“Executives are hired on experience and fired on personality.” This well known phrase in the executive search business sums up years of collective experience and the prevailing findings from executive derailment research. The good news is that there are ways to predict and avoid hiring a poor fit as well as being alert to and addressing early warning signs of problems.

Estimates of the financial cost of a single failed manager range from $1,000,000 to 2,700,000. This figure does not include golden parachutes; losses related to intellectual capital, the good will of the firm’s reputation, unmet business opportunities and goals; damage to employee productivity and effectiveness; or the cost to the external environment, as seen in recent failures of financial institutions and auto makers. The average rate of senior manager and executive failure from nine independent research studies is 47% with the majority of these failures taking place following the transition to a new role. The most prevalent cause is not lack of technical skills or business acumen but personality factors. The shadow side of the executive’s personality, not typically detected during the interview process, shows up later as the inability to build a team, the trail of injured direct reports who become less effective and productive, failure to address performance problems, poor judgment and bad decisions.

What is Personality and Why Does it Matter?

Personality is the enduring pattern of thoughts, feelings, attitudes and behaviors that determine how an individual perceives and interacts with people and the environment as illustrated in the following vignette. On Christmas Eve the father of two young boys puts into the first son’s stocking a fine gold watch, and into the second son’s stocking he puts a pile of horse manure. The next morning, the first boy comes to his father and says glumly, “Dad, I just don’t know what I’ll do with this watch. It’s so fragile. It could break.” The second boy runs to his father exclaiming, “Daddy! Daddy! Santa left me a pony. Now all I have to do is find it!” Imagine each of the brothers as CEO of your company. It is easy to predict how differently each would perceive the world around him, create a different working environment and focus on different outcomes.

Finding solutions to business problems can be exciting and creative or stressful and limiting. The tone and the nature of the process and ultimate solutions are to a large extent determined by the leader’s perspective. If the pile of manure indicates there is a horse nearby, then the team is deployed on an exciting adventure to find the horse. If, however, that same pile means someone is “messing” with us, then the team is deployed with a sense of paranoia on a mission to find and destroy the bad guys.

The Link Between Personality and Fit

Determining whether a potential leader is a good fit depends on many factors, including the culture, values and life stage of the hiring company company. The management literature identifies behaviors typical of executives who succeed versus those who fail. The psychological literature explains the personality factors associated with these behaviors and personality assessments measure the relative presence or absence of these factors for a given individual. Information from personality and other types of assessments, such as those identifying the candidate’s values, are compared with a company’s culture, values and life stage to determine who among the candidates will be a good fit and who will not.

Personality Factors and Executive Failure

Failed leaders tend to be overly abrasive, ambitious, aggressive, and/or untrusting. They often hire the wrong people and surround themselves with “yes men.” The biggest derailer is lack of awareness. With awareness a person can address their issues, without it they become the leading character in their own version of The Emperor’s New Clothes. Such people have inflated self-evaluations. What others may not see is that this sense of self is fragile and easily threatened. What others do observe is that these people tend to lose their composure. Behind the scenes is a threat to their fragile sense of self. They are defensive about mistakes and rarely learn from cases of faulty thinking and related actions.4 (). They often seek and need approval and adoration. On the flip-side, they have difficulty with dissenting views. They are well-defended but susceptible to severe hurt when something negative does get through. When this happens they tend to become suspicious of others. Fear of losing control and being hurt can quickly result in abrasive or threatening behaviors, micromanagement, and cutting people off. People of this personality type tend to surround themselves with those who agree. They don’t hear challenges, so faulty thinking and decisions go unchecked.

Smart companies can use the research on personality traits predictive of executive success and failure to avoid costly hiring mistakes. Well validated psychological assessments such as the 16 PF and the Hogan assess positive and negative personality factors, as well as the underlying self-awareness that allows executive to address the down sides of their leadership, or in its absence prevents them from doing so. Both instruments have been widely used to assess executive candidates and the development needs of those already in such roles. An over view of each appears below.

Personality Assessments: Hogan and 16PF

Both the Hogan Personality Inventory and the 16PF are well-researched and have been widely used for at least 30 years. The Hogan was designed for the business environment and is backed by research with more than 4000 subjects. Reports indicate the individual’s level of risk for 10 factors associated with leadership derailment. A description of the behavioral and leadership implications for each factor, based on the person’s score, is also included in the report. An example follows:

Factor name/description: Excitable – Overly enthusiastic and easily disappointed

Risk Level: High

Behavioral Implications: Intense energetic, volatile and sometimes explosive; may quit when frustrated; Yells when angry; Overreacts to criticism; Understands when others are stressed

Leadership/Organizational Implications: Intensity energy have positive impact, but tendency toward emotional display can erode credibility, your ability to coach and be effective as part of a team. Your moodiness makes you unpredictable and hard to read. Others notice that you become discouraged and may give up when things don’t work out

Several other factors of the Hogan are:

• Cautious – Overly worried about being criticized
• Reserved – Lacking interest in or awareness of others
• Diligent – Conscientious, perfectionist, and hard to please

The Hogan Leadership Values Profile is used to assess the fit between the candidate and the hiring company’s culture. It identifies an individual’s core values, goals and activities that are most meaningful. Factors such as recognition, power, security, and affiliation are included. The values, goals and activities identified in this assessment are what drives the person and he/she will be happiest and most successful in roles that encourage their expression. The report includes leadership and organizational implications, along with environmental fit for each of the factors as exemplified below.

Factor name & description – Power. Desire for challenge, to make things happen, make a difference, beat the competition, and succeed

Score – High

Leadership implications – You evaluate yourself in terms of accomplishments and work hard to achieve goals. You may be impatient with others who lack your drive and focus. Ensure you focus more on external versus internal competition to benefit the whole organization.

Organizational Implications – You enjoy being in authority and control and give people tough assignments. You promote an environment where people are expected to take on challenging assignments, be industrious, show results, beat the competition, and drive things to completion.

Environmental Fit – You are most satisfied when performance, productivity and achievement allow you to make a difference. If you cannot leave your mark you will not enjoy working for the organization. You also want to be able to pursue objectives in a persistent and strategic manner.

The 16 PF is the most widely used assessment of normal personality and has been in existence for over 40 years. It examines 16 facets of personality ranging from warmth, reasoning, and emotional stability to openness to change, tension and perfectionism. These various factors are combined to form the overarching categories of tough-mindedness, extraversion, independence, anxiety, and self-control. Ratings of self-esteem and social skills are also included. The 16 PF indicates the person’s potential for leadership based on how his/her scores compare to scores of the general population of managers.

The 16PF also offers a Human Resource Development Report. It examines 5 domains including leadership, interacting with others, making decisions, initiative, and personal adjustment. Each domain is further subdivided such that the person is rated on various aspects of each domain. For example leadership styles include assertive, facilitative, and permissive; personal adjustment includes anxiety, emotional adjustment, emotional stability, vigilance, apprehension and tension. A sample section from the 16PF Basic Report follows:

Susan is usually socially bold and venturesome and probably prefers to be the focus of attention.

She

• usually is accepting of other people
• tends to trust the behaviors and motives of subordinates.
• tends to be serious and cautious in her dealings with others
• is likely to challenge the status quo and seek novel solutions to problems
• is group-oriented and affiliative
• probably prefers working as a member of a team rather than by herself.

Based on Susan’s personality information, her overall leadership potential is predicted to be average.

Should she be called on to play a leadership role her level of success will likely be the same as that of most people. Her potential for creative functioning is predicted to be high. She probably has the sense of adventure, assertiveness, and orientation toward ideas that are necessary for pursuing creative interests. She shows characteristics somewhat similar to people who invest a lot of time producing novel or original works. Her rate of output in creative endeavors is predicted to be high.

Summary

The high cost of new hire executive failures can be mitigated through the use of psychological assessments to support the current subjective measures involved in such critical hiring decisions.  Given the body of research on key personality factors associated with failure, the availability of valid assessments that test for these factors and the psychological expertise required to use and interpret these instruments, the only thing holding companies back is a decision to adopt this high ROI approach. 

Germane Consulting provides assessment services to corporations and executive search firms.  Please contact us for more information.

References

Smart, B. D. (1999). Topgrading. Upper Saddle River, NJ: Prentice-Hall

Hogan, J., Hogan, R. & Kaiser, R.B., Management Derailment: Personality Assessment and Mitigation. Chapter to appear in

Zedock, S.(ed), Handbook of Industrial and Organizational Psychology. Washington D.C., American Psychological Association

Gentry, W. A., & Chappelow, C. (2009). Managerial derailment: Weaknesses that can be fixed. In R. B.Kaiser (Ed.) The perils of accentuating the positive (pp. 97-114). Tulsa, OK: Hogan Press

Kovach, B. E. (1989). Successful derailment: What fast-trackers can learn while they’re off the track. Organizational Dynamics, 18(2), 33-47

Watkins, M. (2003). The first 90 days. Cambridge, MA: Harvard Business School Press

Eichinger, R. W., & Lombardo, M. M. (2003).Knowledge summary series: 360-degree assessment. Human Resources Planning, 26, 4-44.

Lombardo, M. M., & Eichinger, R. W. (2006). The leadership machine (3rd Ed.). Minneapolis: Lominger Limited, Inc.

McCall, M. W. Jr., & Lombardo, M. M. (1983). Off the track: Why and how successful executives get derailed. Technical Report No. 21. Greensboro, NC:, Center for Creative Leadership

Shipper, F., & Dillard, J. (2000). A study of impending derailment and recovery of middle managers across career stages. Human Resource Management, 39, 331-347

©2010 Germane Insights. All Rights Reserved.

Lack of clarity about the differences between executive/organizational consulting, executive coaching, and executive psychotherapy is confusing for executives and can lead them to request and receive the wrong services only to discover that their expectations are not being met, there is no improvement, or worse, conditions deteriorate. Furthermore, when coaches attempt to deal with problems that require the expertise of mental health professionals serious consequences and ethical issues can arise. In the end, the lack of clear differentiation between consulting, coaching and psychotherapy is a disservice to practitioners and their clients.

The problem is further exacerbated by the variety of disciplines that claim expertise in both fields. Each discipline may define the work differently and use different approaches. Some consultants and coaches come from backgrounds in psychology, psychiatry or social work. Others are MBAs or former executives. Anthropologists, educators, actors, and speech and language therapists are also engaged as coaches. Some experienced professionals, such as lawyers and doctors, become coaches and consultants to others in their same discipline. Many consultants and coaches have graduate degrees in organization behavior, industrial psychology or related areas. Others do not. Some are life coaches, some are professional coaches. Some coaches hold certificates from programs typically founded and taught by psychologists, consultants and human resource professionals who entered the field before the existence of such programs. In addition some consultants and coaches work across all three arenas of executive/organizational consulting, executive coaching and executive psychotherapy.

This article defines and differentiates executive/organizational consulting, executive coaching and executive psychotherapy according to the following domains:

1. Time frames that are the focus of attention
2. Accountability
3. Focal issues
4. Goals
5. Others who are aware and involved
6. Boundaries
7. Consultant’s role and expertise

The foci in each of these domains are listed in order of importance in Table 1 at the end of the article. There are of course exceptions to the general rules stated here. For example, most coaches engage the client’s manager in some aspects of the coaching agreement. I know of several companies, however, where this is not the case. A military contractor that has to keep extensive written records does not involve anyone other than the client in the coaching agreement in order to protect confidentiality. The consulting or coaching work may at times address issues other than those I identify or result in additional benefits, such as when coaching enables the executive to enjoy his leisure time more. These are typically a side benefit and are not addressed in this article. Finally, while much of what is written here may apply to those working from inside the organization, the intent is to address the external professional.

Because the lens through which we see the world influences both what we see and how we make sense of it, the reader should be aware of the lenses that influence my thinking. I have expertise and work in all three arenas, hold a Master’s degree in Organization Development and a Doctorate in Clinical Psychology. I began working as a coach before the establishment of formal certification programs and currently supervise students doing practicum assignments in such a program. I believe it is critical to identify and maintain clear boundaries between the three domains. For example, I do not work as an executive psychotherapist to a client with whom I am working as a coach or consultant, nor do I become an executive consultant or coach to someone with whom I am working as an executive psychotherapist. My clinical practice and my coaching/consulting practices are two different entities, informed by different principles and models. At times, however, I employ the same expertise in both – such as understanding and working with the process of individual change and transformation. In the model presented here executive coaching is viewed as a branch or type of organization development – a body of interventions aimed at improving the organization’s effectiveness. Many senior executive/organizational consultants integrated executive coaching into their system of interventions well before the coaching discipline gained popularity. Furthermore, while coaching focuses on the leader research indicates it improves organizational outcomes as well.

Executive/Organizational Consultation

Executive/organizational consulting is an approach to improving organizational effectiveness in which a trained professional who understands systems and organizational dynamics functions as a sounding board, problem solving partner and expert adviser in a collaborative relationship with the executive. The goal is to improve business outcomes by intervening with and affecting organizational culture, dynamics, structures, processes and people. The consultant and executive consider how well various parts of the system such as strategy, goals, people’s skills and reward systems are aligned. They may focus on getting the executive team to work better across organization boundaries to support company-wide goals. They examine interactions between the executive, his team, peers, key stakeholders, employees, customers, etc., to understand how and why they affect each other and the health of the organization. The consultant also explores with the executive what he/she is doing or not doing to create, maintain or change the way things work. Other members of the organization are typically involved at various points as needed. The executive’s beliefs, skills, behaviors, and knowledge may be addressed. The work focuses mainly on the current and the future. The past is considered to the degree that it sheds light on and influences either or both. Finally the executive and consultant are accountable to the executive’s manager.

Case Example: A new CEO hires a Vice-President of Sales to create a culture of customer intimacy and related sales approach. Instead of selling parts based on advances in technology they will be selling solutions based on an intimate understanding of the customers’ business and technical challenges. As the V.P. beings to implement these changes, he meets with strong resistance. He is surprised to discover that people do not trust him given his reputation and past success.

He hires an executive/organizational consultant who conducts an assessment that reveals organizational history is getting in the way. The previous VP and CEO are gone but maintain a felt-presence as former “tyrants” who publicly humiliated and punished people. Employees at all levels still live and work in fear and are reluctant to engage in change that requires learning and practicing new behaviors. One sales director explains that the new VP is introducing change to “people who had their hands chopped off, are still bleeding and require healing.” To address this problem the consultant suggests and coaches the executive to meet with each of his direct reports in order to ensure their safety and build trust. The consultant also designs and facilitates small and large group meetings for people to talk openly about the past and their hopes for the future. Large group events employ rituals and icons to represent the past and the future, bring closure to what was and create momentum to achieve the vision.

The VP, valued for his business acumen and strategic thinking, shifts his beliefs as a result of this consultation. He learns that people won’t care about what he thinks, or act on his ideas, until they sense he cares about them. After the consultation ends the executive engages the consultant as a coach to work on relationship building skills.

Executive Coaching

An approach to executive development facilitated by a close and confidential relationship with a trained professional who understands leadership development, the process of adult development and change, and organizational dynamics. Many coaching engagements are sponsored by the executive’s manager who is likely to be involved in the initial agreement in order to develop a shard set of expectations. A human resource professional may also be involved. The coach often facilitates a process of gathering 360 degree feedback, synthesizing and reviewing it with the executive. Together they identify areas to be addressed. The goal is to enhance the executive’s capability, skills, knowledge and effectiveness in a variety of areas such as communicating a compelling vision, fostering collaboration, building a team, delivering direct feedback etc. Typical outcomes include enhanced emotional intelligence, improved relationships, expanded insight and knowledge. Executive coaching is focused on the present and the future. The past is explored to the extent that it provides relevant information about and helps improve the executive’s current and future performance. As in executive/organizational consulting the executive and consultant are typically accountable to the executive’s manager for the outcomes of this work.

Case Example: A high performing manager is promoted to director with several mangers reporting to him. He and his manager believe the director’s past tendency to get involved with the detail of employees’ work may be a problem in the new role. They hire an executive coach to help him learn to lead and manage the bigger picture while enabling direct reports to manage the details.

A 360 assessment reveals that others do indeed consider the director a micro-manager. As a result direct reports tend not to share informal updates, leaving him “out of loop.” He doesn’t have a pulse on what really counts until bigger problems emerge. One 360 respondent comments, “He seems driven by fear, like there is some monster over his shoulder waiting for him to make a mistake.”
 
The coach uses this comment to help the client explore the issue. He immediately identifies and shares a story about the monster, an influential figure from the past. The coach inquires further, “What role does this internalized memory of the monster play in your life now?” The client reveals his fear that without the monster, he will become an unmotivated “couch potato.” They discuss the concept of getting stuck in patterns of thinking and behaving that were needed and successful in the past, but for which there is a high price in the present. Together they explore the fear of becoming a couch potato. How real a possibility is it? When was the last time it happened? What else serves as a motivator for his many successes? He shares his inspirational vision, his desire for achievement, and his ability to self-discipline. The client, assured that these strategies have and will continue to work, follows the coach’s advice and asks the monster to “step aside,” picturing this as it happens. They also identify behavior changes, such as ending email reminders to direct reports regarding due dates. In addition, he learns to coach them to develop their own problem solving skills, instead of providing them with answers.

Executive Psychotherapy

A process in which a trained social worker, psychologist or psychiatrist works with the executive using psychotherapeutic methods to achieve greater understanding and resolution of work-related and general life problems and/or symptoms. This collaboration differs from executive coaching and consulting in that it is not accountable to produce improved organizational outcomes. While that may happen, the relationship is geared toward enhancing the personal and professional life of the executive. Their work often involves the resolution of issues from the executive’s past that serve as obstacles to self actualization. They move fluidly between past, current and future, although typically focuses less on the future as compared to consulting and coaching. Neither the psychotherapist nor the executive is accountable to anyone outside their relationship. The psychotherapist maintains confidentiality about both the existence and nature of the therapeutic relationship and needs written permission from the executive to speak with anyone about their work. The executive chooses whether or not to inform others. Sessions typically take place in the therapist’s office and once their work is complete, the relationship comes to an end.

Case Example: In this example a coaching relationship results in a referral for executive psychotherapy. Several years after the coaching engagement in the previous example, the same director is viewed by the executive team as a high potential leader and a candidate for senior level roles. He is concerned that inadequate strategic thinking capability will lead to lack of success in such roles. He and his manager invest in another round of coaching to address this issue. Coaching focuses on systems thinking, open systems planning, strategy development, and intuitive thinking. In addition he learns how to enhance collaboration among people with diverging perspectives working together to solve complex problems. He demonstrates improvements through coaching in conjunction with a stretch assignment leading a high level strategic project for the SVP of Sales – who act as a mentor.

During several informal conversations with his coach the client shares vignettes about dinner meetings with customers during which he drinks too much and cannot drive home. At one point the coach plants a question about how the use of alcohol affects the client’s thinking the next day. There is little discussion. Several months later, the client expresses concern that he has a drinking problem. The coach appreciates the confidence and makes a referral to a psychologist who specializes in substance abuse.

The client subsequently joins Alcoholics Anonymous and talks openly about this with his manager, mentor, colleagues and direct reports – asking for their support. In addition, he discovers with some amazement that his thinking becomes much clearer. He sees emerging patterns that help him determine what steps to take now in order to influence the future, instead of reacting to it. He is indeed an excellent strategic thinker and goes on to propose, develop and become the first VP of the company’s Global Accounts organization.

When to Recommend Psychotherapy
(Not a Complete List)

1. You observe or the client reports symptoms associated with a psychological condition such as Attention Deficit Disorder, Anxiety, or Depression.
2. The client remains both defensive and stuck in the problematic pattern of feeling, thinking and behaving despite several attempts to address it.
3. You discover trauma or other problems from the past are a root beliefs, thoughts, feeling and behaviors in which the client is stuck.
4. You are find yourself more concerned about the client’s well-being than is typical of you.
In any or all of these situations it may be helpful to consult with a mental health professional as you consider making a recommendation to the client.

1.Kambarakaran, F.,Yang, J., Baker, M. & Fernandes, P. (2008). Executive Coaching: It Works. Consulting Psychology Journal: Practice and Research 60 (1), 78-90.
2.Anderson, M. (2001). Executive Briefing: Case Study on the Return on Investment of Executive Coaching. Metrix Global LLC.

©2010 Germane Insights. All Rights Reserved.

How might your leadership improve if you could:

• Understand others’ motives
• Accurately outline the moves of key players and stakeholders several steps ahead
• Gain influence for your cause by appealing to what people care about most

Rapid access to such information is a critical asset for leaders. Empathy enables an intimate intuitive understanding of others. It is also an innate human capability but is often ignored or undervalued particularly in western business settings that favor logical analysis. As a result we learn to suppress or ignore cues – both internal and external – that would otherwise serve as an invaluable source of wisdom. Fortunately empathy is like a muscle that expands and grows stronger with use. What follows is a guide to increasing your capacity for empathy so in a nanosecond you can know what matters most.

1. Expand your view of how people communicate

People usually focus on the words and content of what others say. But communicaton occurs on other levels and fields as well. Consider what the body communicates with subtle changes to overall posture, stance, position in the room, and physical distance; what is communicated by vocal tone, volume, rhythm, speed and pacing; or what you can tell from facial expression, eye movements, the set of the jaw and mouth. When do these changes occur and what do they signal? Does the person use more fact or feeling based language? Do they seem closed to or inviting of different perspectives?

2. Pay attention to these new fields and levels of communication

Choose several low risk settings, such as someone else’s staff meeting, and practice attending to these other cues. Let words and content fade into the background, and allow the cues described above to move into the foreground. This might seem difficult and awkward at first like trying to hear the harmony instead of the melody. You might be concerned about missing important information. Be patient. With practice you will “hear” and “see” both spoken and unspoken messages. In the meantime, people are usually happy to repeat themselves.

3. Notice what’s happening on the inside

There is a type of physics to the way emotions or sense of another person is transmitted. People produce energy that is not bounded by the limits of the physical body. This energy exists in the surrounding field. When you understand how to read the signals from the energy in this field you can capture important information. First you have to learn how your own body and mind provides you with these signals. Here are some clues. Pay attention to what’s going on in your body. You may get visceral cues. You are probably familiar with the expression “The hair on the back of my neck stood up,” indicating that something frightening, not right or just plain creepy is in the field.

When you are with others, notice emotions or thoughts especially those that arise quickly and seemingly out of nowhere. You may be puzzled, not understanding why you suddenly feel this way or have a certain thought. Do you feel the pressure of tears building up? Do you experience a sense of anxiety in the pit of your stomach? Are you confused? Do you feel a lightness in your belly, an on-coming smile or laugh? If you find yourself knowing or hearing in your head the end of someone’s story before they get to it, that is also a form of intuitive knowledge or empathy.

4. Write and Reflect

After your practice situation take at least 15 minutes to write what you noticed. Then step back mentally and pay attention to whatever comes up. Don’t focus, concentrate or try to think. Relax your mind as if gazing upon the far horizon, taking in whatever there is to be seen while looking for nothing in particular. Notice and record new thoughts, insights, images, short daydreams or feelings. If you can, find a partner for this exercise, somebody who is highly empathic and intuitive. Tell them what you noticed and share any insights, questions, and reactions. Avoid having them do this work for you. Use them as a facilitator of your own experience, a sounding board, someone who can reflect your thoughts back to you and help explore their meaning.

5. Review, Evaluate and Enjoy

Review your notes a week or two later. Did any of your new thoughts or insights prove true? Did they lead you in a new direction? What new discoveries emerged in the succeeding weeks? Do you see any patterns?

With continued practice you will notice more and discover new meanings and interpretations. Soon you will see repeating patterns that enable you to predict future moves on the human chess board. You will become more adept at intervening and moving people in the needed direction. As an added side benefit you will most certainly feel less stressed and enjoy yourself more.

If you are interested in learning more about improved business performance as a result of empathy go to my blog and read Empathy, Product Design and Increased Sales or Empathy Improves Team Performance. To read about the master of empathy see the book review of A Team of Rivals.

©2010 Germane Insights. All Rights Reserved.

This article defines transformational leadership and the three major activities in which transformational leaders engage. It also discusses the three key attributes and capabilities of such leaders including advanced ego development, intuitive thinking, and mutual engagement.

What is Transformational Leadership?

Transformational leadership is a much used and widely misunderstood term. James MacGregor Burns, a respected scholar and authority on leadership, used it in 1978 to describe leaders who “engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.” Together they shape a common purpose and use their respective power to achieve it. As they work towards this shared vision those involved discover and employ a more highly developed self. Many mis-use the term transformational leader to describe those who lead and achieve change although not necessarily on behalf of a higher moral purpose or in a way that lifts both leader and follower to a better self.

What do transformational leaders do?

Transformational leaders apprehend the future, see and articulate a compelling vision for what is possible, and ignite in others the enthusiasm and energy to make that vision a reality. Transformational leaders achieve the vision by employing a specific set of capabilities and attributes that call forward the best in others.

Before describing these capabilities, a word about the environment in which these leaders operate today. The world has become considerably more complex and globally focused since the 1970′s when Burns wrote about transformational leadership. The heroic leader who sees a problem or an opportunity and develops a solution on his own or with a few like-minded others is a story of the past. Today’s world calls for a post-heroic leader collaborating with multiple stakeholders whose collective views are critical to understand and solve complex problems that require new ways of thinking.

Attributes and Capabilities

Transformational leaders have widely varying personalities and styles but they share common attributes in the areas of ego development, intuitive thinking, and the capacity for mutual engagement with others.

Ego Development

The basis of transformational leadership and the foundation for actions is an advanced stage of ego development. These leaders have moved beyond the need to establish their own identity and are focused on a larger purpose. Their intentions and actions, therefor, are not motivated by the need for personal achievement, satisfaction, gratification or the admiration of others. This creates great trust because others see the leader as serving the larger good. In addition, because the leader’s ego does not have to be satisfied she has the flexibility to see and do what is called for. She is able to avoid doing things that serve her ego and get in the way. Bill Clinton comes to mind. He was a potentially powerful leader whose ego needs led to his downfall and distracted him and others from achieving important national and international goals.

Intuitive Thinking

To apprehend the future transformational leaders consider a broad and far reaching horizon. In doing so they see threads of information that do not yet present an obvious and meaningful whole. They employ intuitive thinking to fill in the gaps and weave these threads into a cohesive picture of what is unfolding. Dialogue with others to explore what they see and how they make meaning of it is also part of the process. This picture of the future creates the context for the vision.

Mutual Engagement

Transformational leaders advocate for a vision and engage others to help shape it. The leader is like a master sculptor who provides the clay or substance to be shaped. He also presents a basic form and describes the essence of the creation, but others are involved in determining the finished product.

This type of engagement requires collaboration with and among stakeholders, including followers. But how does the leader create such collaboration? It rests on mutuality, a way of relating that takes into account two entities – self and other(s). It then creates a third shared entity in which a new possibility emerges, one that benefits all. Mutuality calls for deeply open and honest dialogue and the ability to advocate for and to be willing to let go of one’s perspective and preferred solution. When mutuality is part of the process collaboration ensues. Passions are ignited and energy is directed because people have been engaged in creating the solutions. Their needs have been accounted for, but they have created a solution that goes beyond individual needs, and in the process they have developed a better self. Satisfying one’s needs is exactly and only that – satisfying. Developing a better self and working towards shared purpose is fulfilling.

©2010 Germane Insights. All Rights Reserved.

A leader’s ability to use the power of emotions is key to his/her success. Research on leadership shows that highly successful leaders have greater emotional competence than their less outstanding peers. Empathy – the ability to
know and feel what others experience – is the foundation of emotional intelligence. Companies ranging from health care to high tech are realizing benefits to their bottom line by creating cultures that promote emotional intelligence in interactions with customers and employees.

What are the benefits of emotional intelligence?

Empathy, the foundation of emotional intelligence, is key to achieving results in a number of arenas, from customer satisfaction to leading change. For example, at a large medical center, focus groups showed a key factor in patients’ satisfaction was the sense that “doctors, nurses and other providers genuinely care about me.” In a company undergoing major organization change, employees who felt “listened to” responded more readily and decided to stay with the company despite better financial opportunities elsewhere. Customers of a high tech company acknowledged that they are more likely to develop loyalty to and share critical information with sales people who demonstrate empathy.

Customer Intimacy

Customer intimacy is widely viewed as key to customer satisfaction and increased sales. While many companies strive for customer intimacy, few achieve the desired results. Those who understand, however, that customer intimacy is not a technique but a way of relating are realizing significant gains. A handful of companies, including Altera Corporation, Google and Abbott Laboratories, are using consultants who focus on building an empathic culture to achieve the rarely realized goals of customer intimacy.

One high tech company identified self-awareness and empathy as critical competencies for everyone from senior executives to front line sales people. They re-designed and implemented an organization structure, rewards, information systems and training programs to achieve a culture of customer intimacy/empathy where employees are emotionally savvy and empathic, technically competent and understand the customer’s business. They have seen an 11% increase in revenues, soaring employee satisfaction, and the best sales people in the industry are knocking on the company’s doors seeking employment. This company has achieved the true gains from creating an empathic culture. Others can too.

Can Empathy Be Developed?

Empathy is an innate capacity that can be honed and amplified. To do so involves adopting an empathic stance in order to heighten receptivity to important cues; learning to sense, attend to and interpret these cues; and responding in ways that convey emotional connection. Some professionals like Michael, a sales manager in a high tech company, find it difficult to shift their focus from driving a goal or a task to listening empathically. Examining underlying assumptions and experimenting with new ones can help. Michael has always believed that people would follow him due to the quality of his ideas and their confidence in his strategies. He focused only on managing people in the execution of plans and measuring results. He was, by comparison, ignoring the human side of the equation.

“Michael takes the wind right out of my sails,” said one employee. “When he called the other day, I was excited and telling him about progress my guys were making on a tough account. He cut me off with, ‘That’s good,’ and didn’t even take a breath before letting me know he was upset with me because he hadn’t yet received data he needed for a report. He really burst my bubble. When the call was over I just shut my laptop and was done for the day.”

Frustrated that his sales team was not achieving their goals, Michael agreed to experiment with a more empathic approach; to listen with greater attention and to be more of a coach and supporter. The employee quoted above speaks differently of Michael now. “I don’t avoid him anymore. I call him, let him know what’s going on and ask for his input and advice.”

Things look a lot different from Michael’s perspective as well. “Now that people know I care, they are asking, ‘What can I do for you, for the company?’ There is buy in to the message that comes from me as a leader. Critical things are getting done with much less push from me and more pull from them.” Michael’s region has exceeded their sales goals every quarter for the past year. They are the first region in the company to achieve greater than 50% market share in the U.S.

The Scientific Evidence for Empathy

Thoughts and ideas point us in a direction, but emotion fuels us to act and turn ideas into concrete reality. We are “excited” about the idea; “frustrated” when we do not bring it to fruition; and quot;fulfilled” when we do. Empathy is a catalyst for transforming emotion and directing energy. Scientific research is beginning to explain how this happens.

MRI studies indicate that during the course of an empathic “match”, the brains of both parties start to show similar patterns as if each is influencing the other’s brain activity. We see this in our daily lives. When a mother calms a crying infant, her voice and face match the baby’s pained expression. Then her soothing voice says, “You’ll be okay.” The baby’s cry softens and eventually stops. A customer service representative shares the customer’s sense of outrage over the way he was treated and apologizes on behalf of the company. Then calmly and confidently she assures action to resolve the issue. The customer responds by calming down.

When a sales person or a leader empathizes with a customer or employee, both people are on the same “wavelength”. Just like the mother with her infant, this opens the opportunity to influence both emotion and
resulting behaviors.

Empathy in the workplace is here to stay. Increased sales, strong customer loyalty, and increased employee commitment are just a few of the benefits realized by organizations that make empathy a part of their culture. Empathic leaders’ ability to direct people’s energy to realize a vision and affect change earns them respect and loyalty. They build trust by demonstrating an appreciation for what is important to those around them. Trust, in turn, is a clear competitive advantage that enables the entire organization to respond to the realities of the business landscape. When the leader demonstrates empathy, employees behave in similar ways with each other and with customers. This is the most direct and effective route to achieving customer intimacy.

©2010 Germane Insights. All Rights Reserved.

Empowerment is a way to increase your company’s success by involving everyone in the work force as a business partner who is highly invested in achieving outstanding results. Empowerment makes more resources available to the company because it taps the knowledge, skills, experience, motivation and commitment of each person, team and group within the company.

Empowered organizations do not come into being simply because the decision has been made. It is a gradual process during which leaders, managers, and employees negotiate the boundaries of this arrangement and learn to work together in new ways. Years of research indicate that empowered organizations achieve specific results by creating the right conditions, following key steps to achieve these conditions, and providing the appropriate structures and tools. The results include:

• Improved business results
• Increased commitment
• Greater employee satisfaction
• Attracting and retaining high performers

Creating the context

Empowerment takes place in a context, most of which is set by the company’s senior leaders. The context consists of the vision, values, goals, strategies, culture, structure and rules of the organization. The context has both formal (explicitly stated, often written) and informal (the way things work around here) aspects. To gain a clear picture of those forces to be considered when making choices about vision, values, etc. leaders often use some degree of input from external resources regarding demographics, the economy, the industry, the marketplace, etc. They may also use input from internal businesses, functions and experts at various levels within and external to the company.

Setting the boundaries

Empowerment does NOT mean that the manager or leader steps back and gives complete control to employee teams. In the empowered organization the leader/manager understands the company’s context, direction and their individual and team roles. The manager identifies the boundaries that determine who has what power in what areas and in what areas power is shared. The direction includes the vision, goals and strategies. The boundaries include the values, culture, structure, rules and roles.

Hierarchical command and control organizations establish rules, procedures, policies and structures that limit employee’s choices and scope of responsibility. For example, a rule about arriving at work at 8:00 and leaving at 5:00, limits the choices. Employees cannot arrive at 8:05 or leave at 4:45. There is no other choice but the one spelled out in the rule.

Empowered organizations set the boundary conditions within which employees can make decisions and open the field of possible choices. For example, a rule that states all employees must be present for the core hours 10:00 – 3:00 and must work 40 hours per week, is a rule that opens the field of possible choices the employee can make, within set limits. The employee is expected to consider the goals and the needs of his/her customers, the goals that have been set, etc. when making choices within the boundary conditions.

The change from a hierarchical to an empowered organization does not occur simply because the decision has been made. It is a gradual process during which leaders, managers, and employees negotiate the boundaries of this arrangement and learn to work together in a new way.

Getting Results – Collaboratively

TOGETHER teams and their leaders/managers determine WHAT WORK needs to be done in order to achieve the organization’s goals, given the team’s roles, the organization structure, values, etc. They also collaboratively determine HOW to do this work.

Why work collaboratively on WHAT WORK and HOW? Leaders and managers look outside the boundaries of the organization to understand industry direction, trends, practices, and other environmental effects. Employees are closer to the realities of how things actually work. These two perspectives are needed to continuously improve on what we do and how we do it.

Using the Tools

Successful organizations take the time to learn and use specific processes and tools for working collaboratively. The types of tools available include workshops and coaching in the following areas:

• Collaborative planning and problem solving
• Leading high performance teams
• Accessing group intelligence

These tools help organizations chart a path toward their end goal, opening new horizons for all involved. When the people understand the conditions under which they are expected to perform and are committed to the vision, direction and goals of the organization and their roles within it, clear decision making structures and processes become a natural
extension of the environment.

©2010 Germane Insights. All Rights Reserved.

Leaders in a rapidly changing global environment are challenged to guide their organizations towards what seems an unpredictable future. The forces that create that future, however are emerging now and can be discerned. Leaders can avoid being victims of what is to come and instead exert more influence over the future by employing a systematic approach to strategic planning.

There are three approaches to preparing for what lies ahead. The first relies on the hope that the resources you have today will be adequate to meet future circumstances. The second involves speculating about the future but engaging in little or no preparatory actions. This may result in a faster response after the fact and possibly some damage control. The third method involves analyzing the external environment in which the company operates; examining the current forces affecting the future of that environment; and identifying the best possible responses to these forces. Leaders who use this approach see the forces at play now, be they changes in demographics, customer base, competition or technologies. They find ways to engage these forces and bring about a future that benefits the company.

A five step approach to strategic planning is elaborated in this article.

Step 1 – Identify Key Constituents
Step 2 – Determine Critical Forces
Step 3 – Describe Desired Outcomes
Step 4 – Discover Opportunities and Threats
Step 5 – Develop Strategic Initiatives

Strategic Planning Process: An Open Systems Approach

Several principles of open systems theory inform this process:

• The organization affects and is affected by dynamic forces of the external environment
• The future is co-created by current forces and the patterns of responses to them
• The organization’s response to these forces determine its future

Step 1 – Identify Key Constituents

Identify constituents who provide input to and/or receive output from the company. Customers, vendors, the pool of potential employees, educational institutions, investors, and others receive output from the organization in the form of products, services, financial returns, payments, involvement in the community, etc. They also provide input to the organization in the form of demands, raw materials, labor, monetary investments, etc.

Step 2 – Determine Critical Forces

Next identify major forces that influence constituents’ future behavior relative to the company. What do you know about these forces? How is the direction, strength, and trajectory likely to change over the next 5-10 years? Explore questions such as what age segment of the population is growing? What is shaping the developing preferences of these future customers and employees?

For example the automotive industry’s business in the U.S. will be affected by slow overall population growth and an increase in the 50 plus age group. At the same time there will be tremendous population growth and economic development in India and China. To remain healthy, American auto makers must account for the shifting preferences resulting from such changes in their customer base. Other factors including scarcity and rising cost of fossil fuels will affect the automotive industry. It is a matter of survival to develop strategies now to deal with forces that are determining the future.

Consider Fit First, a company that designs and produces exercise equipment. Ten years ago they foresaw significant growth of the retirement aged population. Prevailing forces indicated that these retirees would live longer, have more disposable income and remain active for more years than previous generations. Fit First prepared for these changes in advance by developing products, services, packaging and delivery mechanisms to take advantage of market growth in this segment.

Step 3 – Describe Desired Outcomes

What would you like to see from each and all constituents in the next 5-10 years? You may want future employees to include at least one third of the top 3% of graduates from the best engineering programs. Perhaps in 10 years you want the 20-40 year olds in India to buy your cars to replace the two wheel technology they grew up with. Imagine the long term outcomes of being the first and primary company to convert this entire generation to the automobile!

Step 4 – Discover Opportunities and Threats

Articulate the company’s core strengths by examining questions such as:

• What is our competitive edge? What core expertise and talent accounts for our competitive edge?
• What do we have or do that attracts customers and constituents? What perspectives, knowledge, expertise and resources do we use to do so?

Next discover the areas of future opportunities and threats. The least costly opportunities for creating the desired future are to be discovered at the intersection of the key forces, desired outcomes and core strengths. The threats and more costly opportunities lie in the area defined by desired outcomes, key forces, and competencies the company does not have.

Why? It is costly, time consuming and difficult to transform the key strengths of a company. For example, consider the air travel industry. Economic and social forces are creating demand for travel to exotic places by some market segments. If an airline’s key strength is on time departures and arrivals to major cities, it will be hard pressed to transform itself to become the premiere provider of flights to exotic places utilized by a small number of high end travelers. This requires a different culture, attitude and core strengths and that degree of transformation takes more time, effort and investment.

Sometimes, however, the future is changing so dramatically that the company must transform to survive. Disruptive technologies create such change. When the forces of technology and a growing economy made air travel more accessible, the railroad industry could have seized the opportunity by becoming a provider of long distance transportation, rather than remaining a mover of rail cars. Such shifts in identity are not typically seen, because they exist outside the current way of thinking. Involving those who “think outside the box” enables leaders to consider ideas beyond their current reality and invest in changes needed to compete in that new reality.

Step 5 – Developing Strategic Initiatives

To generate ideas about “what to do” engage creative thinkers, innovators, and people who dream big ideas. Choose which concepts to pursue and charter the right people to develop selected initiatives, recommending changes to the company as needed. For example Fit Plus studied the lifestyle preferences of baby boomer retirees. Where would they live, in what type of housing? Where would they want to exercise? What physical aspects of aging would determine equipment features, packaging and delivery? In another example, a local employer decides to focus on the deteriorating public schools that are affecting the pool of future employees. They create a private/public partnership with other companies in the area to make long term improvements in public education.

Avoid The Biggest Strategic Mistakes

Involving outsiders in strategy development is key. Engage those with expertise in strategic planning, systems thinking, and from disciplines outside the core expertise of the company. By doing so, leaders avoid the biggest hidden error of strategy development – unknowingly employing a paradigm that distorts perceptions of what is happening now and what is possible in the future. Our operating paradigms or models determine, to a great degree, the strategies that will emerge. These models are not typically part of the conversation about strategy. “Insiders” share the same paradigm so no one see it. In addition, the company’s past success is build on this unseen paradigm. An outsider with a different view is more likely to see and be free to name the group’s operating assumptions and models.

Consider the following example. A country needs to gain access to a larger share of resources in order to continue its development. They operate from a paradigm that the world is flat. Sailing east across the Atlantic Ocean, therefore, will result in falling off the end of the earth. As such, expanded resources can only be won by moving west. All the resources to the west are controlled by legitimate governments. So they rely on diplomatic strategies to help them gain favor with these countries. A different paradigm, the world is round, enables a different strategy – discovery of resources not yet controlled by any government. As a result, they use their resources for travel and exploration. This strategy relies on different core talent – navigation and sailing versus diplomacy. They must also become a culture that takes risks in order to take advantage of this new approach.

Strategy development allows the corporation to plan for the future and remain healthy in a fast-paced ever changing environment. Using a systematic process and involving outside expertise is key to developing sound strategies. Leaders must also create a plan to implement the strategy that includes learning and adjusting along the way.

©2010 Germane Insights. All Rights Reserved.

“Thank God for 360 feedback – one of the most effective tools for managers and leaders who want to keep getting better at what they do.” Bill George, former CEO, Medtronics and author of True North, speaking at Human Resource Leadership Forum.

Personal note: A big thank you to K.H. a client who had the wisdom and courage to share his 360 results with each of his direct reports and ask them to talk openly about their own stories, experiences of and responses to him as a leader. He was profoundly changed by this experience, and has generously given me permission to refine the process and pay it forward.

The Triple Feedback Loop is a simple and powerful way to boost the value of 360 feedback and immediately increase trust, engagement and the leader’s effectiveness.

The standard 360 stops short of mining the greater riches contained within the feedback.

The Triple Feedback Loop provides you with a deeper understanding of your impact, how and why people respond the way they do, and what you can do to achieve your ideal outcomes. In addition, you will be and be seen as a better leader during the assessment itself. Additional benefits of Triple Feedback Loop include:

• More direct and open feedback now and in the future
• Increased trust
• Greater engagement of direct reports and peers

Standard 360 vs. the Triple Feedback Loop

Customizing the 360 process

Standard: You, your manager and your coach clarify why you want feedback and in what areas. A survey is selected and administered. In addition the coach conducts 1:1 interviews with your manager, peers, and direct reports, and may include others such as members of the board, your family, and customers.

Triple Feedback Loop: The coach also asks direct report what areas you need to explore and they identify potential responders. One Vice President of Sales intended to include only his direct reports, manager and customers. Using the Triple Feedback Loop led him to include his peers on the advice of his direct reports who knew these collegial relationships with Markeing and Engineering were a problem. The additional peer feedback allowed the VP to address issues that would otherwise have remained outside of his awareness. Including direct reports in the design of the 360 process also increased mutual respect, trust, openness, and emotional engagement with the VP’s vision and goals.

Reviewing Results

Standard: After the survey is administered and interviews are completed, the coach synthesizes results. You review them together to develop a greater understanding of your impact as a leader and create a development plan to address key areas.

Triple Feedback Loop: After you’ve had several days to digest and internalize the feedback you and your coach meet to prepare for 1:1 meetings with your responders to review the themes of the 360 feedback. This phase may require coaching on how to remain open, to inquire, explore, and listen empathically without being defensive. Working with the coach to establish and maintain this stance is critical. The objective of these meetings is to gain a deeper understanding of your self and others. You ask people to share stories and examples from their personal experiences of you. (Caution: If there is low trust and openness or little positive history with direct feedback more organizational preparation is needed before this step.)

Stories reveal what is personally important and emotionally significant. They inform you about how the story teller makes sense of what you do – or don’t do. Personal stories are key to understanding why you impact individuals in certain ways. The feedback results provide information but people’s stories provide the tone, texture and context that allow you to understand situations and people, including yourself, at the deeper levels that are critical for change to take place. In addition, the very act of paying attention to people’s stories and their emotions increases trust, openness and engagement.

Learning ,Change and Re-assessment

Triple Feedback Loop: As you implement you formal learning plan involve key responders . They can be spotters who observe and provide feedback on identified behaviors, role-models, teachers, sounding boards and more. In addition check back with responders every 3 months. Research indicates that leaders who follow up at regular intervals make more positive gains in feedback ratings compared to those who pursue little or no follow up.

Case Study Results

In a situation where business performance was suffering due to lack of emotional engagement with his team, K.H. received the following feedback at his 3 month re-assessment. In addition, within one year his team exceeded all sales goals. Two years later, they did so again.

“For the first time I felt he really listened to me. Now I want to come to work and support him instead of putting in the least effort to say I got the job done.”

“Our relationship has grown more in the past 6 months than it had in the previous 2 years.”

“He is paying attention and giving me the time I need to talk about what’s important to my business, so I go to him more for advice and counsel. This is making a big difference. He knows what’s going on in my business now, so we identify and solve problems faster.”

“I feel like he values me more, so I’m doing more.”

©2010 Germane Insights. All Rights Reserved.