Marshall Goldsmith Blog

People who have read my book What Got You Here Won’t Get You There often tell me they found themselves several times in the book!

What habits could you stop that are holding you back from getting to the top?

Look at the list below to find the 20 habits I often find in successful people. I help successful leaders become even more successful by helping them stop these habits:

1. Winning too much: the need to win at all costs and in all situations - when it matters, when it doesn’t, and when it’s totally beside the point.

2. Adding value: the overwhelming desire to add our two cents to every discussion.

3. Passing judgment: the need to rate others and impose our standards on them.

4. Making destructive comments: the needless sarcasms and cutting remarks that we think make us sound sharp and witty.

5. Starting with “No,” “But,” or “However”: the overuse of these negative qualifiers which secretly say to everyone, “I’m right. You’re wrong.”

6. Telling the world how smart you are: the need to show people we’re smarter than they think we are.

7. Speaking when angry: using emotional volatility as a management tool.

8. Negativity, or “Let me explain why that won’t work”: the need to share our negative thoughts even when we weren’t asked.

9. Withholding information: the refusal to share information in order to maintain an advantage over others.

10. Failing to give proper recognition: the inability to praise and reward.

11. Claiming credit that we don’t deserve: the most annoying way to overestimate our contribution to any success.

12. Making excuses: the need to reposition our annoying behavior as a permanent fixture so people excuse us for it.

13. Clinging to the past: the need to deflect blame away from ourselves and onto events and people from our past; a subset of blaming everyone else.

14. Playing favorites: failing to see that we are treating someone unfairly.

15. Refusing to express regret: the inability to take responsibility for our actions, admit we’re wrong, or recognize how our actions affect others.

16. Not listening: the most passive-aggressive form of disrespect for colleagues.

17. Failing to express gratitude: the most basic form of bad manners.

18. Punishing the messenger: the misguided need to attack the innocent who are usually only trying to help us.

19. Passing the buck: the need to blame everyone but ourselves.

20. An excessive need to be “me”: exalting our faults as virtues simply because they”re who we are.

Source: ©2007 by Marshall Goldsmith, with Mark Reiter, What Got You Here Won’t Get You There, pp. 40-41 Hyperion Books. Available from Amazon.com.

Life is good.

Marshall

https://MarshallGoldsmithLibrary.com

http://www.MarshallGoldsmithFeedForward.com

Marshall Goldsmith’s 24 books include What Got You Here Won’t Get You There  - a New York Times best-seller, Wall Street Journal #1 business book and Harold Longman Award winner for Business Book of the Year. His latest book Succession: Are You Ready? - is the newest edition to the Harvard Business ‘Memo to the CEO’ series.

UPCOMING EVENTS:

April 14, 2009 in Boston - Linkage: What Got You Here Won’t Get You There one day program

April 16, 2009 in New York City - IMS full day program

May 6, 2009 in Hanover, New Hampshire - Dartmouth one day program

May 11, 2009 in Chicago - Linkage OD Summit

June 16, 2009 in Chicago - Linkage: What Got You Here Won’t Get You There one day program

June 30, 2009 in Edinburgh - IMS full day program

Bestselling Author Marshall Goldsmith Examines Problems of Executive Transition WATERTOWN, Mass.–(BUSINESS WIRE)–With CEO tenure on a rapid decline, many CEOs will soon be faced with the challenge of handing the baton over to a successor. But it’s not only CEOs that go through tough transitions. Any leader, as they move up, around, or out of the organization, will eventually be planning a transition and preparing their successor for the job. How should an incumbent prepare to let go? When is the right time to start identifying potential successors and what is the best way to groom them? How should stakeholders be managed during a leadership transition?

In “Succession: Are You Ready?” bestselling author Marshall Goldsmith offers candid analysis and advice on the problem of succession from the outgoing executive’s perspective. Goldsmith, ranked among the top 10 executive educators by the Wall Street Journal, has coached over 80 major CEOs through a leadership transition. Based on his experience, Goldsmith addresses the following succession issues:

·   Why leadership transition is the greatest challenge for any leader; ·   Why thinking about succession as early as possible will ensure an effective transition; ·   How to identify and mentor potential successors and build a solid pipeline; ·   How to avoid internal political disasters when more than one candidate is being considered; ·   How to understand the personal dynamics of developing a successor and how to overcome the predictable biases and blind spots; ·   How to know when it is time to step down; ·   How to work with the board and other stakeholders, and what to expect from them during the succession; ·   How to let go and hand over responsibility with class and grace. From choosing and grooming a successor while sidestepping political minefields, to finally handing over responsibility, “Succession: Are You Ready?” walks leaders through each step in the succession process. About the Author Marshall Goldsmith is a world authority in helping successful leaders achieve positive, lasting change in behavior – for themselves, their people, and their teams. Goldsmith is the New York Times bestselling author or coeditor of 24 books, including “What Got You Here Won’t Get You There,” which won the Harold Longman Award for Best Business Book of 2007.

His major professional acknowledgements include: BusinessWeek’s most influential practitioner in the history of leadership development; The Economist’s most credible advisers in the new era of business; The Wall Street Journal’s top 10 executive educators; Forbes’ five most-respected executive coaches; Fast Company’s preeminent executive coach in America; The Times’ 50 most influential living business thinkers; and the American Management Association’s 50 great thinkers who have most impacted the field of management over the past 80 years.

Goldsmith is the cofounder of Marshall Goldsmith Partners. In 2006, Alliant International University named its schools of business and organizational psychology the Marshall Goldsmith School of Management. He is one of the few executive advisers who have been asked to work with over 100 major CEOs and their management teams. His weekly columns appear on BusinessWeek.com and HarvardBusiness.org. Almost all of his articles, videos and audio are available online at marshallgoldsmithlibrary.com.

“Succession: Are You Ready?” by Marshall Goldsmith; Harvard Business Press; February 10, 2009; Hardcover: $18.00/HC; 110 pages; ISBN: 978-1-4221-1823-8  

I was asked what advice I have for a leader when their boss says they need to exhibit more self-confidence while still being collaborative and authentic. This is a great question.

I rarely encounter this issue in my work with CEOs and potential CEOs because people at the top of huge organizations don’t often have self-confidence problems. But I have had several inquiries lately about helping future leaders who need to demonstrate more self-confidence.

Here are a few suggestions that I give leaders who have self-confidence issues:

1. Decide if you really want to be a leader. Many of the MBAs who report self-confidence issues are brilliant technicians. They often find the uncertainty and ambiguity of leading people very unsettling. They are looking for the “right answers” – similar to the ones in engineering school. In some cases, brilliant technical experts should continue to be brilliant technical experts – and not feel obligated to become managers.

2. Make peace with ambiguity in decision making. There are usually no clear right answers when making complex business decisions. Even CEOs are guessing.

3. Gather a reasonable amount of data, involve people, then follow your gut and do what you think is right.

4. Accept the fact that you are going to fail on occasion. All humans do.

5. Have fun! Life is short. Why should you expect your direct reports to demonstrate positive enthusiasm, if they don’t see it in you?

6. Once you make a decision, commit and go for it. Don’t continually second guess yourself. If you have to change course, you have to change course. If you never commit, all you will ever do is change course.

7. And finally, demonstrate courage on the outside, even when you don’t feel it on the inside. We are all afraid on occasion — that is just part of being human. If you are going to lead people in tough times, you will need to show more courage than fear. When direct reports read worry and concern on the face of a leader, they begin to lose confidence in the leader’s ability to lead.

Originally published in Harvard Business Online, 2008.

Life is good.

Marshall

MarshallGoldsmithLibrary.com
www.MarshallGoldsmithFeedForward.com

UPCOMING EVENTS:

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

February 7, 2009 in San Diego - Society of Consulting Psychology and the Society of Psychologists in Management Annual Meeting,  San Diego Hilton, Mission Bay

March 19, 2009 - The New Reality of Business Conference - London

April 14, 2009 in Boston - Linkage: “What Got You Here Won’t Get You There” one day program

June 16, 2009 in Chicago - Linkage: “What Got You Here Won’t Get You There” one day program

 

Companies have wasted millions of dollars and countless hours of employees’ time agonizing over the wording of statements that are put on plaques and hung on walls. There is a clear assumption that people’s behavior will change because the pronouncements on plaques are “inspirational” or because certain words “integrate our strategy and values.” There is an implicit hope that when people — especially managers — hear great words, they will start to exhibit great behavior.

Sometimes these words morph to keep up with the latest trends in corporate-speak. A company may begin by striving for “customer satisfaction,” then advance to “total customer satisfaction,” and finally reach the pinnacle of “customer delight.”

But this obsession with words belies one very large problem: There is almost no correlation between the words on the wall and the behavior of leaders. Every company wants “integrity,” “respect for people,” “quality,” “customer satisfaction,” “innovation,” and “return for shareholders.” Sometimes companies get creative and toss in something about “community” or “suppliers.” But since the big messages are all basically the same, the words quickly lose their real meaning to employees — if they ever had any in the first place.

Enron is a great example. Before the energy conglomerate’s collapse in 2001, I had the opportunity to review Enron’s values and even saw a wonderful video on Enron’s ethics and integrity. I was greatly impressed by the company’s espoused high-minded beliefs and the care put into the video. Examples of Enron’s good deeds in the community and the professed character of Enron’s executives were particularly noteworthy. It was one of the most smoothly professional presentations on ethics and values that I have ever seen. Clearly, Enron spent a fortune “packaging” these wonderful messages.

It didn’t really matter. Despite the lofty words, many of Enron’s top executives either have been indicted or are in jail.

The situation couldn’t be more different at Johnson & Johnson. The pharmaceutical company is famous for its “Credo,” which was written many years ago and reflected the sincere values of the leaders of the company at that time. The J&J Credo could be considered rather quaint by today’s standards. It contains several old-fashioned phrases, such as “must be good citizens — support good works and charities — and bear our fair share of taxes” and “maintain in good order the property that we are privileged to use.” It lacks the slick PR packaging that I observed at Enron.

Yet, even with its less-powerful language and seemingly dated presentation, the J&J Credo works — primarily because over many years, the company’s management has taken the values that it offers seriously. J&J executives have consistently challenged themselves and employees not just to understand the values, but to live them in day-to-day behavior. When I conducted leadership training for J&J, one of its very top executives would spend many hours with every class. The executives’ task was not to talk about compensation or other perks of J&J management; they were there to discuss living the company’s values.

My partner, Howard Morgan, and I completed a study of more than 11,000 managers in eight major corporations. (See “Leadership Is a Contact Sport,” s+b, Fall 2004.) We looked at the impact of leadership development programs in actually changing executive behavior. As it turns out, each of the eight companies had different values and different words to describe ideal leadership behavior. But these differences in words made absolutely no difference in determining the way leaders behaved. Ironically, one company spent thousands of hours composing just the right words to express its view of how leaders should act — in vain. I am sure that the first draft would have been just as useful.

At many companies, performance appraisal forms seem to undergo the same careful scrutiny as credos. In fact, more effort seems to be given to producing the perfect words on an appraisal form than to managing employee performance itself. I worked with one company that had used at least 15 different performance appraisal forms and was contemplating yet another change because the present sheet “wasn’t working”! If changing the words on the page could improve the performance management process, then every company’s appraisal system would be perfect by now.

Companies that are doing the best job of living up to their values and developing ethical employees, including managers, recognize that the real cause of success — or failure — is always the people, not the words.

Rather than wasting time on reinventing words about desired leadership behavior, companies should ensure that leaders get (and act upon) feedback from employees — the people who actually observe this behavior. Rather than wasting time on changing the words on performance appraisal forms, leaders need to learn from employees to ensure that they are providing the right coaching.

Ultimately, our actions will say much more to employees about our values and our leadership skills than our words ever can. If our actions are wise, no one will care if the words on the wall are not perfect. If our actions are foolish, the wonderful words on the wall will only make us look more ridiculous.

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

MY UPCOMING SCHEDULE:

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

February 7, 2009 in San Diego - Society of Consulting Psychology and the Society of Psychologists in Management Annual Meeting,  San Diego Hilton, Mission Bay

How would you hire people if everyone is highly skilled, well educated at the same school, and locked in a dead heat of accomplishment, posting exactly the same “lifetime batting average”?

How would you decide whom to promote and whom to cast aside?

Chances are you would start paying very close attention to how people behave — how they treat colleagues and clients, how they speak and listen in meetings, how well they extend the minor courtesies that either lubricate daily work life or create friction. Welcome to the real world at the higher levels of organizational life.

We apply these behavioral criteria to almost any successful person, whether it’s our CEO or our plumbing contractor. But sometimes we forget to apply them to ourselves. And in turn, we forget that our behavior may be holding us back.

All other things being equal, your people skills (or lack thereof) become more pronounced the higher up you go. In fact, even when all other things are not equal, your people skills often make the difference in how high you go. Who would you rather have as a CFO? A moderately good accountant who is great with people outside the firm and skilled at managing very smart people? Or a brilliant accountant who’s inept with outsiders and alienates all the smart people under him?

Not a tough choice, really. The candidate with superb people skills will win out every time, in large part because he will be able to hire people smarter than he is about money and he will be able to lead them. There’s no guarantee that the brilliant number cruncher can do that now or any time in the foreseeable future.

We all have certain attributes that helped us land our first job. These achievements go on our resumes. But as we become more successful, those attributes recede into the background and more subtle traits emerge. It’s not enough to be smart. You have to be smart — and something else. At some point, you get the benefit of the doubt on skill issues.

For example, we assume our doctors know medicine, so we judge them on their bedside manner. And not many people remember that Jack Welch has a PhD in chemical engineering. That’s because none of the problems he encountered in his last 30 years at GE were in any way related to his skill at chemical titration or formulating plastics.

When he was vying for the CEO job, the attributes holding him back were strictly behavioral: his brashness, his blunt language, his unwillingness to suffer fools. The soft behavioral skills came to the fore only after he delivered profits and ascended the GE ladder. That’s when the GE board wanted to know if he could behave as a CEO.

What if you had to prepare a resume where you couldn’t highlight the elite college you graduated from, or your five years at McKinsey, or even your title at your current job?

You can’t boast about the profits you posted, the sagging division you turned around, or the product you launched and turned into a stand-alone brand. The only data you can put on your resume are your interpersonal skills (which, for the purposes of this exercise, must be documented and authentic). What would they be?

* To be able to listen?
* To give proper recognition?
* To share — whether it’s information or credit for a success?
* To stay calm when others panic?
* To make midcourse corrections?
* To accept responsibility – and admit mistakes?
* To defer to others, even (especially) those of lesser rank?
* To let someone else be right some of the time?
* To resist playing favorites?

You see where I’m going?

This quick list of attributes, while attractive in a junior employee, is not the sort of thing that junior employees get lauded for. But further along in your career curve, when it’s time to step up into a leadership position, you’re going to need these qualities in spades.

Stripped of your technical mastery and your hall-of-fame-quality lifetime batting average, what are the interpersonal skills that will make you rise above the leadership pack? Pick one, any skill that you feel you’re lacking. And start developing it . . . now.

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

September 15, 2008 - New York - SHRM - contact Marshall if interested

October 2, 2008 - The Conference Board - Download Schedule - Register with discount: NM1

October 8, 2008 - Boston - Linkage: “What Got You Here Won’t Get You There” one day program

October 13, 2008 - Palm Desert, CA - Global Institute of Leadership Development - Register with discount: GILD08-PW

October 29, 2008 - Japanese Business Executives - Tokoyo, Japan

October 30, 2008 - Japanese Business Coaches - Tokoyo, Japan

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

To view my complete schedule, click here.

A lot of executives assume that their staff members should act exactly as they do — and enjoy what they enjoy. Leaders are especially prone to this mistake when it comes to their communication style. When I began working with Bob, the CEO of a successful company, I saw this problem play out before my eyes.

The feedback on Bob didn’t quite add up. On the one hand, it said he often stifled open discussion. On the other, it said he was always changing his mind. These two characteristics are often mutually exclusive. People who discourage open discussion aren’t usually people who are always changing their mind.

Things only made sense after Bob’s chairman told me, “You have to understand, Bob is the world champion at debating with others and at arguing with himself. He was a star on one of the best college debating teams in the world.”

Time and again, Bob’s natural response with any new idea was to go into debate mode and try to shoot holes in it. Let’s say Harry, three levels below Bob in the organization, expressed his opinion in a meeting. Bob would leap into the conversation and present the other side of the argument. Harry, considering his status, wasn’t likely to be as quick as Bob and almost certainly not as good at debate. Bob just made Harry look very stupid in front of his colleagues.

Harry’s reaction to the debate was very simple: Quit expressing opinions that Bob may not want to hear. Even better, play it safe and quit expressing opinions at all. Bob thought he was debating; Harry felt like he’d been stepped on.

Bob compounded the problem by debating with himself as well. Someone would say, “Why don’t we try this?” and Bob would approve. But a few days later, after he had enough time to debate his decision with himself, he’d change his mind, saying, “Maybe that wasn’t such a good idea.” In his head, he was open-minded. In his staff’s collective brain, he was confusing the hell out of them.

My job was to make Bob see the problem, which I like to call the “golden-rule fallacy.” He assumed that his people were just like him and, therefore, liked to be treated the same way he did.

When I told Bob about the feedback he had received, he quickly blurted out, “There must be some misunderstanding here! I love it when we can all take the gloves off and tell each other what we really think.”

“That’s nice. But they aren’t you,” I said.

“What’s wrong with me expressing an opinion, and someone else expressing an opinion, and we have a healthy debate?” he asked.

True to form, Bob had lured me into a heated debate. I replied, “Well, yes, but you’re the CEO — and they aren’t. You have advanced degrees and a big IQ — and they may not. You were the star debater at your top university — and they weren’t. Their odds of beating you at this game are close to zero. So they opt not to play.”

“What about Jim?” Bob countered. “The other day he and I had a heated disagreement. He told me what he thought about one of my plans in no uncertain terms. We had a real head-to-head discussion and ended up with a solution that was better than either one of us started with. Jim told me how much he appreciated my candor and how much fun it was to argue. How do you explain that?”

After laughing at Bob’s animated version of his discussion, I replied, “Jim is a younger version of you! He has a great education; he’s brilliant and quick. You don’t intimidate him. Unfortunately for you, very few people in the world are like Jim, or for that matter, like you. If they were, your style would be perfect.”

All of a sudden, the light bulb went on for Bob. He saw that he was operating under a bogus assumption about how to treat others. So he changed his behavior.

He paid close attention to his debating urges and stifled them when they put his staff at a huge disadvantage. He routinely invited people to voice their opinions in meetings and thought once, twice, three times before challenging them.

As a CEO, he started making clear decisions and quit causing confusion by publicly debating with himself. After 12 months, Bob’s team perceived him as a better boss.

The golden rule doesn’t always work in leadership. If you manage your people the way you’d want to be managed, you’re forgetting: You’re not managing you!

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com
Marshall’s Upcoming Schedule:

September 15, 2008 - New York - SHRM - contact Marshall if interested

October 2, 2008 - The Conference Board - Download Schedule - Register with discount: MG1

October 8, 2008 - Boston - Linkage: “What Got You Here Won’t Get You There” one day program

October 13, 2008 - Palm Desert, CA - Global Institute of Leadership Development - Register with discount: GILD08-PW

October 29, 2008 - Japanese Business Executives - Tokoyo, Japan

October 30, 2008 - Japanese Business Coaches - Tokoyo, Japan

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

How important is integrity in a business environment?

Enron’s leaders did a wonderful job of preaching the value of challenging the system…so did Andersen’s…so did NASA’s. Everyone seems to know that encouraging upward challenge is a key to maintaining corporate integrity. This is relatively easy to understand; it is just hard to do. After corporate meltdowns, it is amazing how many people claim that they knew there could be huge problems. It is even more amazing how few people effectively expressed these concerns before the problems were reported in the news.

Warner Burke has pointed out that “knows how to influence up in a constructive way” scored last place on managerial effectiveness in all items when people evaluated their managers in NASA – immediately before the Columbia space shuttle exploded. While lack of effective upward challenge was not the only cause of the explosion, it was a clear contributing factor. The same story is true in almost all organizational disasters and examples of corporate wrongdoing.

I’d like to suggest some organizational guidelines aimed at encouraging upward challenge and preserving corporate integrity. None are a reinvention of the wheel, and they certainly are not all encompassing, but I have seen them work in highly respected companies and I hope they can provide you with a good discussion point for reviewing your own organizational processes. While some of them may seem extreme, the organizational cost of integrity violations is — and should be — huge. If the last two years have taught us anything, it should be that ethical violations can kill even the most successful companies. The cost of preventing ethical problems will never exceed the cost of dealing with ethical problems.

Suggested Guidelines for Managers and Employees:

• If you are ever asked to do anything that you believe may be unethical, it is not your right to express your concern – it is your responsibility.

One of the world’s most highly-respected service companies clearly communicates this guideline to all employees, and it is a major message in their new employee orientation. I cannot think of any organization that should not communicate this same clear message, yet very few do.

All employees need to express their concerns if the decision may be unethical. In many cases directives that appear to be unethical are just that. Even the perception of an ethics lapse can be damaging to the entire company. Therefore, employees at all levels need to take responsibility to ensure that their organization engages in ethical business practices. After all, managers cannot read their employee’s minds.

• Employees that are not satisfied with their manager’s response to any ethical challenge should have the responsibility to continue this challenge to the next level of management.

If a resolution cannot be reached with the immediate manager, the employee should continue to challenge up. This type of challenge should not be viewed as an indictment of either the manager or the employee. Honest, well-meaning people can have very different views of the ethical dilemmas that surround the same decision.

• Any manager that threatens concerned employees or knowingly discourages upward challenge should be fired.

If only one employee is punished for honestly expressing ethical concerns, the word will quickly spread throughout the organization. Honest upward communication cannot be treated as an option. It needs to be a requirement. Managers at all levels need to understand that there are severe and immediate consequences for blocking the flow of vitally needed information.

• Consideration of integrity violations should be conditions of employment and have nothing to do with job performance.

One of the organizations that I respect the most has a clear rule: “All employees who knowingly lie, cheat or steal will be immediately dismissed, regardless of their performance on the job.” In this organization, every employee is taught that even the best performer, if found to have committed an ethics violation, will still be fired. Their logic is simple — If we allow small amounts of lying, where do we draw the line? Many of the well-publicized corporate scandals happened not merely because of one event. They happened because of the “creeping dishonesty” that can occur when small violations are ignored and increasingly corrupt practices evolve over time.

• Employees who do not feel comfortable using the normal chain of command should be provided with an alternative mechanism for upward communication.

In spite of the best corporate guidelines, the best training, and the best intent, some individual managers may still be very intimidating. Every employee needs a way to go around the system when they feel threatened by line management. They must be trained on how and when to use these alternate channels.

• Managers should proactively ask for suggestions on how to improve the organization, rather than passively waiting for employees to express concerns.

As Peter Drucker has said, “The leader of the past knew how to tell. The leader of the future will know how to ask.” If employees don’t feel free to communicate openly on business concerns, it is highly unlikely that they will feel free to communicate openly on ethical concerns. If they have an open dialogue about business concerns, any ethical concerns will probably emerge as part of the ongoing conversation.

• Both managers and employees should be trained on how to encourage and provide upward challenge.

Providing traditional ethics training may be a waste of time for many employees. The vast majority of employees are probably ethical in the first place! They merely need to learn how to recognize potential integrity issues and effectively communicate these in a way that can prevent ethics problems.

The corporate scandals of the last few years have resulted in a lack of trust for major organizations. The conditions that led to ethics issues will not be fixed by having employees attend training programs or listen to motivational talks. Organizations that establish and implement clear processes for encouraging upward challenge can do a great deal to prevent problems involving ethic, integrity and values. Trust is easy to lose and hard to regain. For many employees and for the public at large, it may take years of concerted effort to rebuild the credibility of large corporations. From both a business and values perspective, it is worth it!

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

Click here for Marshall’s Upcoming Schedule

In Leader to Leader’s Premier Issue, I discussed retaining high-impact performers.

The workplace is changing. Job security isn’t what it used to be. We tend to focus, understandably, on the profound impact these and other workplace changes are having on the lives of individuals. But too often leaders overlook the equally profound impact these changes are having on their organizations.

The fact is, the “new work contract”- employees taking responsibility for their own careers, and corporations providing them with career-enhancing but impermanent opportunities-can be as difficult for organizations to manage as for individuals. We as leaders still understand little of the mechanics of retaining essential high-performers in turbulent times.

Our task is complicated by four additional, less widely acknowledged trends:

* The reduced status of working for a “Fortune 500″ corporation.

* The frequent lack of connection between pay and contribution.

* The decline in opportunities for promotion.

* The rise in the influence of the “knowledge worker”.

Peter Drucker has noted the dramatically increased importance of the knowledge worker in modern organizations. Yet we are often still unsure what that means for how we should lead. Bill Gates has said that Microsoft would do “whatever it takes” to attract and retain the brightest software developers in the world.

Innovative high-technology corporations (such as Sun Microsystems) pay employees large bonuses to recruit top talent. In tomorrow’s world the “intellectual capital” brought in by high-knowledge employees will be a major, if not the primary, competitive advantage for many corporations. As the perceived value of key knowledge workers increases, the competition to hire these workers will intensify.

A Strategy for Retaining High-Impact Performers

Leaders can no longer afford to let the vagaries of the job market determine who leaves and who stays with the organization. We must learn to manage our human assets with the same rigor we devote to our financial assets. The following seven steps can help you accomplish that task:

1) Clearly identify whom you want to keep.

In recent years many organizations have focused on those people they should get rid of rather than those they should keep. Many downsizing “packages” give all employees with similar levels of experience the same incentive to leave. Unfortunately-for the organizations-the employees who decided to leave were often the high-impact performers who could find other work quickly.

2) Let them know that you want to keep them.

Amazing as it may seem, many high-impact performers who are asked why they’ve left an organization report, “No one ever asked me to stay! ” Many organizations have deliberately not told high-impact performers that they were special in any way for fear of alienating others. In the future it will become increasingly easy to retain “average” performers and increasingly difficult to retain high-impact performers.

3 ) Provide recognition.

Although compensation is an important factor for retaining high-impact performers, several studies indicate that it is currently not “the” most important factor. Typically, the chief reasons great people leave major organizations are lack of recognition, lack of involvement, and poor management The CEO of a leading telecommunications company has recently embarked on an innovative approach.

Division-level executives provide a quarterly report on high-impact performers who should be recognized. The CEO calls these individuals personally, thanks them for their contributions, and asks for their input on how the corporation can increase effectiveness. The CEO believes this process not only helps retain key talent but also generates great ideas for continuous improvement.

4) Provide opportunities for development and involvement.

One of the world’s largest consulting/ accounting firms has embarked on an original program to identify and cultivate high-potential leaders. As part of the process, young leaders engage in an “action learning” project in which they work on real-life problems facing the firm.

This gives young leaders a fantastic developmental opportunity and gives the firm valuable input on solving real problems. It also enhances the young leaders’ commitment to stay with the firm. The firm’s leaders say that such a process would not have been tried just a few years ago, for fear of alienating other partners, but that today the firm has no choice but to identify and retain high-impact partners.

5) Challenge the compensation plan.

Organizations unwilling to make performance rather than mere seniority the key driver of pay will face an increasing challenge in keeping top talent, especially young talent. One Fortune 500 industrial company recently refused to implement a variable, performance-based compensation plan because half the employees felt uncomfortable with the concept.

The corporation neglected to measure which half felt uncomfortable with more differentiated pay; but my guess is that it was the lower performers. High-impact performers of the future will be able to demand and receive substantially more pay than their lower performing peers. A “socialistic” compensation plan combined with lowered potential for promotion leads to an “average” workforce.

6) Relax the culture.

In addition to reducing bureaucracy, high- performing, high-tech companies like Netscape, Sun Microsystems, and AT&T Wireless (formerly McCaw Cellular) are known for providing freedom in dress code, scheduled hours, and lifestyle choices. While employees work very hard, they appreciate the lack of rules, regulations, and restrictions that can inhibit their freedom without increasing their productivity.

7) Provide intrapreneurial opportunities.

Gifford Pinchot (inventor of the term intrapreneur) has shown how major corporations can provide opportunities for semiautonomous enterprises to operate within the larger corporate structure.

By allowing high-potential leaders to “run a business” inside a larger business, corporations can gain commitment while simultaneously developing people. People who see opportunities for “ownership” and personal development are much more likely to stay with the organization.

In the past when a high-impact performer in a major corporation was offered a position at another company, the employee was likely to say no. Most managerial and professional jobs offered good pay, job security, promotion potential, and status.

Today the high-impact employee is much more likely to say yes. To retain such talent in the future, organizations will need to take decisive action.

Only those organizations able to create a dynamic new human resource model will retain the high-knowledge talent needed to succeed in tomorrow’s globally competitive environment.

Life is good.

Marshall

UPCOMING EVENTS:

July 25, 2008: Join me for a special live conversation on Friday July 25th with Learn From My Life. This 60 minute will be driven by your questions and will enable us to drill deeper into the key behavioral changes that will make you a better leader and more accomplished individual.

August 1, 2008 - Dartmouth - Tuck Executive Program

August 25-26, 2008 - Indian School of Business - Hyderabad

September 15, 2008 - New York - SHRM - contact Marshall if interested

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www.MarshallGoldsmithFeedForward.com

Our greatest challenge as leaders isn’t understanding the practice of leadership; it’s practicing our understanding of leadership.

The consistent and ongoing misassumption of almost all leadership development programs is “if they understand, they will do.” This assumption is not valid in any aspect of our lives, and leadership development is no exception.

If the “understanding equals doing” equation were accurate, everyone who understood that they should go on a healthy diet and work out would be in great shape. Almost everyone in America knows what we are supposed to do. Over the years our knowledge of the importance of diet and exercise has gone up dramatically. Why is it then that Americans weigh more than we have ever weighed in our history? Why is obesity considered the “new epidemic”? We all know what it takes to get in shape, we just don’t do it. I live in California. I think it was Gov. Arnold Schwarzenegger who wisely noted, “Nobody ever got muscles by watching me lift the weights!”

Companies have invested millions of dollars in developing profiles that describe the behavior of their desired leader of the future. I have probably reviewed a hundred of these profiles. I have helped write about 70 of them. Most make a lot of sense. They usually suggest that leaders should have high integrity, focus on customer service, deliver quality products, develop great people and encourage innovation. Some of these profiles are organized around values and some around competencies. Many say basically the same thing – but in a language that fits their corporation’s culture. Most corporations know what their leaders should do and do a fine job of communicating this message.

Leaders who are not working for a company that describes desired leadership behavior can still read books on the topic. One of my books, Global Leadership: The Next Generation (with Cathy Greenberg, Alastair Robertson and Maya Hu-Chan), describes research findings (sponsored by Accenture) involving over 200 specially selected high-potential leaders from 120 global organizations. This book, like others of its type, paints a clear picture of desired behavior for future leaders. Kouzes and Posner, Zenger and Folkman, the Center for Creative Leadership, Personnel Decisions Incorporated and several others have written books on this topic. My guess is that any leader whose behavior even approximates the behavior that is described in any of these books will be viewed as an outstanding role model. Anyone who reads these books can understand what to do.

I recently had the privilege of working with the CEO and over 2,000 of the top leaders in one of the world’s most admired companies. The company had developed a well-thought-out profile of desired leadership behaviors. Leaders in the company received 360-degree feedback to help them understand how their actual behavior was seen as matching this desired profile. All were trained to respond to co-workers on their feedback using a very simple follow-up process. At the end of the training, leaders were asked in a confidential survey if they were going to do what was taught in the program. Almost 100 percent said that they understood and saw the value of what was being taught. They almost all vowed that they were going to follow up with their co-workers, work on their “areas for improvement” and get better.

A year later, the same leaders and their co-workers were surveyed to see what happened. Many of the leaders (about two-thirds of the total group) actually did what they committed to do and, as a group, they were seen as becoming much more effective. Some leaders, however, did absolutely nothing as a result of receiving feedback and attending training, and as a group they were seen as improving no more than can be attributed to random chance. The training that they attended produced no more change than staying home and watching sitcoms.

Howard Morgan and I published an article entitled “Leadership Is a Contact Sport” in the Fall 2004 issue of Strategy+Business that involved over 86,000 respondents from eight major corporations. Just like the 2,000 leaders mentioned above, every leader in our study received feedback. They were all given some very simple instructions on how to follow up with co-workers and how to become more effective. Our results showed that there was no correlation between understanding and doing. The leaders who did absolutely nothing understood what to do as well as the leaders who actually executed on their improvement plans. Amazingly, the leaders who did nothing rated the value of the programs just as highly as the leaders who executed. The “did nothings” not only understood what to do – they saw the value in doing it.

Over the years, I have had the opportunity to interview hundreds of leaders in the “did nothing” category. I always ask them why they didn’t do what they said they would do after their leadership development programs. Their answers never have anything to do with ethics or integrity. In spite of some terrible recent examples of ethics violations, most leaders that I meet are highly ethical people. They are not liars or phonies. They truly believed that they should change and that this was the “right thing to do”. Their answers never have anything to do with a lack of intelligence or understanding. These are very bright people. They not only saw the value in what they committed to do, they understood what to do and how to do it.

Our research paints a compelling picture. Peole don’t get better because they go to “programs”. They don’t get better because they listen to motivational speeches. They only get better if they pick something important to improve, involve the people around them and follow up in a disciplined way. Long-term change in leadership effectiveness takes time, follow-up and discipline – not just understanding.

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

Marshall’s Upcoming Schedule:

August 1, 2008 - Dartmouth - Tuck Executive Program

August 25-26, 2008 - Indian School of Business - Hyderabad

September 15, 2008 - New York - SHRM - contact Marshall if interested

I was privileged to hear General Mills CEO Steve Sanger tell 90 of his colleagues: “As you all know, last year my team told me that I needed to do a better job of coaching my direct reports. I just reviewed my 360-degree feedback. I have been working on becoming a better coach for the past year or so. I’m still not doing quite as well as I want, but I’m getting a lot better. My coworkers have been helping me improve. Another thing that I feel good about is the fact that my scores on ‘effectively responds to feedback’ are so high this year.”

While listening to Steve speak so openly to coworkers about his efforts to develop himself as a leader, I realized how much the world has changed. Twenty years ago, few CEOs received feedback from their colleagues. Even fewer candidly discussed that feedback and their personal developmental plans. Today, many of the world’s most respected chief executives are setting a positive example by opening up, striving continually to develop themselves as leaders.

In fact, organizations that do the best job of cranking out leaders tend to have CEOs like Steve Sanger who are directly and actively involved in leadership development. That has certainly been my experience.  This has also been confirmed by Hewitt Associates, one of the largest HR consulting firms. Hewitt and Chief Executive magazine put General Mills on their latest list of the top-20 companies for leaders, among such familiar names as IBM and General Electric.

Hewitt found that these organizations tend to more actively manage their talent. They put lots of focus on identifying high-potential people, better differentiate compensation, serve up the right kinds of development opportunities, and closely watch turnover. But crucial to all these efforts were CEO support and involvement.

No question, one of the best ways top executives can get their leaders to improve is to work on improving themselves. Leading by example can mean a lot more than leading by public-relations hype.

Michael Dell, whose company made the Hewitt list, is a perfect example. As one of the most successful leaders in business history, he could easily have an attitude that says, “I am Michael Dell and you aren’t! I don’t really need to work on developing myself.”

Michael, however, has the opposite approach. He has done an amazing job of sincerely discussing his personal challenges with leaders across the company. He is a living case study from whom everyone at Dell is learning. His leadership example makes it hard for any leader to act arrogant or to communicate that he or she has nothing to improve upon.

Johnson & Johnson, tied for first on the top-20 list, has successfully involved its executives in leadership development. Its CEOs and top executive team regularly participate in a variety of leadership-building activities. Having a dialogue with the CEO about his business challenges and developmental needs makes it a lot easier for employees to discuss their own business challenges and developmental needs.

Executive candor can even help turn around a troubled company. Consider Northrop Grumman, the aerospace defense contractor. CEO Kent Kresa inherited a company that had a poor reputation for integrity, a battered stock price, and an unfortunate reputation as one of the least-admired companies in its industry. His leadership team reversed the company’s poor image and engineered an amazing turnaround – ultimately becoming the Forbes’ most-admired company.

From the beginning of the process, Kent led by example. He communicated clear expectations for ethics, values, and behavior. He made sure that he was evaluated by the same standards that he set for everyone else. He consistently reached out to coworkers. He didn’t just work to develop his leaders–he created an environment in which the company’s leaders were working to develop him.

Unfortunately, in the same way that CEO support and involvement can help companies nurture leaders, CEO arrogance can have the opposite effect. When the boss acts like a little god and tells everyone else they need to improve, that behavior can be copied at every level of management. Every level then points out how the level below it needs to change. The end result: No one gets much better.

The principle of leadership development by personal example doesn’t apply just to CEOs. It applies to all levels of management. All good leaders want their people to grow and develop on the job. Who knows? If we work hard to improve ourselves, we might even encourage the people around us to do the same thing.

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

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