the art of leading

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Over the past five years, as iContact and Virante have grown, I’ve learned a lot about managing people. A business amounts to little without the people behind it. The two most important things I look for when hiring are initiative and work ethic. I cannot overestimate the importance to the eventual success of your business of bringing on good people. But once you have hired these good people, how do you manage them?

I certainly admit that I have much left to learn about leadership and management, but here are a few tips that might be helpful:

• Have a vision and communicate it. Make sure you clearly communicate your vision for the company. No one follows a leader who cannot communicate the way in which the company will succeed. The future of all your employees is tied closely to the success of your company. Make sure they believe in your company, what it stands for, and its products and services, and make sure they know that the hard work they are putting in now will payoff.
• Show respect. Treat people, including your customers, suppliers, partners, and employees, with respect at all times.
• Share your success. Make sure your employees share in the success of your company. As the company is able, provide additional benefits such as health care and dental coverage, a stock options plan, and a 401(k) plan. As your employees’ skills and abilities grow, reward them with fair compensation. Finally, consider incentivizing your top employees and managers with ownership in the company. Few things can make a person work harder than a piece of the action.
• Don’t be too serious. Make the business environment fun at times. While being professional and taking things seriously is important, nothing can beat the effects of a companywide midnight round of bowling after you reach an important milestone, a lunchtime pizza party once a month, or a spontaneous Nerf-dart duel.
• Work with your employees. Make sure the employees see you there and working with them. No one likes to work hard for someone who doesn’t work hard him — or herself. Especially early on, be the first to arrive and the last to leave whenever possible.
• Keep your door open. Whether or not you have your own office yet, keep your “door” open. Make sure your employees and managers know that you are approachable at any time about any problem they are having.
• Listen. You have built a great team and are paying top dollar for it. Hold meetings with your management team at least every other week. Also have frequent informal ad hoc discussions with your partners, managers, and employees. Get their feedback, discuss the business and its strategy, and inquire every so often if there is anything that is frustrating them that you can help with. A few weeks ago I had a quick spur-of-the-moment meeting with the lead developer for iContact. After inquiring whether he had any job frustrations, it came out that he felt he was working in an environment in which he became distracted too often. We quickly devised a solution whereby he would work at home four hours a day until we could move into a larger office where the development team could work in a separate room, away from the distraction of the sales and support team. This small change has doubled the developer’s productivity.
• Build relationships. Without understanding at least the basics of what is occurring in an employee’s out-of-office life, it can be hard to connect with the person on a professional level. One tactic I’ve used successfully to get to know each employee personally is to take the person and his or her significant other to dinner the first evening of their employment. It serves as a way to celebrate the occasion as well as learn a little bit about the employee that would not come out in interviews or through reading a resume.
• Commend more than you criticize. Too many business owners (and I have been guilty of this as well) speak to an employee only when he or she has done something wrong or something that has negatively affected the company. While constructive criticism and appropriate guidance have their place, if you seem to only condemn and never praise, your employees will quickly either dislike you or show apathy toward their jobs. Continual properly placed praises can be as powerful in getting quality results from employees as a large pay raise. Many people thrive on peer and superior recognition just as much as on money. Instituting an employee-of-the-month award and a quarterly performance review can be extremely valuable to your company.
• Consciously build a culture. At iContact, we truly are a family. In fact, we call ourselves the iContact Family. When someone is moving into a new house or needs a ride home from the airport, we’re there to help. We believe in building people up, not tearing people down. We put people first and have respect for the individual. We believe that we should work hard and be innovative, yet maintain a balance in our lives. We believe in not letting balls drop, and that we’re all working together on the same mission. We have foosball and Ping-Pong tables in our office, free sodas, Bagel Monday, and monthly birthday celebrations and Outstanding Performance Award ceremonies. We have a young, dynamic, fun, and innovative culture. It exists because we have consciously built it.

As a manager and business owner, you are charged with an immense responsibility. You control the activity and purpose that your employees dedicate half of their waking hours to. Make your company’s purpose meaningful, communicate your vision, respect and praise your employees, and share your success. If you can succeed in building a team of highly motivated and happy employees who take initiative, have a bias toward action, respect you, and truly care for the business, you will have done much of the work toward building a strong and fast-growing organization.

Author
Ryan P. Allis is CEO of iContact Corp., a venture-backed marketing and online communications firm that has grown from nothing to over $10 million in annual sales and 80 employees. He is also the Chairman of the web marketing firm Virante, Inc. For more information on Ryan Allis and Zero to One Million, visit www.zeromillion.com

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This is the fourth in a series of four articles written by Ram Charan, based on his latest book, Leaders at all Levels. As soon as I read the book, I’ll post a review. In the meantime, these articles are packed full of value and very useful. Enjoy!

In my many years of observing leaders, I have noticed a number of other signs that a person has high potential for corporate leadership. A wide cognitive “bandwidth” — the capacity and inclination to see things in a broader context — is an earmark of a CEO who anticipates how changes in the external environment will affect the business or of a marketing vice president who sees how marketing relates to overall company direction. Leaders aren’t born with the phenomenal breadth and scope of thinking that characterizes successful leaders of big companies, but those with a drive to constantly search for more information and see things from a broader view have the potential for it. Some young leaders exhibit a conceptual ability to rise above the details, to see a broader context than their peers, and to place themselves and their immediate accomplishments within that broader context.

Look for actions that reveal such thinking. I know of one instance in which a high-potential executive was asked to add two more divisions to her portfolio of responsibilities. She demurred, pointing out to her boss that while she would welcome the additional responsibilities, the two divisions would be better placed with one of her colleagues because they were complementary to businesses already under him. Her willingness to put the company’s interests above her own ego reflected not just a great personality trait but also her ability to think strategically and from the viewpoint of the overall business.

Drive and aggression are common criteria for identifying leaders and are conveniently easy to observe even in very young people. What boss wouldn’t notice the young sales rep who pushes hard to win more and more business and outshines his seasoned peers in hitting targets? But a rep who does her job to a tee and also seems to have a handle on what her sales manager does — and even what the regional sales director does — is demonstrating something more than drive: a desire and ability to see the bigger picture.

Leaders must also be able to make sense of all they take in and set a clear course of action. After gathering information from multiple sources and shaping several alternatives, they have to be able to sort out what is important, make a decision, and act on it. Even at lower levels, information is often muddled and the right path is often unclear, but leaders with high potential find clarity and act decisively despite the uncertainty and ambiguity that stymies others. They take disparate facts and observations and connect the dots to create a clear view of what they think is likely to happen before it actually does. Because they see the hazy outlines of change coming before others do, they put their businesses on the offensive.

Most high-potential leaders will show an uncommon ability to analyze and synthesize large amounts of data and make a decision based not only on the data but also on intuition. They have a way of clearing the fog. They frequently use the “80-20 rule,” which states that 20 percent of factors account for 80 percent of value. They sift, sort, and select information based not only on its content but also on its source. They think in second, third, and fourth orders of consequence, are extremely clear about goals and constraints, develop alternative paths, and have a backup plan in the event a decision proves wrong.

Business leaders make judgment calls on a daily basis as they balance the inherent tensions between the short term versus the long term, between shareholders and customers and employees and external constituencies, and between opportunities and aspirations versus real-world realities and constraints. Some people are simply not decisive or tough enough to lead the business. They let opportunities slip away, powerful personalities dominate, and other people set the course. These people are not leaders, regardless of the depth of their thinking.

Another sure sign of leadership potential, and one that is especially important in today’s environment of tumultuous change, is the leader’s passionate quest to continually learn and grow. High potentials seize the opportunity to take “stretch” assignments that tax their abilities precisely because they are stimulated by the challenge and the opportunity to increase their knowledge base about the business, people, and the external world. They are intellectually honest and have the self-confidence to acknowledge when they don’t have the answers, knowing they can find them. They are dissatisfied with incremental progress and the status quo. They continually search for new ideas and different ways of seeing things. This insatiable thirst for learning tends to make them more contemporary than their bosses, more aware of leading-edge technologies and trends.

Don’t forget to look at integrity and drive to screen out those who fall short. Leaders must tell the truth at all times fearlessly and without weighing the consequences. When confronted with a moral or legal quandary, they must always choose the ethical course of action. Leaders must also radiate a sense of urgency. In the course of being tested, over the years a high-potential individual will be given increasingly broad and difficult jobs. Without relentless drive and near-total immersion, he will find it difficult to maintain the endurance necessary to master tasks.

Copyright © 2008 Ram Charan from the book Leaders at all Levels by Ram Charan Published by Jossey-Bass; December 2007;$27.95US/$33.99CAN; 978-0-7879-8559-2

Ram Charan is the author or coauthor of many bestselling business books, including What the CEO Wants You to Know and Execution. For more than thirty-five years, he has worked behind the scenes at Fortune 100 companies like GE, Bank of America, DuPont, Thomson financial, Honeywell and Home Depot to help senior executives develop and implement strategic plans. www.ram-charan.com

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This is the third in a series of four articles written by Ram Charan, based on his latest book, Leaders at all Levels. As soon as I read the book, I’ll post a review. In the meantime, these articles are packed full of value and very useful. Enjoy!

Every successful businessperson, whether a street vendor or the CEO of a global empire, has a basic understanding of how the business makes money. The essence of making money is managing the profit and loss (P&L) as well as the balance sheet of a business in the context of the external world. Let there be no mistake, profit and loss is a much broader concept than profit or loss. Managing the profit and loss within a business requires that a person take in myriad factors and pieces of information — much of which is incomplete or distorted — that contribute to either a profit or a loss, connect those various conflicting things, and make the trade-offs among them with the clear goal of making money and generating cash on a sustained basis. The leader must also know how profits and losses interact with the company’s balance sheet, which indicates the health of the company.

This cognitive ability to conceptualize the working of the business is present and highly developed in every successful CEO I have known. It is the CEO nucleus defined in Chapter 2: “the intuitive ability to comprehend the total picture of a business and how it makes money in the language of a street vendor.”

We can’t expect a thirty-year-old leader to have the business acumen of a forty-five-year-old, but an intuitive feel for business is evident at an early age if we bother to look for it. These are the people who intuitively understand the connections between customers, profits, money they borrow, and money they take in. This business acumen is evident even in the simplest contexts, such as that of a small shop with a well-defined customer base and a handful of competitors. You see it in shopkeepers who mark the prices down in the right increments at the right time, buy the right merchandise, and create the right shopping experience, constantly making adjustments to keep the cash flowing. They have a knack for making the right trade-offs and decisions, and the business prospers.

You also can see it in some leaders at the lowest organizational levels and in the earliest stages of their careers in a big company. They have a sense of how their company makes money, what it really offers customers, and how it compares with the competition. Given the chance to run even a tiny P&L center, they have the ability to weigh multiple factors, from changes in the external environment to internal constraints, in deciding how to position the business and expand its money making. They understand the relationships between the variables, do the mental processing to determine which are most important, and make decisions that deliver clear, measurable business results.

As the scope of a leader’s job increases, so do the number of variables and the uncertainty about them. The complexity grows exponentially. The leader needs greater mental breadth and depth to make the connections between the complexities of the outside world and the intricacies of money making. She also needs incisiveness to cut through that complexity to the shopkeeper fundamentals. When leaders are unable to make good decisions, or any decisions at all, it may be that their business acumen is not expanding. They cannot be considered to have CEO potential. A sales manager who becomes the executive vice president of marketing and product development may face the problem of identifying the need for innovative products that will satisfy new customer needs. He has to balance the risks of developing those new products against the business’s growth, all of which requires a broader scope of thinking and acting. If he can’t do it, that’s a sign that his business acumen will not develop fast enough for him to become a successful CEO of a major company. Leaders who continue to develop their business acumen, or CEO nucleus, expand their capability, or their ability to add more value per increment of time by taking on more complexity, ambiguity, and uncertainty.

The search for business acumen will help keep other traits and skills in perspective. For instance, great communication skills help leaders motivate people, implement a strategy, and win over customers, investors, and the public. But business acumen defines the substance of the message being communicated. Some young leaders can excite and lead their group to deliver on stretch goals, but can they define where the group is going? Are they decisive, and can they sort through multiple alternatives to find the right pathway forward? Can they use their business acumen to choose the right goals and KPIs? With practice, any leader can improve, but some leaders are naturally better at it.

Copyright © 2008 Ram Charan from the book Leaders at all Levels by Ram Charan Published by Jossey-Bass; December 2007;$27.95US/$33.99CAN; 978-0-7879-8559-2

Ram Charan is the author or coauthor of many bestselling business books, including What the CEO Wants You to Know and Execution. For more than thirty-five years, he has worked behind the scenes at Fortune 100 companies like GE, Bank of America, DuPont, Thomson financial, Honeywell and Home Depot to help senior executives develop and implement strategic plans. www.ram-charan.com

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This is the second in a series of four articles written by Ram Charan, based on his latest book, Leaders at all Levels. As soon as I read the book, I’ll post a review. In the meantime, these articles are packed full of value and very useful. Enjoy!

Leadership is predicated on the ability to mobilize others to accomplish a vision, a goal, or a task. Leaders can’t do everything; they get other people to do things through managing. They increase their capacity — the ability to get more done — through delegation combined with a methodology for ensuring follow-through. They set expectations, get the best people to do what needs to be done, and oversee the relationships among them to ensure that destructive or self-interested behaviors don’t subvert the group’s common purpose.

You know you’ve discovered a leader with people acumen when you see evidence that the person selects the right people and motivates them, gets them working well as a team, and is able to diagnose and fix problems in coordination and social relationships among groups of people.

Real leaders, I have found, exhibit an enthusiasm for selecting people who are better than they are — whether or not they have worked with them before — and then using those subordinates to lift the organization and themselves to new levels of accomplishment. They motivate their people and develop them as conditions change, retaining those who advance the business and having the courage to deselect with dignity those who don’t. Such leaders show a repeated pattern of accurately identifying other leaders’ talents, helping them flourish, or easing them into other jobs where their talents fit better. You can often identify a true leader because the people working under that person are of high caliber, are energized, and have a natural affinity for the leader and want to see him or her succeed.

Leaders with people acumen get the most out of their people by setting clear goals, then giving feedback and coaching judiciously to help achieve them. Most use some kind of performance indicators (the term I use is key performance indicators, or KPIs) that not only measure progress in quantitative terms but also influence behaviors. A KPI may be as simple as the percentage of customer calls answered in the first minute or may be as broad as corporate profitability measured against competitors. They watch for problems that might get in the way of achieving the KPIs and don’t hesitate to give people unvarnished feedback. They are keen judges of when someone is not up to the task and don’t back off from making the hard decision to replace him. Many people who think they’re leaders are terribly uncomfortable and indecisive in the realm of personalities, even when they have the insight into who and what needs coaching. Some have a deep-rooted need to be liked that compromises their judgments of people.

Anyone can improve his or her ability to select and develop people’s talents, but other aspects of people acumen are hard to teach. Leaders with people acumen have good instincts to anticipate problems among individuals who must work together and to get them resolved. They size up the group dynamics and pinpoint simmering conflicts, then draw them to the surface to unblock the group’s progress. They intervene when they detect behavior that disrupts the working of the group. These leaders are fearless where many people are unconsciously concerned that if they try to change the group dynamics, they’ll be cut apart or ignored and lose face.

Social acumen also manifests itself in network building. Leaders who possess it are not loners or bookworms. They have an innate desire to work with diverse people and naturally cultivate a broad range of social networks that permeate the company, including subordinates, peers, and superiors. As these leaders develop their social acumen, their networks often extend beyond the business to include customers, suppliers, regulators, politicians, and various interest groups. The relationships tend to be durable because they are built on trust, and that trust allows information to flow both ways, exposing the leader to new ideas and different ways to see things. The social networks also allow him or her to energize and synchronize people’s energy and actions and to do a better job managing a crisis than would otherwise be the case.

Copyright © 2008 Ram Charan from the book Leaders at all Levels by Ram Charan Published by Jossey-Bass; December 2007;$27.95US/$33.99CAN; 978-0-7879-8559-2

Ram Charan is the author or coauthor of many bestselling business books, including What the CEO Wants You to Know and Execution. For more than thirty-five years, he has worked behind the scenes at Fortune 100 companies like GE, Bank of America, DuPont, Thomson financial, Honeywell and Home Depot to help senior executives develop and implement strategic plans. www.ram-charan.com

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This week, between Monday and Thursday, I’ve decided to post a series of four articles written by Ram Charan, based on his latest book, Leaders at all Levels. As soon as I read the book, I’ll post a review. In the meantime, these articles are packed full of value and very useful. Enjoy!

Do you think you know a leader when you see one? Most companies have the wrong notion of what a leader really is and does. Yet all the development efforts in the world can’t deepen the leadership pool if they’re focused on the wrong people to begin with.

The brilliant strategist, the creative genius, the financial engineer, and other bright people command attention and respect, and rightfully so. People recognize such individuals’ knowledge and intelligence, respect their opinions and ideas, and appear willing to follow them. Combine that great mental ability with a strong work ethic and drive to achieve, and no wonder people are impressed. Unaware of their own shortcomings and driven to succeed, these experts push for leadership jobs at higher and higher levels, persuading — sometimes even intimidating — their bosses to promote them. But many lack essential leadership traits. Although they may succeed for a while when put in charge of other people, without a natural ability to lead, they are unlikely to ever succeed as CEOs or high-level leaders outside their domains of expertise.

What does a natural leader look like at the age of twenty-five or thirty? The usual attempts to answer that question take the form of laundry lists of personal qualities. These are important, but on their own they can be misleading, especially because the same wonderful personal qualities can be found in political leaders, spiritual leaders, and leaders in sports, many of whom don’t have an ounce of talent for business. Besides, many personal traits and capabilities associated with leadership in the past are insufficient today. You have to go beyond the list of personal traits you’re looking for to include other indications that a person can succeed in leading a business function, business unit, or whole company in the emerging business context.

One way to think about the raw talent or inner engine of a business leader is to think of two strands of a helix: people acumen (the ability to harness people’s energy) and business acumen (understanding the essence of how a business makes money). The beginnings of these strands are pretty much in place in individuals by the time they reach their twenties. After that, we can test someone’s people acumen and business acumen and give them opportunities to expand them. But we don’t yet know how to implant them in mature people who lack them entirely. That’s why spotting these strands, however undeveloped they may be, should be central to any effort to identify leadership potential. People who lack them are unlikely to ever reach the highest leadership levels, no matter how many other leadership traits they possess. Only when people acumen and business acumen are present in some degree should personal traits come into play.

It’s fruitless to argue whether those talents and personal traits are born or made. We know they begin to manifest themselves early in life and are firmly in place in some people by the time they join the workforce. Some of those qualities may be latent and come to the surface only later under certain conditions — such as when a person who is not the official leader suddenly takes charge of a crisis. But it is unlikely you can implant them into a mature person without inherent leadership abilities to make him or her a leader.

Copyright © 2008 Ram Charan from the book Leaders at all Levels by Ram Charan Published by Jossey-Bass; December 2007;$27.95US/$33.99CAN; 978-0-7879-8559-2

Ram Charan is the author or coauthor of many bestselling business books, including What the CEO Wants You to Know and Execution. For more than thirty-five years, he has worked behind the scenes at Fortune 100 companies like GE, Bank of America, DuPont, Thomson financial, Honeywell and Home Depot to help senior executives develop and implement strategic plans. www.ram-charan.com

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Do you need the courage to keep living? Do you feel that life is cruel and that you can’t deal with the suffering it throws at you? If so, you need a reality check of sorts. You need to find meaning in your life, and that’s what this book is about.

Man’s Search for Meaning covers essentially one topic: how people, even under the most dreary circumstances, can look for and find a reason to keep living. Its author, the psychiatrist Victor Frankl, was a Holocaust survivor and the father of logotherapy. Therefore, he roughly divided the book into two parts: his experience as a prisoner in the Auschwitz concentration camp, and an explanation of how his theories helped him survive that experience.

In the first part, Frankl recalls detailed events of everyday life in the camps. He also includes stories, some of success and others of failure, about other prisoners who were also anxiously looking for a reason to live. What differentiates this from other narrations of life in concentration camps is that Frankl’s is much more in tune with a psychiatrist’s point of view. The content of the second part of the book is more focused on Frankl’s theories and the development of logotherapy. Logotherapy was born, essentially, out of his own experiences in the camps. Even when this second part has what may be seen as more “scientific” or “psychological” explanations, it is masterfully written so that anyone outside the fields of psychology and psychiatry can understand it and extract value from it.

The book is full of valuable information, but there are three main points that can be taken from it:

1. The process an inmate goes through: shock, apathy, and depersonalization;
2. There only two kinds of people: decent and indecent;
3. Even in severe suffering, human beings have the choice to find some reason to live.

That last point is definitely the most important one. As long as one has faith that the future holds at least one positive thing, you can keep living. Once one loses that faith, death is certain, as there is no reason to withstand brutal suffering like the one that prisoners of the Auschwitz concentration camp did.

A couple of quotations from the book capture the essence of its message:

“We have come to know man as he really is. After all, man is that being who invented the gas chambers of Auschwitz; however, he is also that being who entered those gas chambers upright, with the Lord’s prayer or the Shema Yisrael on his lips.”

“We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.”

I use any opportunity I have to recommend this book to everyone. This book has been one of the most important reading experiences of my life. At least, it has produced the most impact on my point of view of what it means to be human, and what that human ‘experience’ should be like. It has given me the courage to find many reasons to live and excel as a human being. After all, if Auschwitz inmates can, why can’t anyone?

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