At the recent Conference Board in Chicago, a number of talent management professionals and consulting experts gave presentations on next-generation leadership. These discussions included a variety of topics, from recruiting generation Y and Millennial employees to social networking and overcoming the talent management gap as Baby Boomers retire. The common thread in these topics there were three recurrent questions 1) how do we develop next generation high potentials for senior leadership roles, 2) do we tell them they are high potentials, and 3) how will this impact their ability to be authentic leaders?
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Chasing Your Shadow: Leadership Brand and Derailment
I recently listened to a talk given by Greg Barnett, one of Hogan’s veteran consultants and our Director of Product Development, about the importance of defining a strong leadership brand. The concept of an individual leadership brand departs from our conventional understanding of branding from an organizational standpoint. For example, consider the brand that Apple computers has created; the exemplars of innovation, elegant simplicity, and sleek, modern, technology. Now consider the individual leadership brand that Steve Jobs created – in many ways, his personality embodies many of the same qualities of Apple’s brand – Jobs is hailed as an innovative, creative genius who changed the world with his brilliance and innovation. Even his physical image aligned with Apple’s brand – sleek, simple, and timeless with a modern slant.
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Streaming Leadership Derailment
I’m a big movie buff. Since I have young children I rarely get a chance to go the movie theaters anymore to see a film that doesn’t star Woody, Buzz, Lightning McQueen, or a princess of some type. In my 5+ years of fatherhood, Netflix has become a savior in terms of feeding my movie addiction. For me and 20 million other subscribers, seeing that a new movie is available for streaming online or getting that red envelope in the mail is one of life’s simple joys.
The joy of being a Netflix customer was mightily shaken last July when customers received a brisk, impersonal email informing them that the video subscription service pricing would be increased by as much as 60% per month unless subscribers decided to substantially limit the services they were receiving. In essence, customers were abruptly told that they would no longer be able to enjoy both the streaming movies and DVD-by-mail features. They would be required to choose one type of service otherwise incur the price hike to retain both options.
Netflix customers were outraged by this imposed price increase and/or elimination of service options. This outrage was not only communicated via blogs and Facebook posts. Many customers have truly put their money where their mouth is by canceling their subscriptions. The company’s stock price is now 42% lower than it was in July before the price hike announcement. An organization that by all accounts changed the video rental industry and was experiencing a fantastic upward trajectory envied by the business world has taken a serious turn for the worse. How did this happen?
The recent events at Netflix appear to be yet another unfortunate example of leadership derailment. The company’s decision to increase prices and the manner in which they communicated the changes to customers has been perceived by many as a bold and arrogant move. In September, Netflix CEO Reed Hastings issued a statement apologizing to customers. However, it is possible that some may view his apology as too little, too late. Even after the initial customer backlash, Netflix at first confidently defended their decision and even announced in August that they expected to gain 400,000 subscribers by the end of September. Recently, Netflix has projected that it will have actually lost 600,000 customers by the end of September. In other bad news, Starz, a key movie content partner for Netflix, ended its partnership with the organization. The company has decided to rebrand their DVD-by-mail service as a separate company called Qwikster. The effectiveness of this strategy is being questioned by many and could further stoke the flames of the fire started earlier this summer.
Two months after the initial controversy, Reed Hastings’ blog post apology stated that the July announcement “lacked respect and humility” and indicated that he should have personally communicated in more detail the reasons for the changes. He went on to say, “In hindsight, I slid into arrogance based upon past success.” Hastings ends his statement by saying that he and his team will work hard to regain customers’ trust. Interestingly enough, his actions and choice of terminology strongly parallel the leadership derailment research findings of Hogan Assessment Systems.
High potential leaders assessed by Hogan tend to be seen as confident, assertive, ambitious, and visionary. Some of these very characteristics are likely present in the senior leadership team at Netflix and surely contributed significantly to the company’s hugely successful rise. However, during stress or heavy workloads, when leaders aren’t paying attention, or during times of change, this confident style may emerge as counterproductive behaviors viewed by others as arrogant, lacking humility, setting unrealistic expectations, and ignoring negative feedback. In his own words, Hastings acknowledged a very similar behavioral pattern. Furthermore, derailing behaviors related to arrogance often lead to the inability of leaders to be seen as trustworthy and sincere, hence Hastings’ comment that Netflix is now committed to regaining customer trust.
Leaders that allow their natural confidence to descend into arrogance rarely admit when they are wrong, learn from mistakes, or take responsibility when things go wrong. This recent statement by the CEO appears to potentially demonstrate a realization that a mistake was made and a willingness to take ownership of the misstep…however the pricing increase was not rescinded and only the poor communication of the policy change was addressed. Will the apology and Qwikster rebranding strategy be effective in retaining customers and attracting new subscribers? Can Netflix and its leaders get back on track after derailing so drastically? Stay tuned!
The Two Sides of Leadership: What Goes On Behind Closed Doors?
We heard it all before: leaders behaving one way in public, then very differently behind closed doors.
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Leader of the Pack
For as long as I can remember, I have had a strong affinity for canines. In fact, I haven’t ever been without at least one, and don’t ever imagine a time in my life when I will. In keeping with that trend I recently became the proud adopted father to two dogs - Weimaraners. You have probably heard about how utterly insane this particular breed of canine can be. You may have even experienced it firsthand; either way their reputation precedes them. I tend to sway from popular opinion and think that people often err on the side of exaggeration, so I went with the mentality of “how bad can it really be?” and took the leap. The diplomatic way to summate the result of that leap is to say that I have learned a lot in these past months. I have learned a lot about patience, when to laugh, when to scream, when to cry, and also just how quickly my hair can morph into the color of the very beasts causing the change. Oddly enough, however, I have also been able to draw some conclusions about an unexpected topic: leadership.
As mentioned above there are two of them: a boy and a girl. Note that I did not say a male and a female. The terms boy and girl imply some degree of adolescence or immaturity, and although these dogs are well into adulthood, I think boy and girl more aptly describe them. In an effort to protect their anonymity I will henceforth refer to them as Bonnie and Clyde, but their real names are Shiner and Luna. To be fair, I am not sure I have ever met two creatures with better intentions than Bonnie and Clyde. They are incredibly sweet and good-natured; it’s just that they have some wires loose. Or maybe even all of their wires loose. And maybe not just loose, but severed and hanging.
So what do these two schizophrenic, hyperactive, sociopathic creatures have to do with leadership? To begin with, I am in a position to lead these two beasts. I have had to step in as a secondary authority figure and become the alpha male (or so I have to tell myself) of the pack. If you were to ask Clyde, he would probably tell you something different, but he can neither write nor speak English, so I win. To date Clyde and I hold many long standing battles, one of which is the trash. The dog loves, moreover needs, to get into the trash. He has figured out how to use the foot release (I think his cunning wire is the only one still connected) to open the lid and stick his head in, and if he still can’t get what he is after, he will just knock the whole can over and enjoy. I have yet to learn how to teach the animal not to exhibit this behavior, so as a leader in this situation I feel like I have effectively failed.
I have analyzed the aforementioned failure for months and tried in vain to formulate different ways to work with Clyde, but I had a moment this past weekend that could only be described as an epiphany. It was Saturday afternoon and he had rummaged the kitchen trash. In lieu of the normal scolding, Clyde and I had a moment of unspoken conversation marked by about 30 seconds of locked eyes and puzzled facial expression. It went something like this:
Me: “Clyde, why do you keep knocking over the trash? You know you I am just going to put it back in the can and you are going to get in trouble. Why do you do this?”
Clyde: “Why do you keep standing the can back up, picking up the trash, and scolding me? You know I am just going to knock it right back over when you turn around.”
That dialogue, while it may seem trivial, changed my frame of mind. Occupationally, I am surrounded daily by conversations about leadership. What is good leadership? What makes it? What traits coincide with it? What often arises is that leadership starts with values. In order to effectively lead individuals, a person must find a way to align his or her values with those being led. Such an alignment helps to form a bond that motivates people to work toward and achieve a common goal. Historically, those individuals who have led successfully, frequently did so by using their skills to make others believe what they believed. With certain exceptions, of course, those who have attempted to lead through intimidation failed, and failed rather quickly. An iron fist certainly has its place, but it can rapidly cause a breakdown in cohesion that will lead to resentment, or even mutiny. We have all been surrounded by people in leadership positions all of our lives (note that I didn’t say leaders). Thinking back, which of those individuals stick out in your mind? To me it isn’t the screaming football coach, tyrannical geometry teacher, or angry manager. It is those individuals who led me in such a way that I didn’t even realize I was being led; those individuals who held a strong passion for something and found a way to make that passion contagious. Exposure to that type of leadership is more than motivating, it is inspiring, and long-lasting.
What struck me this past Saturday afternoon was that Clyde and I are suffering from a terrible misalignment of values. It is not that he acts this way because he likes to anger me (at least so I think), in fact I know he doesn’t like to get in trouble. It is just that one of his core values is food. And it is not that I like to become angry and scold him, it’s just that I value cleanliness and order. The result of this misalignment is a pretty big problem, as Clyde is a dog, and a German dog at that. I don’t speak dogese or German, so this is going to be a constant struggle. I could try to adapt to his way of thinking, but that would just leave me overweight with a messy kitchen. To make a long story short, Clyde is going to win this battle and I just need to resign to cleaning up trash for the rest of his days. Leading people is different, however, as we can understand spoken language and have a stronger ability to reason. People enjoy leadership through inspiration, and a sure fire way to inspire is to tap into an individual’s values and drivers…and the first step in tapping into them is to identify them.
Defining Moments in Leadership
My colleagues and I recently attended a local breakfast meeting with Tulsa’s Lead Change Group. We focus on leadership virtually every day at Hogan, but stepping away from our desks and engaging in a community discussion about leadership proved to be both interesting and insightful. Plus, the bagels and coffee helped get the early morning off to a great start.
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The Importance of Understanding Global Leadership
Globalization has arrived. The work of individuals, teams, business units, and companies span geographic boundaries, markets, cultures, and languages. Organizations have operations around the globe, and the major economies of the world are tightly interconnected.
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There is no “I” in TALENT?
A virtual debate in the business blogosphere has been growing more and more heated over the past several weeks and months. It appears the debate began with a May 17th New York Times article that quoted Mark Zuckerberg, Facebook’s illustrious CEO, as saying, “Someone who is exceptional in their role is not just a little better than someone who is pretty good. They are 100 times better.” Although difficult to follow at first, Zuckerberg’s argument is that a brilliant individual is 100 times more valuable than a mediocre team. His statement reflects a new strategy in the War on Talent that many have also begun to adopt. According to the Times article, many of the giants in Silicon Valley are so desperate for fresh talent they have resorted to purchasing entire companies simply to acquire the gifted entrepreneurs, engineers, and programmers that created and comprise them. This new practice has been dubbed “acqhiring,” and is becoming more common in industries where the competition for talent is fierce and requires more benefits, dazzling incentives, and creative ways to attract the best and brightest.
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We Hired You To Drive Change…Now Conform
An acquaintance of mine was recently sharing her on boarding experiences for a job she just started. She was hired her based on her experiences with dynamic talent management projects and they assigned her the mission of driving progressive change in the organization’s candidate selection and leadership development programs. An early indication of the obstacles standing in her way became clear when a colleague said, “Before we brainwash you into doing business as usual around here, tell me your ideas.” At least they were self-aware of their problem!
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X-Factors of Executive Success
It was only a month ago that President Obama announced the death of America’s biggest villain and proudly proclaimed victory in the name of justice.
For most, the events that unfolded and the success of the mission were symbols of American power. But to those of us who have a passion for leadership, the more subtle story revolved around President Obama and the potential impact this success would have on perceptions of his effectiveness as a leader.
April 24, just days before he announced Bin Laden’s death, Real Clear Politics, a site that averages political polls, showed President Obama’s job approval ratings at just 45%, with 50% disapproving. Experts owed those negative poll numbers to public dissatisfaction with the economy – high gas prices, debt, and signs of inflation. Less than a month later, those perceptions had changed for the better.
The ultimate measure of senior executive selection and succession planning is how well we can identify future high performers. Even with decades of research and industry leading tools, the best we can predict is somewhere around 30% to 40% of leadership potential, and this is better than most of our competitors.
So what's going on with the other 60% to 70%? The following factors are just some of the complexities of executive performance:
Success often relies on a few key decisions.
The base rate of those critical decisions is low, making them difficult to reliably measure. How many times does a leader have the opportunity to take out Public Enemy No.1 and change his/her foreign policy reputation overnight? If you are Google, is it a good choice to buy You Tube? Skype if you are Microsoft? How much do you invest in your new product, the iPod? It only takes one decision to make or break a reputation, or a company's value.
Real impact is only visible in the long-term.
It can take years before the value of some executive decisions can be measured. Experts argue decisions made more than 40 years ago to provide covert assistance to Afghan rebels’ fight against the USSR – hailed as a US victory in the Cold War – lead to the creation of modern-day Al-Qaeda. Short-term brilliance can actually have very bad effects, and, likewise, your "dud" of a leader may just have a long-term plan in mind.
Success often means having good timing.
The US economy recently took a plunge unlike anything we could have expected. Sure, there were some leaders who were responsible for the decline (yes, I'm looking at you, Wall Street), and there were policy decisions in Washington that were equally critical (Barney Frank). There were also executives who had no control over the market’s movement. If you would have measured executive performance using a “snapshot” method during that time, you would have seen some ugly metrics: sinking revenue, poor profits, negative stock value, and low employee engagement. Now, as companies rebound, those in power reap the benefits of economic recovery without necessarily doing anything.
Success sometimes comes down to luck.
Social scientists are trained early and often on the importance of statistical significance – identifying relationships that are not due to chance alone. And whatever you call it – luck, chance, or good fortune – there is an element to executive performance which is not entirely within a leader's control. President Bush took a big hit to his reputation as an effective leader due to his response to Hurricane Katrina, even though so much of what happened – an intense hurricane hitting exactly where it did – was beyond his control.
Politics makes leadership a visible sport, but it is easy to forget some of the lessons it teaches us about measuring executive performance. You may be able to identify who has the right stuff, but judging whether someone will be truly successful is no easy task.
Finally, ask yourself about your own leaders: Do they really make good decisions? Or are they riding the coat tails of someone else's decisions, reaping the benefits of good timing, and enjoying a little luck?