Over the years I have written
about the importance of strong leadership in business and the essential
qualities a leader must have. These qualities are timeless, and they are
especially important when times get tough. In the face of difficult challenges,
great leaders do not retrench. Just the opposite – they step up.
In a great company, you need to
institutionalize and perpetuate a great culture and excellent leaders. To do
this, you must do several things well, including the training, the retention of
talent and the creation of a company that is continually learning. You must
have a culture of character and integrity. This comes from fostering an open
environment, where people speak their minds freely, to treating people with
respect – at all levels, from the CEO to clerks in the mailroom – to setting
the highest standards combined with recognizing and admitting mistakes.
Leadership is an honor, a
privilege and a deep obligation. When leaders make mistakes, a lot of people
can get hurt. Being true to oneself and avoiding self-deception are as
important to a leader as having people to turn to for thoughtful, unbiased
advice. I believe social intelligence and “emotional quotient,” or EQ, matter
in management. EQ can include empathy, clarity of thought, compassion and
strength of character.
Good people want to work for good
leaders. Bad leaders can drive out almost anyone who’s good because they are
corrosive to an organization; and since many are manipulative and deceptive, it
often is a challenge to find them and root them out.
At many of the best companies
throughout history, the constant creation of good leaders is what has enabled
the organizations to stand the true test of greatness – the test of time. Look
at our great military. We love hiring veterans – more than 5,000 in the past
couple years. These veterans are outstanding employees and team members.
Below are some essential
hallmarks of a good leader that I have written about in my previous letters to
shareholders. While we cannot be great at all of these traits – I know I’m not
– to be successful, a leader needs to get most of them right.
Discipline
This means holding regular
business reviews, talent reviews and team meetings and constantly striving for
improvement – from having a strong work ethic to making lists and doing real,
detailed follow-up. Leadership is like exercise; the effect has to be sustained
for it to do any good.
Fortitude
This attribute often is missing
in leaders: they need to have a fierce resolve to act. It means driving change,
fighting bureaucracy and politics, and taking ownership and responsibility.
High
standards
Abraham Lincoln said, “Things may
come
to those who wait ...
but only the things left
by
those who hustle.” Leaders must set high standards of performance all the time,
at a detailed level and with a real sense of urgency. Leaders must compare
themselves with the best. Huge institutions have a tendency toward slowing
things down, which demands that leaders push forward constantly. True leaders
must set the highest standards of integrity
– those standards are not
embedded in the business but require conscious choices. Such standards demand
that we treat customers
and
employees the way we would want to be treated ourselves or the way we would
want our own mother to be treated.
Ability
to face facts
In a cold-blooded, honest way,
leaders emphasize the negatives at management meetings and focus on what can be
improved (of course, it’s okay to celebrate the successes, too). All reporting
must be accurate, and all relevant facts must be reported, with full disclosure
and on one set of books.
Openness
Sharing information all the time
is vital –
we
should debate the issues and alternative approaches, not the facts. The best
leaders kill bureaucracy – it can cripple an organization
– and watch for signs
of politics, like sidebar meetings after the real meeting because people
wouldn’t speak their mind at the right time.
Equally important, leaders get
out in the field regularly so as not to lose touch. Anyone in a meeting should
feel free to speak his or her mind without fear of offending anyone else.
I once heard someone
describe the importance of having “at least one truth-teller at the table.”
Well, if there is just one truth-teller at the table, you’re in trouble –
everyone should be a truth-teller.
Setup
for success
An effective leader makes sure all
the right people are in the room – from Legal, Systems and Operations to Human
Resources, Finance and Risk. It’s also necessary to set up the right structure.
When tri-heads report to co-heads, all decisions become political – a setup for
failure, not success.
Morale-building
High morale is developed through
fixing problems, dealing directly and honestly with issues, earning respect and
winning. It does not come from overpaying people or delivering sweet talk,
which permits the avoidance of hard decision making and fosters
passive-aggressive behaviors.
Loyalty,
meritocracy and teamwork
While I deeply believe in
loyalty, it often is misused. Loyalty should be to the principles for which
someone stands and to the institution: Loyalty to an individual frequently is
another form of cronyism. Leaders demand a lot from their employees and should
be loyal to them – but loyalty and mutual respect are two-way streets. Loyalty
to employees does not mean that a manager owes them a particular job. Loyalty
to employees means building a healthy, vibrant company; telling them the truth;
and giving them meaningful work, training and opportunities. If employees fall
down, we should get them the help they need. Meritocracy and teamwork also are
critical but frequently misunderstood. Meritocracy means putting the best
person in the job, which promotes a sense of justice in the organization rather
than the appearance of cynicism: “here they go again, taking care of their
friends.” Finally, while teamwork is important and often code for “getting
along,” equally important is an individual’s ability to have the courage to
stand alone and do the right thing.
Fair
treatment
The best leaders treat all people
properly and respectfully, from clerks to CEOs. Everyone needs to help everyone
else at the company because everyone’s collective purpose is to serve clients.
When strong leaders consider promoting people, they pick those who are
respected and ask themselves, would I want to work for him? Would I want my kid
to report to her?
Humility
Leaders need to acknowledge those
who came before them and helped shape the enterprise – it’s not all their own
doing. There’s a lot of luck involved in anyone’s success, and a little
humility is important. The overall goal must be to help build a great company –
then we can do more for our employees, our customers and our communities. |
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