Where do I start—the best people or the best strategy?

When working as an executive in the U.S, I experienced the early, unsettling days of the Global Financial Crisis that began in 2008/09. I saw the collapse of the housing market, severe falls on Wall Street, companies letting go thousands of employees, and many major financial institutions filing for bankruptcy or being acquired by those in a stronger position. Headlines were dominated by the fall of Merrill Lynch, Bear Stearns, Countrywide Financial, the Lehman Brothers, Washington Mutual, and AIG. Everybody seemed to be blaming somebody else. We didn’t want to admit our failures were due to a lack of character. In What Money Can’t Buy: The Moral Limits of Markets, Michael Sandel says – The era of market triumphalism has come to an end. The financial crisis did more than cast doubt on the ability of markets to allocate risk efficiently. It also prompted a widespread sense that markets have become detached from morals and that we need somehow to reconnect them.[i] What we do know is that successful people and successful companies can come undone through a lack of character. High profile examples include: Rupert Murdoch’s ‘News of the World’ phone hacking scandal; Jeff Skilling, CEO of the Enron Corporation, was convicted for hiding billions of dollars in 2001; in 2005, Dennis Kozlowskis (CEO) and Mark Schwartz (CFO) of the Tyco Corporation were jailed for similar crimes; corruption at the FIFA board level; and more recently, the Volkswagon emissions scandal. None of us, however, are immune to moral failure or lapses in judgment, and sometimes it is closer than we think. For this reason alone, it is important to define what you are looking for in leaders when recruiting them, and what you expect from them once they are employed. In determining leadership potential and which candidates were most likely to succeed as leaders, the IBM Executive School discovered that while there was no commonality between skills and knowledge, there was commonality between values and attitudes.[ii] While competency is extremely important, the issue we appear to be grappling with the most, is character. André Delbecq alludes to this when he examines – “the failure of success, the corruption of triumph, and the danger of celebrity.”[iii] If character is going to play ‘second fiddle’ to competency, organizations and leaders will continue to feel increasingly vulnerable. It is the reason why LCP Global defines building resilient character as one of its competencies in the 5 leadership anchors™. What’s the bottom-line? First, we must seek change in ourselves that is consistent with what we expect of other leaders. Ask yourself – Do I expect of myself what I expect of others? When I recruit people, do I value both competency and character? Do I affirm and reward others for their contribution to building a culture where people flourish, not just rewarding them for their achievements? Am I willing to be accountable to for my actions?   [i] Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets (London, England: Penguin Books, 2012), 6. [ii] http://www.forbes.com/sites/augustturak/2012/03/02/10-leadership-lessons-from-the-ibm-executive-school/e [iii] Andre L. Delbecq, “The Spiritual Challenges of Power, Humility, and Love as Offsets to Leadership Hubris,” The Virtuous Organization: Insights from Some of the World’s Leading Management Thinkers, eds. Charles C. Manz et al., (Singapore: World Scientific Publishing, 2008), 97.

In 2006, Dr. André Martin for the Center for Creative Leadership (CCL), analyzed global trends in order to paint a picture of the challenges and needs facing organizations as they seek to develop leaders to guide them through the complexity and uncertainty of the future.[i] His research sample was 800 leaders aged 29-70. The organizations they led ranged in size from 11 employees to 10,000. Sixty percent were male and 30 percent of them were top executives. Although 52.7 percent were U.S-based, 28 different countries were represented. Dr. Martin’s primary assumption was that many leaders were not prepared for the rapidly changing global landscape. He highlights the work of Juan Enriques in, As the Future Catches You, who argues that the time span in which leaders have to prepare for change gives people twenty-four hours, rather than years.[ii] Best-selling author, Malcolm Gladwell, in two of his books, The Tipping Point: How Little Things Can Make a Big Difference and Blink: The Power of Thinking Without Thinking, says that society has reached a pivotal point requiring us to make decisions faster, and do it better and more effectively.[iii] Martin identifies four global trends from his research, of which we will address two. First, the Ground Truth of Globalization; the recognition that the world has changed and leaders have access to enormous amounts of information, which is compounding daily. Leaders were asked to assess their organizations across 11 continuums of leadership, comparing it from five years ago, to how they believe it is currently and what they believe it will be in five years. The data showed that leaders recognized there was a need to embrace more collaborative and innovative approaches to solving problems. Second, the Rise of Complex Challenges. Ninety-three percent of the leaders surveyed believed the challenges they faced were more complex than five years earlier, and that organisations tend to focus more on containing uncertainty rather than managing risk. From seven different impacts identified—cross-functional challenges (52.2%), collaboration (49.6%), and speed of response (44.8%) were the top three. However, only 38% saw collaboration as enhancing co-worker relationships. This means workers are being asked to improve collaboration for better outcomes, but don’t have time to build the very relationships they need to achieve them. This inability to develop and leverage key relationships undermines the need for a flourishing and productive work culture. What’s the bottom-line? Leaders who want their organizations to be effective and competitive must help their leaders and managers collaborate more by – Giving leaders skills they need to forge strong, healthy relationships and partnerships; Developing new systems of reward and recognition that demonstrate the importance of developing a workplace culture which cultivates behaviors that fuel greater success; and Aligning strategy, people, and technology in such a way they can adapt to the speed of change.   [i] André Martin, “A New Map of Leadership: Global Trends Impacting Leaders and Leadership Development,” Center for Creative Leadership (CCL), http://www.ccl.org/leadership/community/mapWebinar.aspx (accessed April 16, 2011). [ii] Juan Enriques, As the Future Catches You: How Genomics and Other Forces Are Changing Your Life, Work, Health, and Wealth (New York, NY: Crown Business, 2001). [Kindle Edition]. [iii] Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference (First Back Bay, 2002); Malcolm Gladwell, Blink: The Power of Thinking Without Thinking (New York, NY: Little, Brown & Company, 2005).