they would like the call center to look in the future. “If you could wave a magic wand,” he asked the group, “in three to five years how would you like the center to be described?” The language they used to express their hopes, dreams, and aspirations painted a dramatically different picture from the one Dick found when he came aboard: amazing results, world class, a model for others to follow, a unique place to work, partnership, opportunities to learn and grow, true passion for our customers. Armed with this list of aspirations Dick and the management team began to craft a vision, mission, and set of values (which they called commitments). The resulting vision and mission read as follows:

OUR VISION OF THE FUTURE …

• We will be seen as a World Class Call Center and the standard against which others are measured—one with true passion for our customers.

• We will be acknowledged across the franchise as a model to follow, where every associate truly feels like a partner, has an equal opportunity to learn and grow, and understands their personal impact on our overall success.

• We will be viewed as a unique place to work, an organization that drives amazing results while having fun along the way.

OUR MISSION IS …

• To provide an experience that consistently “delights” our customers every single minute of every single day.

Over the next six weeks Dick held twenty-two forty-five minute state-of-the-center meetings with every team in the call center. “Here’s our vision, here’s what we’re committed to,” Dick would say to begin raising awareness of the issues, and then he’d ask, “Does this make sense to you? Is there something we need to change?” Then Dick told them about his own beginnings in Bank of America. He told them about how he started as a garage helper, worked his way up to be an automobile fleet manager, and eventually found his way into senior management. He told them, “I’m here at the call center because I want to be here,” and then related the story of how he had retired as the bank’s corporate services executive and decided to come back.

He said he woke up early one morning and realized that something was missing in his life. “At four in the morning you can’t lie to yourself,” he told them. “I realized that I’m really passionate about working with folks to get them to think differently about themselves. What was missing in my life was the ability to make a difference in people’s lives. It may sound corny, but I love to be able to work with people so that they can be the best they can be.” So Dick reached out to an executive he admired at the bank and asked about the chance of coming back. He got his wish when the opportunity to take on the Concord Call Center came along. Everyone in those state-of-the-center meetings, when they heard Dick’s story, realized that they had a champion on their side, a genuine leader who would enable them to turn their aspirations into actuality. They understood that Dick was there because he wanted to be there, not because the call center was on some career path to a higher position.

At those meetings Dick challenged everyone to take the initiative to make the new vision a reality. “You’ve lost the right to suffer in silence,” he said. “If you have an issue, open your mouth. I want you to talk to your managers, talk to my communications person, talk to me, or visit the “Ask Dick” section of the company’s intranet. Think about sitting in my chair. Give me ideas and proposals that I have the authority to approve.” Dick made it clear that from then on changing the call center was everybody’s business. “You have to be a part of this,” he said. “You want to be like a partner, then you’ve signed up for some responsibility in the process.” Dick’s challenge made it clear that things were going to change, and that the associates were empowered to act. “Everybody should have that equal opportunity to succeed and learn and know what it feels like to win,” Dick said, and “once you’ve done that—you’ve got people well positioned—get the hell out of their way and watch them rock and roll.”

To maintain the momentum, Dick began holding monthly “town hall” meetings. To make that happen he had to challenge the way things are normally done—it’s tough to pull call center people off the phone, even once a month. So they do two half-hour town halls each month, with half the center attending one, and the other half coming to the other. At each one, Dick constantly reiterates the mission, commitments, and vision—that’s a ritual with him. He gives a “you said, we did” report. Then there’s a discussion of current initiatives. For example, the month that we visited Dick, the new-hire onboarding process, the upcoming associate survey, and clothing guidelines were the topics of discussion. Following the initiative discussion is a report on the month’s performance. Each town hall concludes with “Celebrating Heroes,” a time for individuals who have made significant contributions to the center to be publicly recognized. And it’s not just Dick and his managers doing the recognizing. Associates also get time on the agenda to celebrate peers for living the values of the bank and keeping the commitments they’ve made to each other.

Recognition and celebration are a big deal to Dick. When he arrived at the Concord Call Center, very little of either was going on, so Dick put it on the agenda. Every Wednesday, for example, is “Pride Day,” when people wear company logo merchandise and you see a lot of red, blue, and white bank shirts. Although Pride Day was started before Dick arrived, he added new dimensions to the ritual. For starters, there’s the fifteen-minute spirit huddle; once a month every one of the team managers has to bring at least one associate with them, and in the huddles the managers recognize their local heroes. You’ll also see people wearing spirit beads. Dick came up with the idea because he wanted something really visible yet inexpensive enough that they could do a lot of it. The beads come in different colors, but on every string hangs a medallion with the same word: PRIDE.

PRIDE is Dick’s motto; it stands for Personal Responsibility In Delivering Excellence. That medallion suspended from the gold, blue, and green beads symbolizes what all the values, vision, and mission are about to Dick. They’re about taking pride in what you do. And when Dick conducts quarterly coaching sessions with each of his direct reports, they talk about PRIDE, and mission, and vision, and values. Another thing they talk about is how other people see them as leaders. “When we turn that mirror around,” he asks, “is there a match to what we’re saying? How do we spend our time every day? Do our goals match our commitments?” It’s in these discussions that Dick gets down to aligning actions with the values of the center.

Despite the tremendous progress they’ve made in becoming a model call center, and toward keeping the commitments that they’ve made to each other, Dick still believes that “every day is opening day.” He said, “It doesn’t matter what you did yesterday. Each and every decision and action is a moment of truth. You say something and what do people see? The two have to be aligned. It’s all about the video matching the audio.”

And for Dick the challenge continues, for he knows that every day will present him and the organization with some wonderful chance to try something new: “In today’s environment, if you want to be successful, doing things the same way just won’t get it done, period. Expectations continue to be raised, by our shareholders, by our managers, and by our customers. And if we’re not willing to be innovative and do things differently, we’re going to have the competition pass us like we’re sitting still on the freeway.”

Dick demonstrates exemplary leadership skills, and he shows us how leaders can seize the opportunities to bring out the best in others and guide them on the journey to accomplishing exceptionally challenging goals. He serves as a role model for leaders who want to get extraordinary things done in organizations.

LEADERSHIP OPPORTUNITIES ARE EVERYWHERE

Leadership can happen anywhere, at any time. It can happen in a huge business or a small one. It can happen in the public, private, or social sector. It can happen in any function. It can happen at home, at school, or in the community. The call to lead can come at four o’clock in the morning, or it can come late at night. The energy and motivation to lead can come in ways you’d least expect. While Dick Nettell’s most recent personal-best leadership grew out of a need to again challenge himself, Claire Owen’s leadership best grew out of necessity.

Leadership can happen anywhere, at any time .

Claire Owen is founder and Leader of Vision & Values of the SG Group in London, England, a 110-person firm that’s a collection of four businesses designed to meet the marketing and human resource recruitment needs of agencies and corporations. Stopgap, the United Kingdom’s first specialist freelance marketing agency and the SG Group’s original business, began because the marketing agency Claire was working in at the time went into receivership. She had a four-week-old baby and a huge mortgage, and was wondering what was going to happen next. But Claire was also worried about what would happen to her client, with whom they were midway through an important promotion. Her concern for her client overrode her personal concerns, so she called her contacts there, told them what was happening, and agreed on what they were going to do.

“I said to the client, ‘Look, you are up you-know-where without a paddle, but don’t panic. I will provide you with a stopgap.’ So the account manager and I provided them with a temporary solution, and finished off running the promotion. I thought at the end of that, gosh, there is something here, providing people with a temporary marketing solution. But I knew I didn’t want to be that temporary solution. I had had enough of printers, and creatives, and copywriters, so I thought maybe I could find other people to do the doing and I would just put them together with the client.”

When Stopgap opened its doors there wasn’t another business out there that was doing what Claire proposed. “We created the marketplace that we operate in,” she said. “When we started up, nobody was providing freelance marketers. You could get locum (temporary) doctors, teachers, lawyers, dentists, and vets. In most professions you could get a temp, interim, whatever you like, but you couldn’t in marketing.” The fact that there was no other business like hers was fine with Claire. “I hate the predictable,” she told us. “I hate doing things the way everyone else does. Whatever I do I like to do something different. I never wanted to be a me-too company from day one.”

Claire is very outspoken about her lack of respect for the traditional ways the recruitment industries have been run. “I had been a candidate myself, and I had been so mistreated by the recruitment consultancy that I wanted to challenge the rules the recruitment industry was playing by,” she told us. “If I could change those practices then I’d be proud to work in this field, and that is what I did.”

For Claire the most fundamental rules had to do with how they operated. “I wanted an open and transparent business that people could trust,” she said. “Whether it was about our fee structure, or the fact that we never send a candidate to a job before telling them everything about the organization, we operate by the principle of total transparency. We might say to a candidate, ‘This looks like a great job for your career, but the location is terrible.’”

The early days were tough. There were a lot of naysayers. Because Claire was so outspoken about her views of the industry, competitors were particularly harsh. Claire remembers one time when a competitor looked at her, wagged his finger, and told her that she would never be a success in the business. She just laughed and said, “You don’t know how wrong you are.”

Success for Claire is not defined by a specific revenue amount or a specific head count. Quite simply, Claire said, “I wanted to run a business that had a phenomenal reputation.” Her vision was that there would be Stopgaps all over the country, as there are Reeds (the U.K. leader in specialist recruitment, training, and HR consultancy)—an outlet on every corner so to speak. She knew they were never going to be a High Street recruitment consultancy, but she wanted Stopgap to be everywhere and to be a company that people wanted to do business with. Claire said that she’s not a dreamer, but closer to the truth is that she is living her dream every day. For her the future is now. Rather than waiting to run the business the way she thinks it should be run, she’s bringing it to life every day of the week.

A clear set of values guides the daily decisions and actions that Claire and her staff make. These values came from walking in the shoes of her staff and their candidates. These wouldn’t work, however, if they weren’t shared values. As Claire told us, “People have said to me time and time again, ‘I wouldn’t work for any other recruitment consultancy. The only reason I’m sitting here is because I like these values. They’re the same as mine.’”

“That’s music to my ears,” Claire said. “We’re not everybody’s cup of tea. People come and work for us because they want to make a difference to people. They want to help people. It’s what they do.”

“We are a very, very candidate-driven business,” Claire told us. But even more important to her than the candidate is her staff. She fervently believes that if you take care of your staff, they will take care of the candidate; if the staff takes care of the candidate, the candidate will take care of the client; and if the candidate takes care of the client, the client will return to the SG Group for more business. Claire puts her staff first, knowing that they are the ones that ultimately determine the reputation of the company.

As you’d expect, staff turnover at the SG Group is extremely low. People rarely leave the business, and if they do they are always welcomed back should they choose to return. “Friendship is the glue that keeps people here. Why would I want to leave when my best mates work with me? Someone once said to me, ‘Don’t take this the wrong way, Claire, but coming to work is a bit like going to a coffee morning.’ I asked her what she meant, and she said, ‘I am with people I like, and we can socialize. And yes, we do the job.’ I thought that was wonderful. They love coming to work because of the people that are here.”

The values of helping and caring for clients and staff are by no means permission to coddle people and allow them to do whatever they want. Claire is very clear that she expects the values to be lived, not just talked about. They are as much a discipline as any other operational values. “If you want customers to have a certain experience,” says Claire, “you have got to have people who can deliver on that experience. It’s a darn sight easier if you employ people who have the values that you want to give your customers.”

Clearly the SG Group values aren’t just posters on the wall—they are the guidelines the group uses in everything they do. For example, there is the “First Tuesday in the Month” meeting. It’s actually never held on the first Tuesday, but that’s what it was called when they were first held and the name has stuck. It happens once a month from 9:00 a.m. to 10:00 a.m., and everybody comes. In that meeting they share the company’s financials. Everybody learns what the business turned over, and the profit made or loss taken. They talk about where the business has come from, so people don’t forget about their important clients. They share any marketing that’s going on. They share a lot of people things—who’s joining, who’s leaving, who’s got an anniversary this month, and anything else that affects staff. And they always have the “grapevine”—a time when people can ask about things they might have heard about and want to know if it’s really happening. They film the meeting, so if someone has to miss it they can watch it on DVD.

Then there’s the Friday meeting. It’s a look back at the week, a sharing of good things and bad things that went on during the week. There’s also the Thursday Breakfast Club, which happens every other Thursday. That’s a forum for consultants to talk about candidates and clients, and to just share in depth the issues they’re having. Notes from these meetings are often posted in the lavatory so that they are visible at all times—you never know when you might come up with a solution to someone’s problem. Finally, there is a staff newsletter that goes out every other week for more personal needs, like someone wanting details of a great Mexican restaurant, a good plumber, or a flatmate.

Being physically present is important for Claire. She asked her staff what they wanted from her, and they told her “that they just wanted to see more of me, to have time to talk to me, to see me wandering around.” Claire radiates energy. When you’re around her you have no doubt that she cares deeply about the business, and, in particular, about the people in the business. Claire fully understands the potency of her physical presence. “You see that I get excited about things,” she pointed out to us—not that there was any doubt—“and people go, ‘Well, Claire is excited by it, so I’m going to get excited by it. She believes it and she thinks it is going to be great—well I think it’s going to be great.’ That’s really all I do.”

Claire also realizes that if her enthusiasm isn’t genuine, it’s going to have a negative effect. “If it’s an act,” she said, “they’ll see right through it. People really respect you for who you are, and they don’t want you to be someone you are not. They prefer to see who you are, the real you.”

The SG Group has a positively charged atmosphere that is fueled by numerous recognitions and celebrations. These are the informal kinds at which people toast personal successes, anniversaries, and births of babies. Every month staff members nominate people who have gone the extra mile. Anybody can nominate anybody. Every month all the nominations are considered, 99 percent are approved, and every winner gets a silver envelope placed on their desk thanking them for going the extra mile and presenting usually between 25 and 50 Stopgap Points. Each point is worth about £1, and they can convert the points into whatever they want to spend it on. The SG Group also has a very flexible benefits scheme called “Mind, Body, Soul.” Nothing is formal, and staff create things for themselves. The whole idea is that each person is different and they can customize the plan to fit their needs. For some it’s a gym membership, for others it’s health insurance, and for others it’s personal coaching. The entire scheme celebrates the individuality of each person.

The marketplace for freelance marketers has grown more and more competitive.2 “You can never get complacent,” Claire said. “As a business we are always, always thinking, ‘What else can we do to stay ahead?’” But something that won’t change is Claire Owen’s leadership philosophy. “We are human beings,” she said. “We don’t have employees. We don’t have staff. We have people, and people have emotions, and people have needs. If you are happy you do a better job. If you are excited about the business, and if you are excited about where it is going and what is happening in it, then there is a buzz, a physical buzz. It’s my job to create that kind of place.”

THE FIVE PRACTICES OF EXEMPLARY LEADERSHIP

Since 1983 we’ve been conducting research on personal-best leadership experiences, and we’ve discovered that there are countless examples of how leaders, like Dick and Claire, mobilize others to get extraordinary things done in virtually every arena of organized activity. We’ve found them in profit-based firms and nonprofits, manufacturing and services, government and business, health care, education and entertainment, and work and community service. Leaders reside in every city and every country, in every position and every place. They’re employees and volunteers, young and old, women and men. Leadership knows no racial or religious bounds, no ethnic or cultural borders. We find exemplary leadership everywhere we look.

From our analysis of thousands of personal-best leadership experiences, we’ve discovered that ordinary people who guide others along pioneering journeys follow rather similar paths. Though each experience we examined was unique in expression, every case followed remarkably similar patterns of action. We’ve forged these common practices into a model of leadership, and we offer it here as guidance for leaders as they attempt to keep their own bearings and steer others toward peak achievements.

As we looked deeper into the dynamic process of leadership, through case analyses and survey questionnaires, we uncovered five practices common to personal-best leadership experiences. When getting extraordinary things done in organizations, leaders engage in these Five Practices of Exemplary Leadership:

• Model the Way

• Inspire a Shared Vision

• Challenge the Process

• Enable Others to Act

• Encourage the Heart

The Five Practices—which we discuss briefly in this chapter and then in depth in Chapters Three through Twelve—aren’t the private property of the people we studied or of a few select shining stars. Leadership is not about personality; it’s about behavior. The Five Practices are available to anyone who accepts the leadership challenge. And they’re also not the accident of a unique moment in history. The Five Practices have stood the test of time, and our most recent research confirms that they’re just as relevant today as they were when we first began our investigation more than twenty-five years ago.

Leadership is not about personality; it’s about behavior.

Model the Way

Titles are granted, but it’s your behavior that wins you respect. As Tom Brack, with Europe’s SmartTeam AG, told us, “Leading means you have to be a good example, and live what you say.” This sentiment was shared across all the cases that we collected. Exemplary leaders know that if they want to gain commitment and achieve the highest standards, they must be models of the behavior they expect of others. Leaders model the way.

To effectively model the behavior they expect of others, leaders must first be clear about guiding principles. They must clarify values. As Lindsay Levin, chairman for Whites Group in England, explained, “You have to open up your heart and let people know what you really think and believe. This means talking about your values.” Leaders must find their own voice, and then they must clearly and distinctively give voice to their values. As the personal-best stories illustrate, leaders are supposed to stand up for their beliefs, so they’d better have some beliefs to stand up for. But it’s not just the leader’s values that are important. Leaders aren’t just representing themselves. They speak and act on behalf of a larger organization. Leaders must forge agreement around common principles and common ideals.

Eloquent speeches about common values, however, aren’t nearly enough. Leaders’ deeds are far more important than their words when one wants to determine how serious leaders really are about what they say. Words and deeds must be consistent. Exemplary leaders go first. They go first by setting the example through daily actions that demonstrate they are deeply committed to their beliefs. As Prabha Seshan, principal engineer for SSA Global, told us, “One of the best ways to prove something is important is by doing it yourself and setting an example.” She discovered that her actions spoke volumes about how the team needed to “take ownership of things they believed in and valued.” There wasn’t anything Prabha asked others to do that she wasn’t willing to do herself, and as a result, “while I always trusted my team, my team in turn trusted me.” For instance, she wasn’t required to design or code features but by doing some of this work she demonstrated to others not only what she stood for but also how much she valued the work they were doing and what their end user expected from the product.

The personal-best projects we heard about in our research were all distinguished by relentless effort, steadfastness, competence, and attention to detail. We were also struck by how the actions leaders took to set an example were often simple things. Sure, leaders had operational and strategic plans. But the examples they gave were not about elaborate designs. They were about the power of spending time with someone, of working side by side with colleagues, of telling stories that made values come alive, of being highly visible during times of uncertainty, and of asking questions to get people to think about values and priorities.

Modeling the way is about earning the right and the respect to lead through direct involvement and action. People follow first the person, then the plan.

Inspire a Shared Vision

When people described to us their personal-best leadership experiences, they told of times when they imagined an exciting, highly attractive future for their organization. They had visions and dreams of what could be. They had absolute and total personal belief in those dreams, and they were confident in their abilities to make extraordinary things happen. Every organization, every social movement, begins with a dream. The dream or vision is the force that invents the future. Leaders inspire a shared vision. As Mark D’Arcangelo, system memory product marketing manager at Hitachi Semiconductor, told us about his personal-best leadership experience, “What made the difference was the vision of how things could be and clearly painting this picture for all to see and comprehend.”

Leaders gaze across the horizon of time, imagining the attractive opportunities that are in store when they and their constituents arrive at a distant destination. They envision exciting and ennobling possibilities. Leaders have a desire to make something happen, to change the way things are, to create something that no one else has ever created before. In some ways, leaders live their lives backward. They see pictures in their mind’s eye of what the results will look like even before they’ve started their project, much as an architect draws a blueprint or an engineer builds a model. Their clear image of the future pulls them forward. Yet visions seen only by leaders are insufficient to create an organized movement or a significant change in a company. A person with no constituents is not a leader, and people will not follow until they accept a vision as their own. Leaders cannot command commitment, only inspire it.

Leaders have to enlist others in a common vision. To enlist people in a vision, leaders must know their constituents and speak their language. People must believe that leaders understand their needs and have their interests at heart. Leadership is a dialogue, not a monologue. To enlist support, leaders must have intimate knowledge of people’s dreams, hopes, aspirations, visions, and values. Evelia Davis, merchandise manager for Mervyns, told us that while she was good at telling people where they were going together, she also needed to do a good job of explaining why they should follow her, how they could help reach the destination, and what this meant for them. As Evelia put it, “If you don’t believe enough to share it, talk about it, and get others excited about it then it’s not much of a vision!”

Leaders breathe life into the hopes and dreams of others and enable them to see the exciting possibilities that the future holds. Leaders forge a unity of purpose by showing constituents how the dream is for the common good. Leaders stir the fire of passion in others by expressing enthusiasm for the compelling vision of their group. Leaders communicate their passion through vivid language and an expressive style.

Whatever the venue, and without exception, the people in our study reported that they were incredibly enthusiastic about their personal-best projects. Their own enthusiasm was catching; it spread from leader to constituents. Their belief in and enthusiasm for the vision were the sparks that ignited the flame of inspiration.

Challenge the Process

Every single personal-best leadership case we collected involved some kind of challenge. The challenge might have been an innovative new product, a cutting-edge service, a groundbreaking piece of legislation, an invigorating campaign to get adolescents to join an environmental program, a revolutionary turnaround of a bureaucratic military program, or the start-up of a new plant or business. Whatever the challenge, all the cases involved a change from the status quo. Not one person claimed to have achieved a personal best by keeping things the same. All leaders challenge the process.

Leaders venture out. None of the individuals in our study sat idly by waiting for fate to smile upon them. “Luck” or “being in the right place at the right time” may play a role in the specific opportunities leaders embrace, but those who lead others to greatness seek and accept challenge. Jennifer Cun, in her role as a budget analyst with Intel, noted how critical it is for leaders “to always be looking for ways to improve their team, taking interests outside of their job or organization, finding ways to stay current of what the competition is doing, networking, and taking initiative to try new things.”

Leaders are pioneers. They are willing to step out into the unknown. They search for opportunities to innovate, grow, and improve. But leaders aren’t the only creators or originators of new products, services, or processes. In fact, it’s more likely that they’re not: innovation comes more from listening than from telling. Product and service innovations tend to come from customers, clients, vendors, people in the labs, and people on the front lines; process innovations, from the people doing the work. Sometimes a dramatic external event thrusts an organization into a radically new condition. Leaders have to constantly be looking outside of themselves and their organizations for new and innovative products, processes, and services. “Mediocrity and status quo will never lead a company to success in the marketplace,” is what Mike Pepe, product marketing manager at O3 Entertainment, told us. “Taking risks and believing that taking them is worthwhile,” he went on to say, “are the only way companies can ‘jump’ rather than simply climb the improvement ladder.”

When it comes to innovation, the leader’s major contributions are in the creation of a climate for experimentation, the recognition of good ideas, the support of those ideas, and the willingness to challenge the system to get new products, processes, services, and systems adopted. It might be more accurate, then, to say that leaders aren’t the inventors as much as they are the early patrons and adopters of innovation.

Leaders know well that innovation and change involve experimenting and taking risks. Despite the inevitability of mistakes and failures leaders proceed anyway. One way of dealing with the potential risks and failures of experimentation is to approach change through incremental steps and small wins. Little victories, when piled on top of each other, build confidence that even the biggest challenges can be met. In so doing, they strengthen commitment to the long-term future. Not everyone is equally comfortable with risk and uncertainty. Leaders must pay attention to the capacity of their constituents to take control of challenging situations and become fully committed to change. You can’t exhort people to take risks if they don’t also feel safe.

It would be ridiculous to assert that those who fail over and over again eventually succeed as leaders. Success in any endeavor isn’t a process of simply buying enough lottery tickets. The key that unlocks the door to opportunity is learning. Claude Meyer, with the Red Cross in Kenya, put it to us this way: “Leadership is learning by doing, adapting to actual conditions. Leaders are constantly learning from their errors and failures.” Life is the leader’s laboratory, and exemplary leaders use it to conduct as many experiments as possible. Try, fail, learn. Try, fail, learn. Try, fail, learn. That’s the leader’s mantra. Leaders are learners. They learn from their failures as well as their successes, and they make it possible for others to do the same.

Enable Others to Act

Grand dreams don’t become significant realities through the actions of a single person. It requires a team effort. It requires solid trust and strong relationships. It requires deep competence and cool confidence. It requires group collaboration and individual accountability. To get extraordinary things done in organizations, leaders have to enable others to act.

After reviewing thousands of personal-best cases, we developed a simple test to detect whether someone is on the road to becoming a leader. That test is the frequency of the use of the word we. In our interviews, we found that people used we nearly three times more often than I in explaining their personal-best leadership experience. Hewlett-Packard’s Angie Yim was the technical IT team leader on a project involving core team members from the United States, Singapore, Australia, and Hong Kong. In the past, Angie told us, she “had a bad habit of using the pronoun I instead of we,” but she learned that people responded more eagerly and her team became more cohesive when people felt part of the we. “This is a magic word,” Angie realized. “I would recommend that others use it more often.”

Leaders foster collaboration and build trust. This sense of teamwork goes far beyond a few direct reports or close confidants. They engage all those who must make the project work—and in some way, all who must live with the results. In today’s virtual organizations, cooperation can’t be restricted to a small group of loyalists; it must include peers, managers, customers and clients, suppliers, citizens—all those who have a stake in the vision.

Leaders make it possible for others to do good work. They know that those who are expected to produce the results must feel a sense of personal power and ownership. Leaders understand that the command-and-control techniques of traditional management no longer apply. Instead, leaders work to make people feel strong, capable, and committed. Leaders enable others to act not by hoarding the power they have but by giving it away. Exemplary leaders strengthen everyone’s capacity to deliver on the promises they make. As Kathryn Winters learned working with the communications department at NVIDIA Corporation, “You have to make sure that no one is outside the loop or uninvolved in all the changes that occur.” She continually ensures that each person has a sense of ownership for his or her projects. She seeks out the opinions of others and uses the ensuing discussion not only to build up their capabilities but also to educate and update her own information and perspective. “Inclusion (not exclusion),” she finds, “ensures that everyone feels and thinks that they are owners and leaders—this makes work much easier.” Kathryn realized that when people are trusted and have more discretion, more authority, and more information, they’re much more likely to use their energies to produce extraordinary results.

In the cases we analyzed, leaders proudly discussed teamwork, trust, and empowerment as essential elements of their efforts. A leader’s ability to enable others to act is essential. Constituents neither perform at their best nor stick around for very long if their leader makes them feel weak, dependent, or alienated. But when a leader makes people feel strong and capable—as if they can do more than they ever thought possible—they’ll give it their all and exceed their own expectations. Authentic leadership is founded on trust, and the more people trust their leader, and each other, the more they take risks, make changes, and keep organizations and movements alive. Through that relationship, leaders turn their constituents into leaders themselves.

Encourage the Heart

The climb to the top is arduous and long. People become exhausted, frustrated, and disenchanted. They’re often tempted to give up. Leaders encourage the heart of their constituents to carry on. Genuine acts of caring uplift the spirits and draw people forward. In his personal-best leadership experience, Ankush Joshi, the service line manager with Informix USA, learned that “writing a personal thank-you note, rather than sending an e-mail, can do wonders.” Janel Ahrens, marcom manager with National Semiconductor, echoed Ankush’s observation. Janel would make notes about important events in other people’s lives and then follow up with them directly after or simply wish them luck prior to an important event. Every person was “genuinely touched that I cared enough to ask them about how things are going.” She told us that in her organization “work relationships have been stronger since this undertaking.” Janel’s and Ankush’s experiences are testimony to the power of a “thank you.”

Recognizing contributions can be one-to-one or with many people. It can come from dramatic gestures or simple actions. One of the first actions that Abraham Kuruvilla took upon becoming CEO of the Dredging Corporation of India (a government-owned private-sector company providing services to all ten major Indian ports) was to send out to every employee a monthly newsletter (DCI News) that was full of success stories. In addition, he introduced, for the first time, a public-recognition program through which awards and simple appreciation notices were given out to individuals and teams for doing great work. Abraham made sure that people were recognized for their contributions, because he wanted to provide a climate in which “people felt cared about and genuinely appreciated by their leaders.”

It’s part of the leader’s job to show appreciation for people’s contributions and to create a culture of celebrating values and victories. In the cases we collected, we saw thousands of examples of individual recognition and group celebration. We’ve heard and seen everything from handwritten thank-yous to marching bands and “This Is Your Life”–type ceremonies.

Recognition and celebration aren’t about fun and games, though there is a lot of fun and there are a lot of games when people encourage the hearts of their constituents. Neither are they about pretentious ceremonies designed to create some phony sense of camaraderie. When people see a charlatan making noisy affectations, they turn away in disgust. Encouragement is, curiously, serious business. It’s how leaders visibly and behaviorally link rewards with performance. When striving to raise quality, recover from disaster, start up a new service, or make dramatic change of any kind, leaders make sure people see the benefit of behavior that’s aligned with cherished values. Leaders also know that celebrations and rituals, when done with authenticity and from the heart, build a strong sense of collective identity and community spirit that can carry a group through extraordinarily tough times.

LEADERSHIP IS A RELATIONSHIP

Our findings from the analysis of personal-best leadership experiences challenge the myth that leadership is something that you find only at the highest levels of organizations and society. We found it everywhere. These findings also challenge the belief that leadership is reserved for a few charismatic men and women. Leadership is not a gene and it’s not an inheritance. Leadership is an identifiable set of skills and abilities that are available to all of us. The “great person”—woman or man—theory of leadership is just plain wrong. Or, we should say, the theory that there are only a few great men and women who can lead others to greatness is just plain wrong. Likewise, it is plain wrong that leaders only come from large, or great, or small, or new organizations, or from established economies, or from start-up companies. We consider the women and men in our research to be great, and so do those with whom they worked. They are the everyday heroes of our world. It’s because there are so many—not so few—leaders that extraordinary things get done on a regular basis, especially in extraordinary times.

To us this is inspiring and should give everyone hope. Hope, because it means that no one needs to wait around to be saved by someone riding into town on a white horse. Hope, because there’s a generation of leaders searching for the opportunities to make a difference. Hope, because right down the block or right down the hall there are people who will seize the opportunity to lead you to greatness. They’re your neighbors, friends, and colleagues. And you are one of them, too.

There’s still another crucial truth about leadership. It’s something that we’ve known for a long time, but we’ve come to prize even more today. In talking to leaders and reading their cases, there was a very clear message that wove itself throughout every situation and every action. The message was: leadership is a relationship. Leadership is a relationship between those who aspire to lead and those who choose to follow. It’s the quality of this relationship that matters most when we’re engaged in getting extraordinary things done. A leader-constituent relationship that’s characterized by fear and distrust will never, ever produce anything of lasting value. A relationship characterized by mutual respect and confidence will overcome the greatest adversities and leave a legacy of significance.

Leadership is a relationship.

Evidence abounds for this point of view. For instance, in examining the critical variables for executive success in the top three jobs in large organizations, Jodi Taylor and Valerie Sessa at the Center for Creative Leadership found the number one success factor to be “relationships with subordinates.”3 We were intrigued to find that even in this nanosecond world of e-everything, opinion is consistent with the facts. In an online survey, respondents were asked to indicate, among other things, which would be more essential to business success in five years—social skills or skills in using the Internet. Seventy-two percent selected social skills; 28 percent, Internet skills.4 Internet literati completing a poll online realize that it’s not the web of technology that matters the most, it’s the web of people.

Similar results were found in a study by Public Allies, an AmeriCorps organization dedicated to creating young leaders who can strengthen their communities. Public Allies sought the opinions of eighteen- to thirty-year-olds on the subject of leadership. Among the items was a question about the qualities that were important in a good leader. Topping the respondents’ list is “Being able to see a situation from someone else’s point of view.” In second place is “Getting along well with other people.”5

Success in leadership, success in business, and success in life have been, are now, and will continue to be a function of how well people work and play together. Success in leading will be wholly dependent upon the capacity to build and sustain those human relationships that enable people to get extraordinary things done on a regular basis.

THE TEN COMMITMENTS OF LEADERSHIP

Embedded in The Five Practices of Exemplary Leadership are behaviors that can serve as the basis for learning to lead. We call these The Ten Commitments of Leadership (Table 1.1). These ten commitments serve as the guide for our discussion of how leaders get extraordinary things done in organizations and as the structure for what’s to follow. We’ll fully explore each of these commitments in Chapters Three through Twelve. Before delving into the practices and commitments further, however, let’s consider leadership from the vantage point of the constituent. If leadership is a relationship, as we have discovered, then what do people expect from that relationship? What do people look for and admire in a leader? What do people want from someone whose direction they’d be willing to follow?

TABLE 1.1 THE FIVE PRACTICES AND TEN COMMITMENTS OF LEADERSHIP.

Practice

Commitment

Model the Way

1. Clarify values by finding your voice and affirming shared ideals.

2. Set the example by aligning actions with shared values.

Inspire a Shared Vision

3. Envision the future by imagining exciting and ennobling possibilities.

4. Enlist others in a common vision by appealing to shared aspirations.

Challenge the Process

5. Search for opportunities by seizing the initiative and by looking outward for innovative ways to improve.

6. Experiment and take risks by constantly generating small wins and learning from experience.

Enable Others to Act

7. Foster collaboration by building trust and facilitating relationships.

8. Strengthen others by increasing self-determination and developing competence.

Encourage the Heart

9. Recognize contributions by showing appreciation for individual excellence.

10. Celebrate the values and victories by creating a spirit of community.

(Kouzes 2)

Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007. <vbk:9780470633397#outline(1)>.

 

 

2 CREDIBILITY IS THE FOUNDATION OF LEADERSHIP

(Kouzes 27)

Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007. <vbk:9780470633397#outline(2)>.

“Leadership is in the eyes of other people; it is they who proclaim you as a leader.”

Carrie Gilstrap, Hewlett-Packard

Model the way, inspire a shared vision, challenge the process, enable others to act, and encourage the heart: these are the leadership practices that emerge from thousands of personal-best cases. But they paint only a partial picture. Leaders don’t get extraordinary things done all by themselves! The portrayal can be completed only when we add in what constituents expect from their leaders. With these brush strokes the picture takes on depth and vitality.

What leaders say they do is one thing; what constituents say they want and how well leaders meet these expectations is another. Because leadership is a reciprocal process between leaders and their constituents, any discussion of leadership must attend to the dynamics of this relationship. Strategies, tactics, skills, and practices are empty without an understanding of the fundamental human aspirations that connect leaders and constituents.

To balance our understanding of leadership, we investigated the expectations that constituents have of leaders. We asked constituents to tell us what they look for in a person that they would be willing to follow, someone who had the personal traits, characteristics, and attributes they wanted in a leader. Their responses both affirm and enrich the picture that emerged from our studies of personal leadership bests.

WHAT PEOPLE LOOK FOR AND ADMIRE IN LEADERS

We began our research on what constituents expect of leaders more than twenty-five years ago by surveying thousands of business and government executives. We asked the following open-ended question: “What values, personal traits, or characteristics do you look for and admire in a leader?”1 In response to that question, respondents identified several hundred different values, traits, and characteristics. Subsequent content analysis by several independent judges, followed by further empirical analyses, reduced these items to a list of twenty characteristics (each grouped with several synonyms for clarification and completeness).

From this list of twenty characteristics, we developed a survey questionnaire called “Characteristics of Admired Leaders.” We’ve administered this questionnaire to over seventy-five thousand people around the globe, and we update the findings continuously. We distribute a one-page checklist and ask respondents to select the seven qualities that they “most look for and admire in a leader, someone whose direction they would willingly follow.” We tell them that the key word in this question is willingly. What do they expect from a leader they would follow, not because they have to, but because they want to?

The results have been striking in their regularity over the years, and they do not significantly vary by demographical, organizational, or cultural differences. Wherever we’ve asked the question, it’s clear, as the data in Table 2.1 illustrate, that there are a few essential “character tests” someone must pass before others are willing to grant the designation leader.

Although every characteristic receives some votes, and therefore each is important to some people, what is most striking and most evident is that only four over time (with the exception of Inspiring in 1987) have always received over 60 percent of the votes. And these same four have consistently been ranked at the top across different countries, as shown by the data in Table 2.2.

What people most look for in a leader has been constant over time.

What people most look for in a leader (a person that they would be willing to follow) has been constant over time. And our research documents this consistent pattern across countries, cultures, ethnicities, organizational functions and hierarchies, gender, educational, and age groups. For people to follow someone willingly, the majority of constituents believe the leader must be

• Honest

• Forward-looking

• Inspiring

• Competent

These investigations of desired leader attributes demonstrate consistent and clear relationships with the stories we heard people tell us about their personal-best leadership experiences. The Five Practices of Exemplary Leadership and the behaviors of people whom others think of as exemplary leaders are complementary perspectives on the same subject. When they’re performing at their peak, leaders are doing more than just getting results. They’re also responding to the expectations of their constituents.2

TABLE 2.1 CHARACTERISTICS OF ADMIRED LEADERS.

Percentage of Respondents Selecting Each Characteristic

Characteristic

2007 edition

2002 edition

1995 edition

1987 edition

HONEST

89

88

88

83

FORWARD-LOOKING

71

71

75

62

INSPIRING

69

65

68

58

COMPETENT

68

66

63

67

Intelligent

48

47

40

43

Fair-minded

39

42

49

40

Straightforward

36

34

33

34

Broad-minded

35

40

40

37

Supportive

35

35

41

32

Dependable

34

33

32

33

Cooperative

25

28

28

25

Courageous

25

20

29

27

Determined

25

24

17

17

Caring

22

20

23

26

Imaginative

17

23

28

34

Mature

15

17

13

23

Ambitious

16

21

13

21

Loyal

18

14

11

11

Self-Controlled

10

8

5

13

Independent

4

6

5

10

Note: These percentages represent respondents from six continents: Africa, North America, South America, Asia, Europe, and Australia. The majority of respondents are from the United States. Since we asked people to select seven characteristics, the total adds up to more than 100 percent.

TABLE 2.2 CROSS-CULTURAL COMPARISONS OF THE CHARACTERISTICS OF ADMIRED LEADERS.

Percentage of Respondents Selecting Each Characteristic

Country

Honest

Forward-Looking

Inspiring

Competent

Australia

93

83

73

59

Canada

88

88

73

60

Japan

67

83

51

61

Korea

74

82

55

62

Malaysia

95

78

60

62

Mexico

85

82

71

62

New Zealand

86

86

71

68

Singapore

72

76

69

76

Sweden, Denmark

84

86

90

53

United States

89

71

69

68

As we weave the themes of being honest, forward-looking, inspiring, and competent into the text of the subsequent chapters on The Five Practices, you’ll see in more detail how exemplary leaders respond to the expectations of their constituents. For example, leaders cannot Model the Way without being seen as honest. The leadership practice of Inspire a Shared Vision involves being forward-looking and inspiring. When leaders Challenge the Process, they also enhance the perception that they’re dynamic. Trustworthiness, often a synonym for honesty, plays a major role in how leaders Enable Others to Act, as does the leader’s own competency. Likewise, leaders who recognize and celebrate significant accomplishments—who Encourage the Heart—show inspiration and positive energy, which increases their constituents’ understanding of the commitment to the vision and values. When leaders demonstrate capacity in all of The Five Practices, they show others they have the competence to get extraordinary things done.

Let’s take a closer look at each of the four attributes that have been selected by the majority of respondents since the early 1980s.

Honest

In almost every survey we’ve conducted, honesty has been selected more often than any other leadership characteristic; overall, it emerges as the single most important factor in the leader-constituent relationship. The percentages vary, but the final ranking does not. Since the very first time we conducted our studies honesty has been at the top of the list.

It’s clear that if people anywhere are to willingly follow someone—whether it’s into battle or into the boardroom, the front office or the front lines—they first want to assure themselves that the person is worthy of their trust. They want to know that the person is truthful, ethical, and principled. When people talk to us about the qualities they admire in leaders, they often use the terms integrity and character as synonymous with honesty. No matter what the setting, everyone wants to be fully confident in their leaders, and to be fully confident they have to believe that their leaders are individuals of strong character and solid integrity.3

We—all of us—don’t want to be lied to or deceived. We want to be told the truth. We want a leader who knows right from wrong. Sure, we want our team to win, but we don’t want to be led—better to say, misled—by someone who cheats in the process of attaining victory. It lowers our current and future motivational levels; we just won’t work as hard for a person or a cause once we’ve been tricked.

We want our leaders to be honest because their honesty is also a reflection upon our own honesty. Of all the qualities that people look for and admire in a leader, honesty is by far the most personal. More than likely this is also why it consistently ranks number one. It’s the quality that can most enhance or most damage our own personal reputations. If we follow someone who’s universally viewed as having an impeccable character and strong integrity, then we’re likely to be viewed the same. But if we willingly follow someone who’s considered dishonest, our own images are tarnished. And there’s perhaps another, more subtle, reason why honesty is at the top. When we follow someone we believe to be dishonest, we come to realize that we’ve compromised our own integrity. Over time, we not only lose respect for the leader, we lose respect for ourselves.

Honesty is strongly tied to values and ethics. We appreciate people who know where they stand on important principles. We resolutely refuse to follow those who lack confidence in their own beliefs. We simply don’t trust people who can’t or won’t disclose a clear set of values, ethics, and standards and live by them.

Forward-Looking

A little more than 70 percent of our most recent respondents selected the ability to look ahead as one of their most sought-after leadership traits. People expect leaders to have a sense of direction and a concern for the future of the organization. This expectation directly corresponds to the ability to envision the future that leaders described in their personal-best cases. Whether we call that ability vision, a dream, a calling, a goal, or a personal agenda, the message is clear: leaders must know where they’re going if they expect others to willingly join them on the journey. They have to have a point of view about the future envisioned for their organizations, and they need to be able to connect that point of view to the hopes and dreams of their constituents.

By forward-looking, people don’t mean the magical power of a prescient visionary. The reality is far more down to earth. It’s the ability to imagine or discover a desirable destination toward which the company, agency, congregation, or community should head. Vision reveals the beckoning summit that provides others with the capacity to chart their course toward the future. As constituents, we ask that a leader have a well-defined orientation toward the future. We want to know what the organization will look like, feel like, and be like when it arrives at its destination in six quarters or six years. We want to have it described to us in rich detail so that we can select the proper route for getting there and know when we’ve arrived.

Clarity of vision into the distant future may be difficult to attain, but it’s essential that leaders seek the knowledge and master the skills necessary to envision what’s across the horizon. Compared to all the other leadership qualities constituents expect, this is the one that most distinguishes leaders from other credible people. Expecting leaders to be forward-looking doesn’t mean constituents want their leaders to set out on a solitary vision quest; people want to be engaged in the search for a meaningful future, as we will discuss in Chapters Five and Six. But this expectation does mean that leaders have a special responsibility to attend to the future of their organizations.4

Inspiring

People expect their leaders to be enthusiastic, energetic, and positive about the future. It’s not enough for a leader to have a dream. A leader must be able to communicate the vision in ways that encourage people to sign on for the duration and excite them about the cause. Although the enthusiasm, energy, and positive attitude of an exemplary leader may not change the content of work, they certainly can make the context more meaningful. Whatever the circumstances, when leaders breathe life into peoples’ dreams and aspirations, those people are much more willing to enlist in the movement.

Leaders must uplift their constituents’ spirits and give them hope if they’re to voluntarily engage in challenging pursuits. Enthusiasm and excitement are essential, and they signal the leader’s personal commitment to pursuing a dream. If a leader displays no passion for a cause, why should anyone else?

Inspiring leadership also speaks to constituents’ need to have meaning and purpose in their lives. Being upbeat, positive, and optimistic about the future offers people hope. This is crucial at any time, but in times of great uncertainty, leading with positive emotions is absolutely essential to moving people upward and forward.5 When people are worried, discouraged, frightened, and uncertain about the future, the last thing needed is a leader who feeds those negative emotions. Instead, they need leaders who communicate in words, demeanor, and actions that they believe their constituents will overcome. Emotions are contagious, and positive emotions resonate throughout an organization and into relationships with other constituents. To get extraordinary things done in extraordinary times, leaders must inspire optimal performance—and that can only be fueled with positive emotions.

Competent

To enlist in a common cause, people must believe that the leader is competent to guide them where they’re headed. They must see the leader as having relevant experience and sound judgment. If they doubt the person’s abilities, they’re unlikely to join in the crusade.

Leadership competence refers to the leader’s track record and ability to get things done. This kind of competence inspires confidence that the leader will be able to guide the entire organization, large or small, in the direction in which it needs to go. It doesn’t refer specifically to the leader’s abilities in the core technology of the operation. In fact, the type of competence demanded seems to vary more with the leader’s position and the condition of the organization. Although people demand a base level of understanding of the fundamentals of the industry, market, or professional service environment, they also know that leaders can’t be expected to be the most technically competent in their fields. Organizations are too complex and multifunctional for that ever to be the case. This is particularly true as people reach the more senior levels. For example, those who hold officer positions are definitely expected to demonstrate abilities in strategic planning and policymaking. If a company desperately needs to clarify its core competence and market position, a CEO who is savvy in competitive marketing may be perceived as a fine leader. But in the line function, where people expect guidance in technical areas, these same strategic marketing abilities will be insufficient. A leader on the line or at the point of customer or client contact will typically have to be more technically competent than someone less engaged in providing services or making products. What’s often most significant is that the leader takes the time to learn the business and to know the current operation.

Relevant experience is a dimension of competence, one that is different from technical expertise. Experience is about active participation in situational, functional, and industry events and activities and the accumulation of knowledge derived from participation. Experience correlates with one’s track record, and the broader one’s experience, the more likely he or she is to be successful across organizations and industries. An effective leader in a high-technology company, for example, may not need to be a master programmer but must understand the business implications of electronic data interchange, networking, and the Internet. A health care administrator with experience only in the insurance industry is more than likely doomed; the job needs extensive experience in the delivery of human services. There may be notable exceptions, but it is highly unlikely that a leader can succeed without both relevant experience and, most important, exceptionally good people skills.

PUTTING IT ALL TOGETHER: CREDIBILITY IS THE FOUNDATION

Honest, forward-looking, inspiring, and competent: these are the characteristics that have remained constant over more than twenty years of economic growth and recession, the surge in new technology enterprises, the birth of the World Wide Web, the further globalization of business and industry, the ever-changing political environment, and the expansion, bursting, and regeneration of the Internet economy. The relative importance of the most desired qualities has varied somewhat over time, but there has been no change in the fact that these are the four qualities people want most in their leaders. Whether they believe their leaders are true to these values is another matter, but what they would like from them has remained constant.

This list of four consistent findings is useful in and of itself—but there’s a more profound implication revealed by our research. Three of these four key characteristics make up what communications experts refer to as “source credibility.” In assessing the believability of sources of communication—whether newscasters, salespeople, physicians, or priests; whether business managers, military officers, politicians, or civic leaders—researchers typically evaluate them on three criteria: their perceived trustworthiness, their expertise, and their dynamism. Those who are rated more highly on these dimensions are considered to be more credible sources of information.6

Notice how strikingly similar these three characteristics are to the essential leader qualities of being honest, competent, and inspiring—three of the top four items selected in our survey. What we found in our investigation of admired leadership qualities is that more than anything, people want to follow leaders who are credible. Credibility is the foundation of leadership.

Credibility is The Foundation of Leadership.

Above all else, we as constituents must be able to believe in our leaders. We must believe that their word can be trusted, that they’re personally passionate and enthusiastic about the work that they’re doing, and that they have the knowledge and skill to lead.

We also must believe that they know where we’re headed and have a vision for the future. Adding forward-looking to what we expect from our leaders is what sets leaders apart from other credible individuals. Compared to other sources of information (for example, news anchors), leaders must do more than be reliable reporters of the news. Leaders make the news, interpret the news, and make sense of the news. We expect our leaders to have a point of view about the future. We expect them to articulate exciting possibilities. We want to be confident that our leaders know where they’re going.

Even so, although compelling visions are necessary for leadership, if the leader is not credible the message rests on a weak and precarious foundation. Leaders therefore must be ever-diligent in guarding their credibility. Their ability to take strong stands, to challenge the status quo, and to point us in new directions depends on their being highly credible. Leaders must never take their credibility for granted, regardless of the times or their positions. If leaders ask others to follow them to some uncertain future—a future that may not be realized in their lifetime—and if the journey is going to require sacrifice, isn’t it reasonable that constituents should believe in them? To believe in the exciting future possibilities leaders present, constituents must first believe in their leaders.

Because these findings about the characteristics of admired leaders—people we would willingly follow—have been so pervasive and so consistent, we’ve come to call this “The Kouzes-Posner First Law of Leadership”:

If you don’t believe in the messenger, you won’t believe the message.

Credibility Matters

At this point, some people might well say, “So what? I know people who are in positions of power, and I know people who are enormously wealthy, and I don’t find them credible. Does credibility really matter? Does it make a difference?”

It’s a legitimate concern, so we decided to study the question of whether or not credibility mattered. But rather than ask about the credibility of “top management” or “elected officials,” we decided to ask questions about people closer to home. We asked people to rate their immediate managers. As part of our quantitative research, using a behavioral measure of credibility, we asked organization members to think about the extent to which their immediate manager exhibited credibility-enhancing behaviors. In our studies we found that when people perceive their immediate manager to have high credibility, they’re significantly more likely to

• Be proud to tell others they’re part of the organization

• Feel a strong sense of team spirit

• See their own personal values as consistent with those of the organization

•Feel attached and committed to the organization

•Have a sense of ownership of the organization

When people perceive their manager to have low credibility, however, they’re significantly more likely to

• Produce only if they’re watched carefully

• Be motivated primarily by money

• Say good things about the organization publicly but criticize it privately

• Consider looking for another job if the organization experiences problems

• Feel unsupported and unappreciated

This evidence of the significant impact of leadership credibility on employee attitudes and behavior certainly provides clear dictates for organizational leaders. Credibility makes a difference, and leaders must take it personally. Loyalty, commitment, energy, and productivity depend on it.

Credibility goes far beyond employee attitudes. It influences customer and investor loyalty as well as employee loyalty. In an extensive study of the economic value of business loyalty, Frederick Reichheld and his Bain & Company colleagues found that businesses concentrating on customer, employee, and investor loyalty generate superior results compared with those engendering disloyalty. They found further that disloyalty can dampen performance by a stunning 25–50 percent.7 Loyalty is clearly responsible for extraordinary value creation. So what accounts for business loyalty? When they investigated this question, the researchers found that “The center of gravity for business loyalty—whether it be the loyalty of customers, employees, investors, suppliers, or dealers—is the personal integrity of the senior leadership team and its ability to put its principles into practice.”8 And what’s true for bricks-and-mortar companies is just as true for the clicks companies. “In fact, when Web shoppers were asked to name the attributes of e-tailers that were most important in earning their business, the number one answer was ‘a Web site I know and trust.’ All other attributes, including lowest cost and broadest selection, lagged far behind. Price does not rule the Web; trust does.”9

What Is Credibility Behaviorally?

The data confirm that credibility is the foundation of leadership. But what is credibility behaviorally? How do you know it when you see it?

We’ve asked this question of tens of thousands of people around the globe, and the response we get is essentially the same, regardless of how it may be phrased in one company versus another or one country versus another. Here are some of the common phrases people use to describe how they know credibility when they see it:

• “They practice what they preach.”

• “They walk the talk.”

• “Their actions are consistent with their words.”

• “They put their money where their mouth is.”

• “They follow through on their promises.”

• “They do what they say they will do.”

The last is the most frequent response. When it comes to deciding whether a leader is believable, people first listen to the words, then they watch the actions. They listen to the talk, and then they watch the walk. They listen to the promises of resources to support change initiatives, and then they wait to see if the money and materials follow. They hear the promises to deliver, and then they look for evidence that the commitments are met. A judgment of “credible” is handed down when words and deeds are consonant. If people don’t see consistency, they conclude that the leader is, at best, not really serious, or, at worst, an outright hypocrite. If leaders espouse one set of values but personally practice another, people find them to be duplicitous. If leaders practice what they preach, people are more willing to entrust them with their livelihood and even their lives.

This realization leads to a straightforward prescription for leaders on how to establish credibility. This is “The Kouzes-Posner Second Law of Leadership”:

DWYSYWD: Do What You Say You Will Do

This commonsense definition of credibility corresponds directly to one of The Five Practices of Exemplary Leadership identified in the personal-best cases. DWYSYWD has two essential elements: say and do. To be credible in action, leaders must be clear about their beliefs; they must know what they stand for. That’s the “say” part. Then they must put what they say into practice: they must act on their beliefs and “do.” The practice of Model the Way links directly to these two dimensions of people’s behavioral definition of credibility. This practice includes the clarification of a set of values and being an example of those values to others. This consistent living out of values is a behavioral way of demonstrating honesty and trustworthiness. People trust leaders when their deeds and words match.

To gain and sustain the moral authority to lead, it’s essential to Model the Way. Because of this important connection between words and actions, we’ve chosen to start our discussion of The Five Practices with a thorough examination of the principles and behaviors that bring Model the Way to life.

(Kouzes 27)

Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007. <vbk:9780470633397#outline(2)>.

 

13 LEADERSHIP IS EVERYONE’S BUSINESS

(Kouzes 336-337)

Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007. <vbk:9780470633397#outline(13)>.

 

“Don’t ever let anyone tell you that you can’t make a difference. If we all work on our little parts of the planet we will change the world.”

Tara Church, Quinn Emanuel Urquhart Oliver & Hedges LLP

Throughout this book we’ve told stories of ordinary people who’ve gotten extraordinary things done. We’ve talked about men and women from a variety of organizations, public and private, government and NGOs, high-tech and low-tech, small and large, schools and professional services. And we’ve talked with people from all over the globe, from all walks of life and ages. Chances are you haven’t heard of most of them. They’re not public figures, famous people, or mega-stars. They’re people who might live next door or work in the next cubicle over.

We’ve focused on everyday leaders because leadership is not about position or title. Leadership is not about organizational power or authority. It’s not about celebrity or wealth. It’s not about the family you are born into. It’s not about being a CEO, president, general, or prime minister. And it’s definitely not about being a hero. Leadership is about relationships, about credibility, and about what you do.

YOU ARE THE MOST IMPORTANT LEADER IN YOUR ORGANIZATION

If you’re a manager in an organization, to your direct reports you are the most important leader in your organization. You are more likely than any other leader to influence their desire to stay or leave, the trajectory of their careers, their ethical behavior, their ability to perform at their best, their drive to wow customers, their satisfaction with their jobs, and their motivation to share the organization’s vision and values.

If you’re a parent, teacher, coach, or community leader you are the person that’s setting the leadership example for young people. It’s not hip-hop artists, movie stars, or professional athletes they seek guidance from. You are the one they are most likely going to look to for the example of how a leader responds to competitive situations, handles crises, deals with loss, or resolves ethical dilemmas. It’s not someone else. It’s you.

The leaders who have the most influence on people are those who are the closest to them. You have to challenge the myth that leadership is about position and power. And, once challenged, people can come to see leadership in a whole new light. Yukari Huguenard, solutions product manager at KANA Software, told us how much she had changed her view of leadership after she had examined her assumptions:

I used to think leaders had to be at the top level of a large organization. With that view of leadership, the chasm between where I am and being a leader was uncrossable. Now, I see leaders leading a group of people of any size and leading at any level. You are a leader if you employ these five leadership practices because people around you want to follow. In that sense, I feel that I’m already a leader.

There’s no escape. Leadership is everyone’s business. No matter what your position is, you have to take responsibility for the quality of leadership your constituents get. You—and that means all of us—are accountable for the leadership you demonstrate. And, because you are the most important leader to those closest to you, the only choice you really have is whether or not to be the best leader you can be.

LEADERSHIP IS LEARNED

The notion that leadership is reserved for only a very few is reinforced every time someone asks, “Are leaders born or made?” Whenever we’re asked this question—which is almost every time we give a speech or conduct a class or workshop—our answer, always offered with a smile, is this: “Yes, of course, all leaders are born. We’ve never met a leader who wasn’t. So are all accountants, artists, athletes, parents, zoologists, you name it.” We’re all born. What we do with what we have before we die is up to us.

It’s just pure myth that only a lucky few can ever understand the intricacies of leadership.

It’s just pure myth that only a lucky few can ever understand the intricacies of leadership. Leadership is not a gene, and it’s not a secret code that can’t be deciphered by ordinary people. The truth is that leadership is an observable set of skills and abilities that are useful whether one is in the executive suite or on the front line, on Wall Street or Main Street, in any campus, community, or corporation. And any skill can be strengthened, honed, and enhanced, given the motivation and desire, along with practice and feedback, role models, and coaching.

It’s very curious—and revealing—that no one has ever asked us, “Can management be taught? Are managers born or made?” Why is it that management is viewed as a set of skills and abilities, while leadership is typically seen as a set of innate personality characteristics? It’s simple. People assume management can be taught. Because they do, hundreds of business schools have been established, and each year thousands of management courses are taught. By assuming that people can learn the attitudes, skills, and knowledge associated with good management practices, schools and companies have raised the caliber of managers. They’ve also contributed to the idea that good management skills are attainable.

The same can be said for leadership. In over twenty-five years of research, we’ve been fortunate to have heard and read the stories of thousands of ordinary people who’ve led others to get extraordinary things done. And there are millions more. It’s not the absence of leadership potential that inhibits the development of more leaders, it’s the persistence of the myth that leadership can’t be learned. This haunting myth is a far more powerful deterrent to leadership development than is the nature of the person or the basics of the leadership process.

The experience of Juan Gonzalez, industry solution manager at IBM, is typical of that of the leaders we’ve worked with around the world. Juan told us that The Five Practices of Exemplary Leadership were a good start for understanding that leadership was everyone’s business, and this approach offered him a new perspective on the world of human interaction by demystifying the notion of natural-born leaders and, if anything, making it more complex. The fact that leaders can learn to be leaders through self-awareness and effort opens the possibility that individuals have a choice about pursuing or ignoring the calling of leadership. Not everyone will be a leader of historical proportions; however, we all can and should assume leadership roles in our regular activities more often than not. The experience could be more rewarding and purposeful.

It’s our collective task to liberate the leader in each and every one of us. Rather than view leadership as an innate set of character traits—a self-fulfilling prophecy that dooms society to having only a few good leaders—it’s far healthier and more productive to assume that it’s possible for everyone to learn to lead. By assuming that leadership is learnable, we can discover how many good leaders there really are. Somewhere, sometime, the leader within each of us may get the call to step forward—for the school, the congregation, the community, the agency, the company, the union, or the family. By believing in yourself and your capacity to learn to lead, you make sure you’ll be prepared when that call comes.

Certainly, none of us should mislead people into believing that they can attain unrealistic goals. However, neither should we assume that only a few would ever attain excellence in leadership (or in any other human endeavor). Those who are most successful at bringing out the best in others are those who set achievable “stretch” goals and believe that they have the ability to develop the talents of others. Researchers note that effective leaders are constantly learning. They see all experiences as learning experiences, not just those sessions in a formal classroom or workshop. They’re constantly looking for ways to improve themselves and their organizations. By reading this book and engaging in other personal development activities, you’re demonstrating a predisposition to lead. Even if some people think that they’re not able to learn to lead, you must believe that you and they can. That’s where it all starts—with your own belief in yourself and in others.

LEADERS MAKE A DIFFERENCE

We regularly ask people in our classes and workshops to share a story about a leader they admire and whose direction they would willingly follow. Virtually everyone we’ve asked has been able to name at least one leader whose genuine influence they’ve felt. Sometimes it’s a well-known figure—perhaps someone out of the past who changed the course of history. Sometimes it’s a contemporary role model who serves as an example of success. Most often, however, it’s someone personally close to them who’s helped them learn—a parent, friend, member of the clergy, coach, teacher, manager.

When Verónica Guerrero of Winning Edge Research selected her father, José Luis Guerrero, as the leader she most admired, she underscored for us just how extraordinary those around us can be. She told the story of her father’s leadership in the Unión Nacional Sinarquista (UNS) back in the early 1940s. She related in detail what her father did and then summed up his influence with this remembered observation from José Luis: “I think the work that I did back then helped me extend myself and others to levels that I didn’t know I could reach…. If you feel strongly about anything, and it’s something that will ultimately benefit your community and your country, don’t hold back. Fear of failing or fear of what might happen doesn’t help anyone…. Don’t let anyone or anything push you back.”

Verónica closed her description of her father (who was then dying of pancreatic cancer) with this observation: “As I heard his story and I saw a sick, tired, and weak man, I couldn’t help thinking that our strength as humans and as leaders has nothing to do with what we look like. Rather, it has everything to do with what we feel, what we think of ourselves…. Leadership is applicable to all facets of life.” That’s precisely the point. If you are to become a better leader, you must first believe that leadership applies to you and that you can be a positive force in the world.

Yet there has never been universal acceptance of this proposition. Determinism and fatalism govern the minds of many. Some management scholars contend, in fact, that leaders have little impact on organizations, that other forces—internal or external to the organization—are the determinants of success.1 Others claim that the role of the leader is largely symbolic, even romantic, but not substantive.2 Our evidence, along with hundreds of other studies, suggests quite the contrary.3 Managers, individual contributors, volunteers, pastors, government administrators, teachers, school principals, nurses, salespeople, students, and other leaders who use The Five Practices of Exemplary Leadership more frequently than their counterparts are more effective. For example, they

• More often meet job-related demands

• More successfully represent their units to upper management

• Create higher-performing teams

• Increase sales and customer satisfaction levels

• Foster renewed loyalty and greater organizational commitment

• Increase motivation and the willingness to work hard

• Facilitate high patient satisfaction scores and more effectively meet family member needs

• Promote high degrees of involvement in schools

• Enlarge the size of their congregations

• Increase fundraising results and expand gift-giving levels

• Extend the range of their agency’s services

• Reduce absenteeism, turnover, and dropout rates

• Positively influence recruitment rates

People working with leaders who demonstrate The Five Practices of Exemplary Leadership are significantly more satisfied with the actions and strategies of their leaders; they feel more committed, excited, energized, influential, and powerful; and they are more productive. In other words, the more you engage in the practices of exemplary leaders, the more likely it is that you’ll have a positive influence on others in the organization.

Person to person and over time, leaders make a difference. If you want to have a significant impact on people, on communities, and on organizations, you’d be wise to invest in learning to become the very best leader you can. But first you too must believe that a leader lives within each of us.

FIRST LEAD YOURSELF

Leadership development is self-development. Engineers have computers; painters, canvas and brushes; musicians, instruments. Leaders have only themselves. The instrument of leadership is the self, and mastery of the art of leadership comes from mastery of the self. Self-development is not about stuffing in a whole bunch of new information or trying out the latest technique. It’s about leading out of what is already in your soul. It’s about liberating the leader within you. It’s about setting yourself free.

Leadership development is self-development.

The quest for leadership is first an inner quest to discover who you are. Through self-development comes the confidence needed to lead. Self-confidence is really awareness of and faith in your own powers. These powers become clear and strong only as you work to identify and develop them.

Learning to lead is about discovering what you care about and value. As you begin this quest toward leadership, you must wrestle with some difficult questions:

• How certain am I of my own conviction about the vision and values?

• What gives me the courage to continue in the face of uncertainty and adversity?

• How will I handle disappointments, mistakes, and setbacks?

• What are my strengths and weaknesses?

• What do I need to do to improve my abilities to move the organization forward?

• How solid is my relationship with my constituents?

• How can I keep myself motivated and encouraged?

• What keeps me from giving up?

• Am I the right one to be leading at this very moment? Why?

• How much do I understand about what is going on in the organization and the world in which it operates?

• How prepared am I to handle the complex problems that now confront my organization?

• What are my beliefs about how people ought to conduct the affairs of our organization?

• Where do I think the organization ought to be headed over the next ten years?

Honest answers to these questions (and to those that arise from them) tell you that you must open yourself to a more global view. The leader, being in the forefront, is usually the first to encounter the world outside the boundaries of the organization. The more you know about the world, the easier it is to approach it with assurance. Thus you should seek to learn as much as possible about the forces—political, economic, social, moral, or artistic—that affect the organization.

Honest answers tell you that to become as effective as possible you must improve your understanding of others and build your skills to mobilize people’s energies toward higher purposes. To be a leader, you must be interpersonally competent, and you must be able to develop the trust and respect of others.

Honest answers to these questions tell you that sometimes liberation is as uncomfortable as intrusion, but in the end when you discover them for yourself you know that what’s inside is what you found there and what belongs there. It’s not something put inside you by someone else; it’s what are your true gifts.

MORAL LEADERSHIP CALLS US TO HIGHER PURPOSES

Leadership practices per se are amoral. But leaders—the men and women who use the practices—are moral or immoral. There’s an ethical dimension to leadership that neither leaders nor constituents should take lightly. This is why we began our discussion of leadership practices with a focus on clarifying your values—on finding your authentic voice in a set of principles and ideals.

These you have to find for yourself and test against others. Attending to moral values will always direct your eyes to higher purposes. As you work to become all you can be, you can start to let go of petty self-interests. As you give back some of what you’ve been given, you can reconstruct your community. As you serve the values of freedom, justice, equality, caring, and dignity, you can constantly renew the foundations of democracy. As each of us takes individual responsibility for creating the world of our dreams, we can all participate in leading.

All exemplary leaders have wrestled with their souls. Such personal searching is essential in the development of leaders. You must resolve those dissonant internal chords. Extensive knowledge of history and the outside world increases your awareness of competing value systems, of the many principles by which individuals, organizations, and states can choose to function. You can’t lead others until you’ve first led yourself through a struggle with opposing values.

When you clarify the principles that will govern your life and the ends that you will seek, you give purpose to your daily decisions. A personal creed gives you a point of reference for navigating the sometimes-stormy seas of organizational life. Without such a set of beliefs, your life has no rudder, and you’re easily blown about by the winds of fashion. A credo that resolves competing beliefs also leads to personal integrity. A leader with integrity has one self, at home and at work, with family and with colleagues. Leaders without integrity are putting on an act.

Leaders take people to places they’ve never been before. But there are no freeways to the future, no paved highways to unknown, unexplored destinations. There’s only wilderness. To step out into the unknown, begin with the exploration of the inner territory. We continue to discover that the most critical knowledge for all of us—and for leaders especially—turns out to be self-knowledge.

HUMILITY IS THE ANTIDOTE TO HUBRIS

There’s a catch, however. You can do all of these leadership practices perfectly and still get fired! There’s absolutely no way that we can say that leadership will always work, all of the time, or with everyone. We know for certain that there’s a much greater probability that it will, but there’s no ironclad, money-back guarantee. In addition, you will never find, in historic or present times, even one example of a leader who controlled every aspect of the environment. And you’ll never find an example of a leader who enlisted 100 percent of the possible constituency in even the most compelling of future possibilities.

And there’s still another catch. Any leadership practice can become destructive. Virtues can become vices. There’s a point at which each of The Five Practices, taken to extremes, can lead you astray.

Far more insidious than any of these potential problems, however, is the treachery of hubris. It’s fun to be a leader, gratifying to have influence, and exhilarating to have scores of people cheering your every word. In many all-too-subtle ways, it’s easy to be seduced by power and importance. All evil leaders have been infected with the disease of hubris, becoming bloated with an exaggerated sense of self and pursuing their own sinister ends. How then to avoid it?

Humility is the only way to resolve the conflicts and contradictions of leadership. You can avoid excessive pride only if you recognize that you’re human and need the help of others. As Egon Zehnder, chairman emeritus of Egon Zehnder International, told us, “Listen to what your colleagues have to say. They know more than you do. Have the humility to step back and correct yourself.” Humility. It comes up time and again.4 Exemplary leaders know that “you can’t do it alone,” and they act accordingly. They lack the pride and pretense displayed by many leaders who succeed in the short term but leave behind a weak organization that fails to remain viable after their departure. Instead, with self-effacing humor and generous and sincere credit to others, humble leaders get higher and higher levels of performance.

Nothing in our research hints that leaders should be perfect. Leaders aren’t saints. They’re human beings, full of the flaws and failings of the rest of us. They make mistakes. Perhaps the very best advice we can give all aspiring leaders is to remain humble and unassuming—to always remain open and full of wonder.

LEADERSHIP IS IN THE MOMENT

Michele Goins, chief information officer for Hewlett-Packard’s Imaging and Printing Group, spoke to our students at Santa Clara University. What she said resonated very loudly with them. “Leadership opportunities are presented to everyone,” she observed. “What makes the difference between being a leader or not is how you respond in the moment.” Michele’s observation and her own experiences of leadership in the moment are testimony to how important it is to approach every interaction and every situation as an opportunity to lead.

Sometimes we imagine leadership to be something majestic—about grand visions, about world-changing initiatives, about transforming the lives of millions. While all are noble possibilities, real leadership is in the daily moments. Sergey Nikiforov, cofounder and vice president of product development at Stack3, Inc., put it to us this way:

Where do I start becoming a better leader? This question has been nagging me for some time. Naively I assumed that to become a better leader meant to perform formidable tasks: moving mountains, saving lives, changing the world for the better. As you pointed out these noble, grandiose tasks are often insurmountable for a single person.

Then it occurred to me—I was thinking selfishly. What I envisioned was instant gratification, recognition for my skills and talent. Although the issues at work matched well with your book’s materials, the way I dealt with them was far from ideal. In most cases, I used wrong tools and methods.

I found that every day I had an opportunity to make a small difference. I could have coached someone better, I could have listened better, I could have been more positive toward people, I could have said “thank you” more often, I could have … the list just went on.

At first, I was a bit overwhelmed with the discovery of how many opportunities I had in a single day to act as a better leader. But as I have gotten to put these ideas into practice I have been pleasantly surprised by how much improvement I have been able to make by being more conscientious and intentional about acting as a leader.

Each day provides countless chances to make a difference.

Sergey has nailed it. Each day provides countless chances to make a difference. The chance might come in a private conversation with a direct report or in a meeting with colleagues. It might come over the family dinner table. It might come when you’re speaking at a conference on the future of your business, or it might come when you’re listening to a friend talk about a current conflict with a peer. There are many moments each day, as leaders like Michele and Sergey point out, when you can choose to lead, and many moments each day when you can choose to make a difference. Each of these moments serves up the prospect of contributing to a lasting legacy.

THE SECRET TO SUCCESS IN LIFE

Constituents look for leaders who demonstrate an enthusiastic and genuine belief in the capacity of others, who strengthen people’s will, who supply the means to achieve, and who express optimism for the future. Constituents want leaders who remain passionate despite obstacles and setbacks. In uncertain times, leaders with a positive, confident, can-do approach to life and business are desperately needed.

Leaders must keep hope alive, even in the most difficult of times. Without hope there can be no courage—and this is not the time or place for the timid. This is the time and place for optimism, imagination, and enthusiasm. Leaders must summon their will if they are to mobilize the personal and organizational resources to triumph against the odds. Hope is essential to achieving the highest levels of performance. Hope enables people to transcend the difficulties of today and envision the potentialities of tomorrow. Hope enables people to bounce back even after being stressed, stretched, and depressed. Hope enables people to find the will and the way to unleash greatness.5

And yet, hope is not all. There’s still one more final leadership lesson that we have learned. It’s the secret to success in life.

When we began our study of leadership bests we were fortunate to cross paths with then U.S. Army Major General John H. Stanford. We knew that he had grown up poor, that he failed sixth grade but went on to graduate from Penn State University on an ROTC scholarship, that he survived multiple military tours in both Korea and Vietnam, that he was highly decorated, and that the loyalty of his troops was extraordinary. John headed up the Military Traffic Management Command for the U.S. Army during the Persian Gulf War. When he retired from the Army he became county manager of Fulton County, Georgia, when Atlanta was gearing up to host the 1996 Summer Olympics, and then he became superintendent of the Seattle Public Schools, where he sparked a revolution in public education.6

When John Stanford wanted change, he didn’t simply order it, as his long-time friend Billie Reilly explained.7 For example, in Korea, John never told soldiers under his command that they couldn’t stay out late. He just kept moving up the time of the morning physical training—to the point that it once started at 3 a.m. When he finally moved it back to 6 a.m., Reilly said, John got 100 percent attendance. “Have you ever met someone and immediately said, ‘I need to listen to that person’? That’s John,” said Reilly. “Have you ever met someone and said, ‘I like what he’s doing and I want to follow him’? That’s John. Have you ever met someone who can energize a group that’s lethargic? That’s John. We might call it character, we might call it leadership. When you are in contact with John Stanford, you are immediately drawn to him. Where he’s going, you want to go. And it’s always the right place to go.”

All that we learned of John’s public service was impressive, but it was his answer to one of our interview questions that most influenced our own understanding of leadership. We asked John how he’d go about developing leaders, whether in colleges and universities, in the military, in government, in the nonprofit sector, or in private business. He replied,

When anyone asks me that question, I tell them I have the secret to success in life. The secret to success is to stay in love. Staying in love gives you the fire to ignite other people, to see inside other people, to have a greater desire to get things done than other people. A person who is not in love doesn’t really feel the kind of excitement that helps them to get ahead and to lead others and to achieve. I don’t know any other fire, any other thing in life that is more exhilarating and is more positive a feeling than love is.

“Staying in love” isn’t the answer we expected to get—at least not when we began our study of leadership. But after numerous interviews and case analyses, it finally dawned on us how many leaders used the word love freely when talking about their own motivations to lead.

Of all the things that sustain a leader over time, love is the most lasting. It’s hard to imagine leaders getting up day after day, putting in the long hours and hard work it takes to get extraordinary things done, without having their hearts in it. The best-kept secret of successful leaders is love: staying in love with leading, with the people who do the work, with what their organizations produce, and with those who honor the organization by using its products and services.

Leadership is not an affair of the head. Leadership is an affair of the heart.

(Kouzes 337)

Kouzes, James M., Barry Z. Posner. The Leadership Challenge, 4th Edition. Jossey-Bass, 07/2007. <vbk:9780470633397#outline(13)>.

 

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