We have all heard the parable of the boiling frog right? The story has been retold many times over and is supposedly based on a scientific study- a study that I do not intend to every replicate. The story goes that if you place a frog into a pot of boiling water, it will immediately jump out and save itself. But… if the frog is placed into a pot of relatively cool water the frog will happily swim around. As the water is slowly heated the frog continues to ignore the slow changing temperature and as it does not perceive the danger doesn’t try to jump out. And eventually when the water reaches the boiling point it is too late and the frog is boiled alive.
So does this story have a relevance for us as leaders and if so what? Could it be a relevant lesson about change and how we react to it when it is both immediate versus when it is gradual? Does it illustrate well how we need to be watchful of not only the most imminent and immediate changes in our work or business environment but also careful to watch those slowly changing trends and to pay attention not just to obvious threats but also to more slowly developing ones. For example – what if every year the local lake levels went down an inch? Maybe we would notice that, maybe the discussion about global warming would “heat up” a bit. But more likely we would suddenly take notice when the lake was close to dry. What about those slowly changing trends in the business world we operate? There are those that might argue that the Big 3 automakers waited too long in the slowly boiling water (e.g., decreasing sales numbers, marketplace discussions about needing alternative energy driven vehicles, etc.) before realizing the impacts of their complacency.
Now there are those who would debunk this parable with scientific research. In a 1995 Fast company article about this parable (http://www.fastcompany.com/magazine/01/frog.html) they put the story to a test and found in each case as the water got even a little water the very squirmy frogs leaped out. A quote n the story from a Professor Doug Melton, Harvard University Biology Department, says, "If you put a frog in boiling water, it won't jump out. It will die. If you put it in cold water, it will jump before it gets hot -- they don't sit still for you."
So there you go – another quagmire of sorts. As a leader of teams how well do you know how your team will react to changes in the work environment? How well prepared are they to “leap” out of danger or towards a new situation or innovation? How about ourselves? Do we react to the sudden emergencies and changes while ignoring the subtle changes around us? How about during the good times – do we choose to purposely ignore what might be happening as bask in the cool waters?
Teams can be a great thermometer for us as leaders. They provide a broader, diverse perspective. But are we listening to them? Are we using the amazing diversity in thinking inherent in teams for solving problems and looking for innovative ideas? Or are we so focused on just getting things done that we have become complacent as we and our teams are slowly warming up to the boiling point? Keeping the balance for our teams between steady-as-we-go operations, ever vigilant observation and the “JUMP!” mode is tricky! What do you think? How do you set the pace and vision for your teams?
As always… let’s keep the conversation going!
Monday, July 13, 2009
Friday, May 29, 2009
Self –Awareness at the Crossroads of Leadership
Ever wonder why some people, some leaders seem to be the “chosen ones” - the ones tapped for choice assignments and for promotions. What is it about those folks that sets them apart from others who have equal skills and experience? What makes them the stars? Is it a perfect storm metaphor of the right fit, right place and the right time for opportunities? Maybe. But I think it is more than that and is more about them having a personal vision, a path they are on that keeps them focused on a goal – on keeping the end in mind and most important on knowing themselves well.
Project Runway, the TV reality show, positions equally talented contestants against each other to win the prize of a designer contract. What separates the winners from all the rest? They can all design fashions. But the finalists seem to have had a plan that supported their desire and passion to further their career and they seem to have a confidence in themselves, knowing their strengths and what they may not be good at. The Roman philosopher Seneca said that “If a man knows not what harbor he seeks, any wind is the right wind.” Or as Lewis Carroll said: “If you don't know where you are going, any road will take you there.”
What is your leadership path? Have you thought about the type of leader you want to be and worked towards that picture? Or have you just let whatever happens – happen? Of course there are those success stories where someone just gets lucky. I have known many good leaders who may have surprised some with their success as they did not necessarily fit the leadership mold at the time. I understand now that they were very self -aware. They knew their strengths and where they fell short, held tight to their values, ethics and beliefs, and defined their path to reach their leadership destination. There may be ruts in the road but at least you are on the right road.
Having a strong self awareness is possibly the most valuable of leadership competencies. Self awareness is being conscious of your strengths and of those areas you need to work on or have yet to learn and admitting both publicly. The picture of the strong John Wayne type leader would never admit to mistakes or weaknesses yet it doesn’t matter because the people around them see them anyway. Admitting to both your strengths and areas of improvement builds trust in those around you through your transparency.
So can you build self awareness? My answer is yes. How do you build self awareness? The answer is by seeing yourself as others see you and being open to their feedback. Life experience helps build self awareness as well if you are again open to the learning and the feedback.
Self awareness is the cornerstone emotional intelligence competencies. I believe it is the basis for being real – authentic, credible and transparent – the behaviors of outstanding leaders. Your thoughts? As always, Let’s Keep the Conversation Going…
Project Runway, the TV reality show, positions equally talented contestants against each other to win the prize of a designer contract. What separates the winners from all the rest? They can all design fashions. But the finalists seem to have had a plan that supported their desire and passion to further their career and they seem to have a confidence in themselves, knowing their strengths and what they may not be good at. The Roman philosopher Seneca said that “If a man knows not what harbor he seeks, any wind is the right wind.” Or as Lewis Carroll said: “If you don't know where you are going, any road will take you there.”
What is your leadership path? Have you thought about the type of leader you want to be and worked towards that picture? Or have you just let whatever happens – happen? Of course there are those success stories where someone just gets lucky. I have known many good leaders who may have surprised some with their success as they did not necessarily fit the leadership mold at the time. I understand now that they were very self -aware. They knew their strengths and where they fell short, held tight to their values, ethics and beliefs, and defined their path to reach their leadership destination. There may be ruts in the road but at least you are on the right road.
Having a strong self awareness is possibly the most valuable of leadership competencies. Self awareness is being conscious of your strengths and of those areas you need to work on or have yet to learn and admitting both publicly. The picture of the strong John Wayne type leader would never admit to mistakes or weaknesses yet it doesn’t matter because the people around them see them anyway. Admitting to both your strengths and areas of improvement builds trust in those around you through your transparency.
So can you build self awareness? My answer is yes. How do you build self awareness? The answer is by seeing yourself as others see you and being open to their feedback. Life experience helps build self awareness as well if you are again open to the learning and the feedback.
Self awareness is the cornerstone emotional intelligence competencies. I believe it is the basis for being real – authentic, credible and transparent – the behaviors of outstanding leaders. Your thoughts? As always, Let’s Keep the Conversation Going…
Thursday, May 7, 2009
The Leadership Game
If you play golf you understand that the right club is needed for a specific situation – a driver for off the tee, a wedge for getting out of the trap or onto the green and a putter for sinking the ball. Each stroke requires some consideration about what is happening and what needs to be achieved. I see leadership the same way. Each situation, each contact, each decision is a sort of a quandary that requires consideration about what is the best approach, the best leadership style to use to be most effective. I know some people feel that there are only certain effective leadership styles – the participative style, the collaborative style, etc., and that styles like the directive style are too negative and unnecessary. The quagmire – can you engage and empower people as a leader and still be able to be directive and make tough decisions and not be seen as authoritative or autocratic? I think that if the ship is sinking – the leader must take control and does not have time to solicit for opinions. As our major corporations struggle or are failing – should those leaders be gathering input from everyone or taking authoritative steps to turn things around?
Guest blogger, Dr. Stu Tubbs, respected Eastern Michigan University faculty and popular leadership consultant shares his thoughts on situational leadership.
I look forward to your comments and thoughts. And as always… let’s keep the conversation going!
Sandi
The Right Leadership Approach for the Right Situation
Dr. Stu Tubbs PhD.
The leadership quagmire…mmm. I am not sure I care for the term as it sounds negative. Although it is true that leadership is a demanding and sometimes frustrating role, it can also be one of the most interesting, challenging and rewarding roles of your life.
In a recent class, I had six Saudi Arabian MBA students, all architects, all in their early thirties, all men, all Muslim. What I learned from this experience is that you can't stereotype people. Leaders must treat each person as individuals in order to effectively lead. These six men were as different from one another as any six male American students that I have ever taught. This experience is a metaphor for what I teach in a Situational Leadership program.
One of the confusing things about leadership is that we are constantly told that we must be consistent. Yes, that is true. We must have consistent policies and procedures, in other words a structure that is consistent. But, at the same time, we must work within the structure with each individual in ways that are unique to each person. A really good training ground for all of us is parenting. Each of our children is different. Over time, we learn in a natural way, how to best approach each situation with each of our children. Leadership on the job has some distinct similarities. It's not rocket science!
What we learn in the Situational Leadership program is a framework that gives us a structure for how to figure out in a simple, yet powerful way, what each person needs from us in the way of leadership. Think of it as a medical model. It requires that we first accurately diagnose the needs of the person we are trying to lead. If the diagnosis is skipped, or if it is wrong, or if we just apply the solution that worked best last time, all else is doomed to failure. I think it is important that we understand that different leadership approaches, types or styles are all valuable in the right situation. In my program a simulation is used to teach participants how to improve their diagnostic skills through practice and to correctly diagnose leadership situations to decide what needs to be done and what leadership style is appropriate. It is also a fun and energizing way to learn something that is imperative for effective leadership and to help avoid the “quagmire”.
If you play golf you understand that the right club is needed for a specific situation – a driver for off the tee, a wedge for getting out of the trap or onto the green and a putter for sinking the ball. Each stroke requires some consideration about what is happening and what needs to be achieved. I see leadership the same way. Each situation, each contact, each decision is a sort of a quandary that requires consideration about what is the best approach, the best leadership style to use to be most effective. I know some people feel that there are only certain effective leadership styles – the participative style, the collaborative style, etc., and that styles like the directive style are too negative and unnecessary. The quagmire – can you engage and empower people as a leader and still be able to be directive and make tough decisions and not be seen as authoritative or autocratic? I think that if the ship is sinking – the leader must take control and does not have time to solicit for opinions. As our major corporations struggle or are failing – should those leaders be gathering input from everyone or taking authoritative steps to turn things around?
Guest blogger, Dr. Stu Tubbs, respected Eastern Michigan University faculty and popular leadership consultant shares his thoughts on situational leadership.
I look forward to your comments and thoughts. And as always… let’s keep the conversation going!
Sandi
The Right Leadership Approach for the Right Situation
Dr. Stu Tubbs PhD.
The leadership quagmire…mmm. I am not sure I care for the term as it sounds negative. Although it is true that leadership is a demanding and sometimes frustrating role, it can also be one of the most interesting, challenging and rewarding roles of your life.
In a recent class, I had six Saudi Arabian MBA students, all architects, all in their early thirties, all men, all Muslim. What I learned from this experience is that you can't stereotype people. Leaders must treat each person as individuals in order to effectively lead. These six men were as different from one another as any six male American students that I have ever taught. This experience is a metaphor for what I teach in a Situational Leadership program.
One of the confusing things about leadership is that we are constantly told that we must be consistent. Yes, that is true. We must have consistent policies and procedures, in other words a structure that is consistent. But, at the same time, we must work within the structure with each individual in ways that are unique to each person. A really good training ground for all of us is parenting. Each of our children is different. Over time, we learn in a natural way, how to best approach each situation with each of our children. Leadership on the job has some distinct similarities. It's not rocket science!
What we learn in the Situational Leadership program is a framework that gives us a structure for how to figure out in a simple, yet powerful way, what each person needs from us in the way of leadership. Think of it as a medical model. It requires that we first accurately diagnose the needs of the person we are trying to lead. If the diagnosis is skipped, or if it is wrong, or if we just apply the solution that worked best last time, all else is doomed to failure. I think it is important that we understand that different leadership approaches, types or styles are all valuable in the right situation. In my program a simulation is used to teach participants how to improve their diagnostic skills through practice and to correctly diagnose leadership situations to decide what needs to be done and what leadership style is appropriate. It is also a fun and energizing way to learn something that is imperative for effective leadership and to help avoid the “quagmire”.
Tuesday, April 28, 2009
It has been said that a key attribute of an excellent leader is to develop, motivate and stimulate apparently ordinary people to unusual efforts. Leaders are often charged with finding the high potentials – the winners in the organization. But while being able to identify the winners is important is it the most important challenge and issue or is the real challenge for leaders is in how to make winners out of the minions of “ordinary” staff/employees. Martha Peak, Group Editor for AMA Magazines is quoted in the Management Review in 10/1992 as saying: “My father had a simple test that helps me measure my own leadership quotient: When you are out of the office he once asked me, does you staff carry on remarkably well without you?"
Okay, so we all know we need to develop our people to make sure they are ready today and more importantly to face and lead us through the challenges and opportunities in the future. But when times are great, business is hopping, the economy is strong and employees are stretched and working hard, we find we do not have the time nor can we spare the human resources to training and development programs. And when times are slow, when the economy is tanking and sales and revenue and profits are down, we don’t have the dollars to spare on training employees. But shouldn’t that be when we take advantage of the time and invest in our most valuable resource so they can face our challenges more skilled and qualified? Do we want to find ourselves in the same dilemma with leaders and staff unable to tackle the current challenges or do we want leaders and staff to perform with emotional intelligence, innovative ideas and the ability to commit and motivate others?
Dr. Seuss in his wisdom said: “The more that you read, the more things you will know. The more that you learn, the more places you'll go." Could this mean going to the top of your business or industry’s competitive mountain with prepared leaders and employees?
Yes every business or organization needs to watch their spending carefully in tough times. But it is shortsighted if our short term strategy includes cutting all training and development of the resources that will be needed to move the organization ahead in the prosperous times. The strategy needs to include both doing things more efficiently and effectively in the organization and on developing the resources that will ensure we are competitive in the future. This is a leadership quagmire.
What do you think? As always, let’s keep the conversation going!
"There are no such things as limits to growth, because there are no limits to the human capacity for intelligence, imagination, and wonder." --Ronald Reagan
Okay, so we all know we need to develop our people to make sure they are ready today and more importantly to face and lead us through the challenges and opportunities in the future. But when times are great, business is hopping, the economy is strong and employees are stretched and working hard, we find we do not have the time nor can we spare the human resources to training and development programs. And when times are slow, when the economy is tanking and sales and revenue and profits are down, we don’t have the dollars to spare on training employees. But shouldn’t that be when we take advantage of the time and invest in our most valuable resource so they can face our challenges more skilled and qualified? Do we want to find ourselves in the same dilemma with leaders and staff unable to tackle the current challenges or do we want leaders and staff to perform with emotional intelligence, innovative ideas and the ability to commit and motivate others?
Dr. Seuss in his wisdom said: “The more that you read, the more things you will know. The more that you learn, the more places you'll go." Could this mean going to the top of your business or industry’s competitive mountain with prepared leaders and employees?
Yes every business or organization needs to watch their spending carefully in tough times. But it is shortsighted if our short term strategy includes cutting all training and development of the resources that will be needed to move the organization ahead in the prosperous times. The strategy needs to include both doing things more efficiently and effectively in the organization and on developing the resources that will ensure we are competitive in the future. This is a leadership quagmire.
What do you think? As always, let’s keep the conversation going!
"There are no such things as limits to growth, because there are no limits to the human capacity for intelligence, imagination, and wonder." --Ronald Reagan
Friday, March 27, 2009
A Medal from the Wizard?
In battle, under fire, under siege and when the ship is sinking - all clear pictures of when leaders formal or informal find and use courage to motivate themselves and others to action. What about in business and organizations today. Is courage a critical competency of leadership? Courage to make an unpopular decision? Courage to make a risky decision? What about courage to make a decision you know is on a fine line between the positive short term outcomes and the potential negative impacts to the company long term? Or maybe that's not courage but one losing sight of their values and the values of the company e.g., the decisions bordering on greed made by some of the financial institutions the past few years.
I believe courage is a critical competency that all effective leaders need to have that aligns with their moral compass. The question for today is: Is courage hard-wired or earned like the Cowardly Lion whose courage meter went up after being awarded a symbolic medal by the great Wizard of Oz? Are male leaders hard-wired with courage to make the courageous decisions versus female leaders who may appear to have a void in the courage area?
Anne Doyle, journalist and auto industry communications executive in the Michigan Journalism Hall of Fame and president of Anne Doyle Strategies, a leadership and communications consulting practice says in her recent blog: "Our lives and ambitions today far exceed the female brain wiring that hasn’t changed much in millions of years, not to mention the possibilities for generations of foremothers". Anne's blog “Expect To Be Tested” provides great reading and is rich for discussion. Take a look and then as always ...let's keep the conversation going.
http://www.annedoylestrategies.com/OnAnnesMind/Entry.aspx
I believe courage is a critical competency that all effective leaders need to have that aligns with their moral compass. The question for today is: Is courage hard-wired or earned like the Cowardly Lion whose courage meter went up after being awarded a symbolic medal by the great Wizard of Oz? Are male leaders hard-wired with courage to make the courageous decisions versus female leaders who may appear to have a void in the courage area?
Anne Doyle, journalist and auto industry communications executive in the Michigan Journalism Hall of Fame and president of Anne Doyle Strategies, a leadership and communications consulting practice says in her recent blog: "Our lives and ambitions today far exceed the female brain wiring that hasn’t changed much in millions of years, not to mention the possibilities for generations of foremothers". Anne's blog “Expect To Be Tested” provides great reading and is rich for discussion. Take a look and then as always ...let's keep the conversation going.
http://www.annedoylestrategies.com/OnAnnesMind/Entry.aspx
Friday, March 20, 2009
The Leadership Quagmire
To lead is defined by words like showing the way, guiding, being the example. In cards it is the person who makes the first play and sets the strategy as least in the beginning for the rest of the game. Leadership also is synonmous with getting results at least in today's corporations, businesses and organizations. The conundrum leaders find them selves in is the choices they need to make to balance the needs of various stakeholders such as stockholders, their customers and employees and of course their own personal needs.
So here we are today with an historical financial crisis on our hands, with giant formerly successful corporations crumbling and begging for help from outside their walls. Everyone is asking "how did this happen?" and though there are a plethora of circumstances that may have contributed to the catastrophe... isn't it primarily the result of leadership decisions and choices? The leaders at the top of the large banking and brokerage and insurance institutions made choices to maximze profits for their stockholders - a key obective of most companies. As stockholder myself through my investments and retirement savings I was happy to see my ROI climbing with visions of retirement fun dancing in my head. Didn't we all get caught up in the sexiness of owning more things as our lines of credit increased? Weren't we all on-board the train to Shangri-la?
So now the consequences of those choices at the top executive level of the crumbling corporations or at my level watching my retirement savings dwindle and credit card debt hovering are hitting us smack in our "main-street' lives. And we are angry and rightfully so to some degree of the lines we were fed, our gullibility in buying them and in the trust that has been taken advantage of by greedy executives in those giant corporations. We want retribution of at least some satisfaction that someone at the top is paying for their greed and with Bernie Madhoff off to prison as an example we now want to see the leaders at AIG and others being held accountable for their poor, greedy decisions. As "main street" struggles to get by each day we are horrified that those executives would receive a penny of compensation for actions that we are now paying for with our hard earned tax dollars.
I struggle though with my own contradictions - I liked it when I was making money and now that I am not, who is to blame? So here we are ..AIG executives got greedy and in the meantime helped many of us build our retirement nest eggs. They want their contracted bonuses for all those decisions they made that made lots of them and us money. Only today none of us are still making money because of those decisions. I'm angry but just not sure at who. Leadership is supposed to reflect ethics, integrity, compassion, empathy, calculated risk taking, responsibility, confidence and emotional self management and those competencies and values should be constant in all decisions. Appears these executives let go of these and we were either blindly unaware or didn't care.
This commentary/article from the Harvard Business Publishing by John Baldoni is interesting and a good one for this blog. I'd love to hear your perspectives.
Best Regards,
Sandi
http://blogs.harvardbusiness.org/baldoni/2009/03/how_aigs_edward_liddy_lived_to_figh.html?cm_mmc=npv-_-LISTSERV-_-MAR_2009-_-LEADERSHIP1
Voices » John Baldoni » How AIG's Edward Liddy Lived to Fight Another Day
How AIG's Edward Liddy Lived to Fight Another Day
11:25 AM Thursday March 19, 2009
Well, it wasn't the OK Corral — but there were plenty of shots being taken as Edward Liddy, CEO of AIG (aka the most despised business in America) strode into the chamber room to face a Congressional inquiry panel. Picketers were holding signs, Congressmen were snarling for the cameras, and public opinion was decidedly against the speaker. But as John Ydstie of NPR described it, Liddy "almost immediately began to defuse" the hostilities with his straight talk.
I would be the last one to make any apologies for AIG, which at best was mismanaged and at worst criminally so. Anyone involved in such a management fiasco should not receive bonus compensation for driving the enterprise into virtual insolvency. But Liddy is not the chief culprit; he is the CEO brought in by former Treasury Secretary Hank Paulson to rescue the company. It bears noting that Liddy receives one dollar a year in compensation. After his testimony to Congress, however, his colleagues might want to buy him dinner.
Liddy's presentation is a textbook example of how to deliver an unpopular message in front of a decidedly unfriendly crowd, something that leaders need to know how to do whether they are speaking to stakeholders or to the public at large. Here's how Liddy did it:
Share the outrage. In his prepared remarks, Liddy said, "We are meeting at a high point of public anger. Americans want to know how the country got into the financial mess we are in... I share that anger." Demonstrate understanding of how people feel and align your remarks to that point of view.
Slay the dragon. "I have asked the employees of AIG Financial products to step up and do the right thing," he said, having asked those receiving more than $100,000 to return at least half of those payments. Liddy noted that some had already given back their entire bonus, which of course, is what Congress and the American people want. By addressing the issue candidly, Liddy was able to get people to listen, even if they do not agree with him.
Accept responsibility. Liddy's remarks described AIG as making "mistakes... on a scale that few could have ever imagined possible... [T]he company strayed from its core competences in the insurance business... [and] became an internal hedge fund, which then became substantially overexposed to market risk." Did you or your company make terrible mistakes? Call yourself out for it.
Address the solution. Liddy focused the remainder of his presentation, and elaborated in public testimony, on how AIG is working with the Federal Reserve and is now owned by the American people. When delivering a tough message, a leader must focus attention on what to do next.
Stand up for your people. Liddy made it clear that those responsible for getting AIG into its mess were "gone." Bonuses were not for performance. They were for retention of employees who were "winding down" AIG's $1.6 trillion damaged assets portfolio and were in effect managing themselves out of a job. Liddy's sentiments are in direct opposition to what Congress wants to hear, but as CEO he must champion those employees he feels are doing the right thing.
Remain calm. Edward Liddy was as forthright in his tone as he was with his analysis. He did not become ruffled at tough questions; his demeanor likely took the edge off the proceedings. It is very important for leaders to exert calmness; if a leader comes unglued it gives opponents ammunition to attack and supporters no reason to follow. Liddy kept his cool.
The greedy behavior at AIG ought to serve as a Times Square video billboard for how (with apologies to Lord Acton) greed corrupts and absolute greed corrupts absolutely. But I would not put a picture of Liddy on that billboard. He demonstrated what it takes to be accountable in public and in the process demonstrate that some financial executives still remember how to be straight with the American people.
So here we are today with an historical financial crisis on our hands, with giant formerly successful corporations crumbling and begging for help from outside their walls. Everyone is asking "how did this happen?" and though there are a plethora of circumstances that may have contributed to the catastrophe... isn't it primarily the result of leadership decisions and choices? The leaders at the top of the large banking and brokerage and insurance institutions made choices to maximze profits for their stockholders - a key obective of most companies. As stockholder myself through my investments and retirement savings I was happy to see my ROI climbing with visions of retirement fun dancing in my head. Didn't we all get caught up in the sexiness of owning more things as our lines of credit increased? Weren't we all on-board the train to Shangri-la?
So now the consequences of those choices at the top executive level of the crumbling corporations or at my level watching my retirement savings dwindle and credit card debt hovering are hitting us smack in our "main-street' lives. And we are angry and rightfully so to some degree of the lines we were fed, our gullibility in buying them and in the trust that has been taken advantage of by greedy executives in those giant corporations. We want retribution of at least some satisfaction that someone at the top is paying for their greed and with Bernie Madhoff off to prison as an example we now want to see the leaders at AIG and others being held accountable for their poor, greedy decisions. As "main street" struggles to get by each day we are horrified that those executives would receive a penny of compensation for actions that we are now paying for with our hard earned tax dollars.
I struggle though with my own contradictions - I liked it when I was making money and now that I am not, who is to blame? So here we are ..AIG executives got greedy and in the meantime helped many of us build our retirement nest eggs. They want their contracted bonuses for all those decisions they made that made lots of them and us money. Only today none of us are still making money because of those decisions. I'm angry but just not sure at who. Leadership is supposed to reflect ethics, integrity, compassion, empathy, calculated risk taking, responsibility, confidence and emotional self management and those competencies and values should be constant in all decisions. Appears these executives let go of these and we were either blindly unaware or didn't care.
This commentary/article from the Harvard Business Publishing by John Baldoni is interesting and a good one for this blog. I'd love to hear your perspectives.
Best Regards,
Sandi
http://blogs.harvardbusiness.org/baldoni/2009/03/how_aigs_edward_liddy_lived_to_figh.html?cm_mmc=npv-_-LISTSERV-_-MAR_2009-_-LEADERSHIP1
Voices » John Baldoni » How AIG's Edward Liddy Lived to Fight Another Day
How AIG's Edward Liddy Lived to Fight Another Day
11:25 AM Thursday March 19, 2009
Well, it wasn't the OK Corral — but there were plenty of shots being taken as Edward Liddy, CEO of AIG (aka the most despised business in America) strode into the chamber room to face a Congressional inquiry panel. Picketers were holding signs, Congressmen were snarling for the cameras, and public opinion was decidedly against the speaker. But as John Ydstie of NPR described it, Liddy "almost immediately began to defuse" the hostilities with his straight talk.
I would be the last one to make any apologies for AIG, which at best was mismanaged and at worst criminally so. Anyone involved in such a management fiasco should not receive bonus compensation for driving the enterprise into virtual insolvency. But Liddy is not the chief culprit; he is the CEO brought in by former Treasury Secretary Hank Paulson to rescue the company. It bears noting that Liddy receives one dollar a year in compensation. After his testimony to Congress, however, his colleagues might want to buy him dinner.
Liddy's presentation is a textbook example of how to deliver an unpopular message in front of a decidedly unfriendly crowd, something that leaders need to know how to do whether they are speaking to stakeholders or to the public at large. Here's how Liddy did it:
Share the outrage. In his prepared remarks, Liddy said, "We are meeting at a high point of public anger. Americans want to know how the country got into the financial mess we are in... I share that anger." Demonstrate understanding of how people feel and align your remarks to that point of view.
Slay the dragon. "I have asked the employees of AIG Financial products to step up and do the right thing," he said, having asked those receiving more than $100,000 to return at least half of those payments. Liddy noted that some had already given back their entire bonus, which of course, is what Congress and the American people want. By addressing the issue candidly, Liddy was able to get people to listen, even if they do not agree with him.
Accept responsibility. Liddy's remarks described AIG as making "mistakes... on a scale that few could have ever imagined possible... [T]he company strayed from its core competences in the insurance business... [and] became an internal hedge fund, which then became substantially overexposed to market risk." Did you or your company make terrible mistakes? Call yourself out for it.
Address the solution. Liddy focused the remainder of his presentation, and elaborated in public testimony, on how AIG is working with the Federal Reserve and is now owned by the American people. When delivering a tough message, a leader must focus attention on what to do next.
Stand up for your people. Liddy made it clear that those responsible for getting AIG into its mess were "gone." Bonuses were not for performance. They were for retention of employees who were "winding down" AIG's $1.6 trillion damaged assets portfolio and were in effect managing themselves out of a job. Liddy's sentiments are in direct opposition to what Congress wants to hear, but as CEO he must champion those employees he feels are doing the right thing.
Remain calm. Edward Liddy was as forthright in his tone as he was with his analysis. He did not become ruffled at tough questions; his demeanor likely took the edge off the proceedings. It is very important for leaders to exert calmness; if a leader comes unglued it gives opponents ammunition to attack and supporters no reason to follow. Liddy kept his cool.
The greedy behavior at AIG ought to serve as a Times Square video billboard for how (with apologies to Lord Acton) greed corrupts and absolute greed corrupts absolutely. But I would not put a picture of Liddy on that billboard. He demonstrated what it takes to be accountable in public and in the process demonstrate that some financial executives still remember how to be straight with the American people.
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