Cracking the Leadership Code
by Dave Ulrich and Norm Smallwood
There are rules to most games, just as there are winners and losers. In business, these factors are also evident, and effective leadership, for which there are five major rules, is a key strategy that organizations need to win.
Google the words "leader" and "leadership," and there are some 487 million hits. That's an awful lot of information to answer one simple but essential question: What attributes are necessary for leaders to actually generate strategic business results?
Our research at The RBL Group has uncovered a leadership code - five key attributes or rules shared by the majority of effective leaders.
To get there, we turned to recognized experts in the field who had already spent years sifting through the evidence and developing their own theories. These thought leaders have each published a theory of leadership based on a long history of research and empirical assessment of what makes effective leadership. Collectively, they have written more than 50 books on leadership and performed more than 2 million leadership 360s.
Discussions with them focused on two questions whose answers always had been elusive:
1. What percent of effective leadership is basically the same?
2. If there are common rules that all leaders must master, what are they?
Does an effective leader at, say, Wal-Mart in any way resemble an effective leader at Virgin Airlines? Does an effective leader in a bootstrapping NGO in any way resemble an effective leader at the famously bureaucratic United Nations? Does an effective leader in an emerging market resemble an effective leader in a mature market?
In response to the first question, our experts told us that 60 to 70 percent of leadership is basically the same everywhere. To find the answer to the second question, we synthesized data, interviews and our own research and experience, and the leadership code framework emerged.
Rule 1: Shape the future. This rule is embodied in the strategist dimension of the leader. Strategists answer the question "Where are we going?" and make sure those around them understand the direction as well. They envision and can create a future. They figure out where the organization needs to go to succeed, test ideas pragmatically against current resources - money, people, organizational capabilities - and work with others to figure out how to get from the present to the desired future. The rules for strategists are about creating, defining and delivering principles of what can be.
Rule 2: Make things happen. The executor dimension of the leader focuses on the question "How will we make sure we get where we are going?" Executors understand how to assign accountability, how to know which key decisions to take charge of and which to delegate, and how to make sure teams work well together. They keep promises to multiple stakeholders. Executors make things happen and put the systems in place for others to do the same. The rules for executors revolve around disciplines to get the right things done and the technical expertise to get them done right.
Rule 3: Engage today's talent. Leaders who optimize talent today answer the question "Who goes with us on our business journey?" Talent managers know how to identify, build and engage talent to get results now. They identify what skills are required, draw talent to their organizations, engage them, communicate extensively and ensure employees turn in their best efforts. They generate intense personal, professional and organizational loyalty. The rules for talent managers center around resolutions that help people develop themselves for the good of the organization.
Rule 4: Build the next generation. Leaders who are human capital developers answer the question "Who stays and sustains the organization for the next generation?" Talent managers ensure people meet shorter-term results, while human capital developers ensure the organization has the longer-term competencies required for future strategic success. Just as good parents invest in helping their children succeed, human capital developers help future leaders be successful. Human capital developers build a workforce plan focused on future talent, understand how to develop that talent and help employees see their future careers within the company. They ensure the organization will outlive any single individual.
Rule 5: Invest in yourself. At the heart of the leadership code is personal proficiency. Effective leaders cannot be reduced to what they know and do. Who they are as human beings has everything to do with how much they can accomplish. Leaders are learners: from success, failure, assignments, books, classes, people and life itself. Passionate about their beliefs and interests, they expend enormous personal energy and attention on whatever matters to them. Effective leaders inspire loyalty and goodwill in others because they themselves act with integrity and trust. Decisive and impassioned, they are capable of bold and courageous moves. Confident in their ability to deal with situations as they arise, they can tolerate ambiguity.
As we have worked with these five rules of leadership, we can make some summary observations.
1. All leaders must excel at personal proficiency. Without the foundation of trust and credibility, a leader cannot ask others to follow him. While individuals may have different styles - introvert vs. extrovert or intuitive vs. sensing - a leader must be seen as having the personal proficiency to engage followers. This is probably the toughest of the five domains to train, and some individuals are naturally more capable than others.
2. Effective leaders have one towering strength. Most successful leaders have at least one of the other four roles in which they excel. They may even be personally predisposed to one or more of these areas. These are called signature strengths.
3. A leader must be at least average in his or her weaker leadership domains. It is possible to train someone to be strategic, to execute, to manage talent or to develop future talent. There are behaviours and skills that can be identified, developed and mastered.
4. The higher up the organization the leader rises, the more he needs to develop excellence in the other domains.
The Leadership Brand
According to our thought leaders, the leadership code explains about 60 to 70 percent of the leadership puzzle. To get an idea of the other 30 to 40 percent, think of giving Richard Branson, chairman of the Virgin Group, and Jeff Immelt, CEO of General Electric (GE), a leadership code 360. Both likely would score high. Both are strong strategists; both know how to execute and to get their ideas implemented by others; both are high in personal proficiency; both are talent developers; and both are concerned about the next generation of talent and act as human capital developers. They have the core code competencies, but they are also quite different.
Immelt tends to be more corporate-looking than Branson. He wears his hair shorter, is clean-shaven and often wears a suit and tie when speaking with customers and investors; we're not sure if we've ever seen the shaggy-haired Branson in a suit, much less a tie. Branson is playful, while Immelt tends to come across as more conservative and businesslike. Immelt speaks in a measured manner, and Branson tends to use colorful language to make his points. They have some differences in style and perhaps some other important differences as leaders.
For a company to build branded leaders, its leaders must know the leadership code fundamentals and the unique leadership differentiators. Together, these equal leadership brand competencies.
The next step is to translate these firm brand descriptions into unique leadership differentiators, such as the leadership competencies that make the firm brand real to customers whenever they interact with an employee from the company. These leadership differentiators are always outside in; they bring the customer mindset to the table.
At Southwest Airlines, the best firm leaders assure that whenever customers fly Southwest, they have a fun experience. Founder Herb Kelleher - perhaps one of the few leaders on the planet who makes Richard Branson look conservative - personifies fun at Southwest. It's easy to find pictures of Kelleher in drag, in a tutu or celebrating key milestones for his company in other outrageous and fun ways. On down through the ranks, Southwest selects fun leaders, rewarding people in any job who improvise to find ways to have fun with customers in a way the customer enjoys, and celebrates their successes. As a result of a culture reinforced by leaders at every level, most customers find flying on Southwest to be a unique experience they quite enjoy - even if they do not get a first-class seat or a free meal.
Jeff Immelt personifies GE's firm identity - organic growth and innovation with a lot of measurement and accountability. He is a role model to other GE leaders about how the firm should be seen by outside stakeholders. Virgin's firm identity is about fun, irreverence and challenging the status quo, and that's exactly what Richard Branson is constantly doing. He lives on an island and seems to enjoy the high life in ways the rest of us can only dream of. He personifies the leadership style of the Virgin brand.
GE, Virgin and Southwest develop leaders at every level that fit within the context of their differing firm identities, and the companies each have a leadership brand that is appreciated by customers and employees and rewarded by financial markets as an envied capability.
[About the Authors: Dave Ulrich and Norm Smallwood are co-founders of The RBL Group and co-authors of The Leadership Code, from which this piece was adapted.]
