How a leader handles adversity or a crisis can make or break their legacy. Handle it properly and people will follow. Handle it improperly and people will distance themselves.
Leadership currency is created in the handling of various situations. The better those situations are dealt with, the more leadership currency is accumulated. The reason leadership currency is important is because once some has been accumulated, people will give you the benefit of the doubt when you make a mistake. The more leadership currency you have, the more forgiving people will be when you make a mistake.
And although this may sound counter-intuitive, you can actually accumulate more leadership currency by the way you handle a mistake that you have made.
So how do you accumulate leadership currency?
- You are transparent about issues and problems within your organization. You tell the truth about what is happening, what is being done about it, and how long it will take.
- You take accountability. You accept blame where appropriate and don’t point fingers at others.
- You show leadership. You stay in the forefront and deflect criticism away from your team members and peers. You lead the charge in dealing with broader issues that affect your entire industry.
- You show emotion. You show genuine compassion and sympathy for those that have been impacted.
- You act decisively. You take action quickly, even if that action is unpopular. The greatest fear is the fear of the unknown, so you need to remove that.
Some examples of leaders who accumulated a great deal of leadership currency during adversity include Michael McCain of Maple Leaf food during the listeria crisis, Rudy Giuliani after 9/11, and Lou Gerstner when he first took over at IBM.
What are you doing to build up your leadership currency?
When you are able to make yourself and your organization an object of interest, customers will come to you. It’s not just about branding and reputation, it’s about creating a buzz and providing something that people are interested in and want to be a part of. Here are some ways to become an object of interest:
- Write a book or an article providing insights and strategies that no one else has talked about.
- Offer an exclusive event with a high profile speaker or celebrity.
- Take a position on an industry issue and be very vocal and public about that position and how it will improve the entire industry.
- Provide recommendations based on data and insights that no one else has access to.
- Gather endorsements and testimonials from well-known people and companies.
Becoming an object of interest increases profit, accelerates new customer acquisition, strengthens customer retention, and makes it easier to attract the best people.
What are you doing to become an object of interest?
I was speaking with a colleague yesterday before a volunteer fundraising meeting we were both attending and we were discussing growing my business internationally. He asked, “How have you been able to grow your business internationally with no staff?”
As I was describing to him how I have been successful by asking for and receiving introductions from friends and colleagues, and mentioned some of the places where I am building strong connections, another colleague entered the room. She overheard me mention a couple of cities and said, “I know people in those cities.” She then mentioned a few people she knew and their roles and asked if I would be interested in being introduced to them. I said, “Of course.”
I then looked at my other colleague and said, “You just saw firsthand how I’ve been able to grow my business internationally.”
If you are clear about your strategy (mine is growing internationally), then the tactics you employ need to be directly aligned with that strategy (in my case, asking for direct introductions to prospective clients outside of Canada from people I know well).
How well aligned are your strategy and tactics?
I gave a talk at the Rotman School of Management this morning on redefining operational excellence. We had an interesting discussion about how organizations with different divisions and types of employees could implement a mindset of excellence. Many of the comments were related to different divisions and groups of employees within the same organization not buying into the same vision because they had different customers or different motivations.
Pursuing excellence doesn’t mean that all divisions or employees do things the same way. Excellence is not necessarily about standardization. Here’s what it is about:
- Communicating a desired outcome that the organization wants to achieve (eg. 80% customer retention).
- Setting expectations within each division or group of employees on how each will contribute to achieving that desired outcome.
- Identifying best practices from any of the divisions and determining how to apply them effectively across all the divisions.
- Aligning the tactics being employed by front line people with the desired outcome of the organization.
That is the difference between a mindset and a methodology. With a methodology, you attempt to pick up a process or guideline and move it elsewhere. With a mindset, you first determine what you want to achieve, then you determine the fastest and most effective way to achieve it.
Which way does your organization behave?
Apple just announced it’s profits for the last quarter and they are higher than any other company has ever reported. Higher than the largest international banks. Higher than the most successful oil and gas companies. Higher than most country’s GDP.
When Steve Jobs died and Tim Cook took over, most thought that Apple was doomed. How would they fare without their charismatic leader? Well, I’d say they are doing just fine. Cook doesn’t have the flair for the dramatic that Jobs has. He doesn’t have the angry episodes that used to drive employees crazy. But what he does have is a fierce ability to get things done.
When you look at some of the most successful companies right now, or ones that have been turned around, it’s because the leader has an intense focus on execution. On getting the important things done and done well. On ensuring that employees know their role in achieving the best result. On measuring success in a disciplined way. On deliberately focusing on the organization’s strengths.
Is it possible that the best decision Steve Jobs ever made was hiring Tim Cook?