My husband and I recently realized that we would soon have to repair or replace the circular concrete driveway in
front of our home. We thought it would last a lot longer than this. Instead, after only 14 years, several concrete slabs are sinking; weeds are creeping up in the spaces between them; a large crack is running through one, courtesy of a heavy delivery truck; another slab is scaling; and the snow plows that are a staple of Michigan winters has left scrape marks on other parts.
We never thought this would happen because they look so strong and thick. We could wait another year or two, but the situation will only get worse. What we thought was a solid foundation with high structural integrity, wasn’t resilient enough to withstand a variety of above and below ground pressures. What if the quality or thickness of the concrete had been stronger? What if we had ensured that heavy vehicles didn’t pull into the driveway? What if we carefully used a walking snowplow each winter instead of hiring a heavy truck to plow it (not!). In hindsight it was hard to predict we’d be in this spot, but we now need to look at options to repair or replace all or a part of the driveway.
Fortune 500 Foundation
As I reflected on this disappointing situation, I happened to look at Fortune Magazine’s recently released list of the top 500 global companies. Their total revenue declined for the first time since 2010 by 11.5% to $31.2 trillion, and profits shrank by 11.2% to $1.48 trillion1. Once strong sectors (such as Oil) and other stalwart corporations have stumbled, and are struggling to find their new footing. Companies that placed in the top 100 in the prior year, have now been displaced from the list.
CEOs and individuals in business leadership roles are frequently confronted with the dichotomy of making decisions to ensure the long term health of their companies, while maximizing short term profits. Their management roles compel them to lead the organization as if they are owners, but in reality, these organizations are owned by and at the mercy of investors and customers who determine the value of their products and services.
In a recent survey conducted by Fortune Magazine, 77% of CEOs said it would be easier to manage their companies if they were private¹. This feedback comes in a climate of increasing numbers of activist investors who purchase a significant amount of company stock, then proceed to make recommendations to the board and company leadership on how they should run it to increase value. To be fair, all such suggestions are not bad, and some have led to considerably positive results in the bottom line of these companies. But these CEO owners may find that their company’s mission and purpose are no longer aligned with where others want them to go.
Customers also have a powerful voice in shaping corporate strategies and decisions. Pepsi worked hard over several years to reformulate its diet cola to remove aspartame, thereby meeting the needs of people who wanted to move away from artificial sweeteners. However, many other diehard Diet Pepsi drinkers didn’t like the taste with the sucralose replacement, and complained loudly. So Pepsi recently announced that the old aspartame formula would return to the market, and they will sell both versions to meet the needs of all those customers. Oh, and did I mention that their sales volume slumped more than 10% during one of the quarters that the aspartame formula was off the market?
What disciplines do you practice to make your leadership successful?
Leadership can be learned, but it requires discipline to be effective. It requires identifying and establishing a pattern or system of constructive behaviors, then repeating them, until they become habits that are ingrained into your routine.
Leadership disciplines are controlled behaviors designed to accomplish specific objectives. They are determined based on the individual leader’s personal style and skillsets, their roles and responsibilities, and the culture and needs of the organization where they function in a leadership capacity.
Leadership roles and responsibilities are all relative. The ability to effectively hold a leadership role in a Fortune 100 company, a family owned business, a mid-sized non-profit, city government or as an entrepreneur is different for each person. But the need for discipline is consistent across every setting.
Leadership is establishing a relationship with others, to influence behaviors, to accomplish a goal. Thus leadership discipline is important because no matter the size of the team, everyone is watching and to some degree imitating the leader. And because everyone is watching the leader, it’s important to model the right behaviors. These behaviors are determined by the results the leader wants to accomplish.
Athletes provide a great example of the need for discipline. They come in all shapes and sizes, from little league superstars to multimillion dollar professionals. But each have to learn the disciplines of their respective sport in order to improve their skill level, and to be competitive. There are four key steps to this discipline. Continue reading
We frequently talk about purpose in the context of individuals or organizations, but there are other areas where identification and understanding of purpose is critical. One such instance is in the context of leadership, and Isadore Sharp, founder and Chairman of the iconic Four Seasons Hotel brand provides a great example.
Sharp finished college with an architecture degree and joined his father’s construction business in the Toronto area. After building several motor hotels, he recognized that his passion lay not in constructing and owning hotel buildings, but in providing a premier guest experience and level of customer service. He wanted to “welcome customers and treat them like guests coming into our home.” 1 So Sharp shifted from being a hotel owner-operator into managing hotel properties. His priority is a commitment to the Golden Rule, where employees and guests alike are treated with respect. Along the way he had to examine the behavior of his senior leadership team and part company with those who couldn’t lead by example. As a result, with 96 properties in 41 countries and annual revenues in excess of $4B, both customer and employee retention is high, and they’ve been on the list of 100 Best Places to Work for 18 consecutive years.
Sharp understands that his leadership purpose was to provide a premier level of hospitality and service. And over time, he recognized the importance of building the right team around him, whose perfomance aligned with that purpose. He fulfills his purpose based on leadership strengths of treating guests with respect and sincerity, and providing the right location and environment for a first class stay. He consistently embeds it into every aspect of his organization’s processes, rewards and behaviors; and believes that a true leader influences not from a position of power, but from a position of respect.2 His leadership purpose and strengths, then work together to accomplish his leadership goal of generating a reasonable profit that benefits the company, hotel owners, customers and employees.
Leadership purpose forms the “why” of your leadership. Are you seeking a leadership role simply because of the power, position, people or profits? Or are you leading because of the purpose, mission and vision that you are pursuing, no matter the size of the role? Leadership strengths are the capabilities and critical success factors necessary to operate in your purpose. And leadership goals are the results you accomplish in your work. Continue reading
According to Fortune’s 2016 report of The World’s Most Admired Companies, which surveyed over 4,000 executives, directors, analysts and business insiders; Apple again commands the top spot on their list, for the 9th consecutive year! It’s followed closely by Alphabet (Google), and Amazon. With a track record like that, we’ve got to understand the ingredients to their success.
First, it’s important to know that the attributes used to determine this ranking include quality of products, quality of management, innovation, long term investment value, talent attraction, financial soundness, corporate asset use, social responsibility, and global business. A well rounded set of criteria that considers all facets of the business.
Apple CEO Tim Cook was interviewed by Adam Lashinsky to get his take on their phenomenal achievement, as well as how they’re handling criticism of recent fiscal first quarter performance, which was strong, but missed investors’ revenue expectations. His response provides several tips as a good reminder for leaders in any organization.
- Block out the noise.
Analysts, media, shareholders, and others will always have some comment or critique about your products or services, but be selective about who you’re listening to. You can’t react to every question or criticism. You can’t be all things to all people. A prime example is their recent issue with the U.S. government on providing access to encrypted information on an iPhone. Whether you agree with Apple’s position in this situation or not, overall, you must evaluate every option and potential product or service based on the next point.
- Focus on your mission and vision.
Cook talked about staying focused on “making the best products that really help people enrich their lives in some way.” So do your mission and vision inspire and excite employees and customers? Does your product or service continue to align with your purpose and the areas where you’ve been successful? Or does your company get distracted by what I like to call shiny objects alongside the road. You know, getting caught up in the latest trend, trying to do what other companies are doing, or letting financial goals be the primary driver to all decisions. Which leads to point three.
- Identify balanced metrics
Cook says he’s driven by the data that shows his customers are happy. And while recent sales didn’t meet analysts’ expectations, they still sold 74 million iPhones at a profit of $18 billion. The temptation to chase profits is HUGE, but most businesses need to take the long view and invest in their future, build a strong internal and external brand, and be known for the quality of their products and services; along with maximizing performance in the immediate term. What metrics best reflect your organization’s goals, market positioning, customer and employee needs?
- Explore the possibilities
Apple has a primary focus on innovation and is widely rumored to be working on a car project. While Cook would neither confirm nor deny that, he did admit that the DNA of the company includes curiosity around a variety of product options that align with their mission, and deliberately selecting a few to pursue. Their cash position makes this easy of course. But they approach it from a perspective of exploring technologies and different ways to use them to align with the focus on making great products that help people.
How Can You Become Most Admired?
So your company or team may not be quite as big as the 1,500 that were considered for this top 50 list. But you can still be greatly admired by colleagues in your industry, geography, or organization. Consider the following questions.
- What are you doing to ensure you are a great place to work, and have the best talent for an organization of your size, geography and industry?
- Do you have the right management team to lead you to the next level, or are you prioritizing loyalty, mediocrity, or family members above talent?
- How are you ensuring high quality products and services?
- How does your organization leverage its head, hands, and heart to support social causes?
- What is the global impact of your products and services?
- How are you innovating? What are you exploring that will make a substantial difference in your business or its operations?
- Are you making decisions that will ensure the financial stability of your organization?
- How are you managing and maximizing your corporate assets?
- What are you doing that would make others want to invest in you and your organization?
Addressing the items on this list may be a challenge for some organizations, but doing so is a reflection of implementing a level of organizational discipline necessary for success. And success is what is most admired.
Korn Ferry was Fortune’s survey partner for this project.
To read the interview of Tim Cook, go to http://fortune.com/tim-cook-apple-q-and-a/