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Leadership, Trust and Intangible Services

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Where do you draw the line between general best practices and vertical industry-specific applications? The answer, of course, is it depends. Specifically, it depends on the best practice, and on the industry. But what does that mean in the general case of leadership, and the specific industry of complex intangible services?

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Think of all the books on leadership in business. Now think about the leaders those books routinely cite as examples. Jamie Dimon may come to mind. Other names might include Jeff Bezos, Neil Armstrong, Ray Kroc, Pat Reilly, Steve Jobs, Walt Disney, or Jack Welch.

Now take this simple test. Imagine Jack Welch running a consulting firm. Imagine Jamie Dimon as CEO of an accounting firm. Ray Kroc running a law firm? Bill Belichik at an actuarial firm? Steve Jobs a commercial banker?

If these combinations sound a little “off” to you, there is a reason. Leadership is not a one-size-fits-all proposition. Most writing on leadership assumes a single definition of “business.” But leaders in certain businesses look decidedly different. Among those distinctive businesses, I would suggest, are retailing, high technology – and complex intangible services.

Intangible services firms often waste considerable time and effort in management development – and in management itself – by focusing unduly on leadership themes that are not business-relevant. Why? Because of the unconscious belief that there must be leadership “best practices,” and therefore what’s best for Apple/IBM/Amazon/Goldman must be best for everyone else as well. But the truth is, if Jeff Bezos is king, it’s only of one particular kingdom.

For complex intangible services, relative to industry at large, some leadership traits are more important – and some less important. The relatively more important themes are trust, coaching and values. Among the relatively overrated are vision and rewards systems.

GALP (GENERALLY ACCEPTED LEADERSHIP PRINCIPLES)

The list below shows the results of an unscientific quick scan of the business leadership literature. There are fifteen topics, arranged alphabetically. Most if not all these topics fall within four components of leadership identified by Warren Bennis, probably leadership’s top guru – vision, communication, trust, and personal characteristics.

LIST OF LEADERSHIP TRAITS: VARIOUS SOURCES

  • Charisma
  • Coaching
  • Credibility
  • Expertise
  • Implementing consistent systems
  • Inspiring people to greatness
  • Integrity
  • Leading by example
  • Organizing for flexibility and responsiveness
  • Personal development
  • Story-telling
  • Team-building capabilities
  • Trust
  • Vision
  • Values

The two “biggies” in leadership for industry at large may be vision and alignment. Vision is critical for leadership in many businesses. Without the compelling vision of an original leader, what would have become of Apple, Microsoft, McDonald’s, Amazon, and WalMart? Roberto Goizueta, as Coke’s CEO, gave a perfect example of leading by vision when he spoke of “a time when every faucet is used as God intended.”

Alignment is the other major leadership theme – alignment of message, rewards, incentives, measurement, and examples of leadership behavior. This focus on alignment is similar to the focus on vision in one respect – each is about the relentless reinforcement of a single, central theme, critical to the organization and its strategy.

Pick your metaphor: leadership in industry at large is like a) turning an aircraft carrier, b) being trail-boss on a cattle-drive, c) playing 3-dimensional chess, d) all the above. Leaders combine high-level direction-setting with the coordination of tactical complexities – relentless reinforcement of a theme.

Are all those key? Yes – for industry at large.

WHY LEADERSHIP IS DIFFERENT FOR INTANGIBLE SERVICES

By contrast, the dominant metaphor for intangible services businesses is widely accepted – it’s herding cats. And that calls for very different leadership.

The list below itemizes differences between industry and intangible services. Leadership in industry, of course, focuses on tangible “things” – markets, products, technologies, competitors, market shares, brand images, placement, positioning.

But intangible services are about abstractions, and about managing relationships to get there. They’re about process, not endpoints. The focus must be more on client service than on market share or competitive triumph. Every product/customer experience is non-trivially unique. Perfection is not about zero-defects, but about unbounded excellence – and excellence has no upper limit.

The relevant sports metaphor is not football, but solo sports like baseball or basketball. Professionals are, by and large, more driven, intellectual, internal, needy, hard on themselves, abstract, aloof, sensitive, and neurotic than their general management brothers and sisters.

In industry, strategy generally drives organization. In complex intangible services, strategy is as much driven as driver. An accounting firm may “decide”  to invest in M&A work; but the real driver behind the “plan” is inevitably a partner or two who have a personal passion for the work.

Visionary leadership is great for a Coke, GE, et al. “Be number one or number two in every business we are in” means something in a business like jet engines, where the top player of 3 may have 50% market share. It’s less useful in consulting, banking or law, where there are hundreds of competitors, where the professional is the product, and every client/professional experience is unique.

COMPLEX INTANGIBLE SERVICES: DIFFERENCES

  • No physical product
  • Smaller organizations
  • Far greater individual autonomy
  • More matrix or practice management
  • Higher average salaries
  • Professional/staff, not non-exempt/exempt
  • Fewer direct reporting lines
  • Lower levels of industry concentration
  • Certification driven expertise (CPA, JD, etc.)
  • Less history of branding
  • Apprentice system of personal development
  • Less functional specialization re selling
  • More fluid, ad hoc teams
  • No upper limit to quality (e.g. no 6-sigma)

DEVELOPING LEADERS FOR INTANGIBLE SERVICES

In complex intangible services, visionary leadership is overrated. The best leaders inspire not by the relentless reinforcement of a theme, but by demonstrating a passion for client service. A vision is an idea – client service is an attitude. Visions are about goals; client service is about mindsets.

Leaders in industry capture attention; leaders in intangible services celebrate paying attention. In this one respect, intangible services businesses are more values-driven than other industries. I don’t mean social virtues, but values like client focus and collaboration.

Measurement systems also matter less. When every client situation is unique, the apprenticeship model applies; leaders must focus less on refining measurements, and more on getting the right people to do the right things – often despite the measurements, not because of them.

Leadership is less systemic and more personal. Cats are un-herdable – that’s the point of the joke. But they can be led, precisely by appealing to their cat-ness. Great leaders help people to grow, to replace their fears by cultivating curiosity, to subordinate their egos to client service, to dare to be great and constantly challenge themselves – to gain the ability to trust, and earn the right to be trusted.

Finally, leadership in intangible services is mainly about personal growth. That is not a platitude. In a business where every client/service delivery event is unique, personal growth is a strategic sine qua non. Not growth as a generic leader – growth as a human being.

A leader of cats can’t just be the Greatest Cat: (s)he has the be the one who best understands cat-ness.

Leadership Development: the Trust Perspective

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Leadership and Development, Trusted Advisor, Trust-Based LeadershipI rarely write blogposts promoting the services we offer. But since we have something new to offer – this is one of those times.

Are you involved with issues of leadership in your organization? Then you may be interested in our newest service offering, Trust-based Leadership.

And if learning and developments is not your thing, please pass it on to the appropriate person.

Trust-based Leadership joins our two other flagship programs – Being Trusted Advisors and Trust-based Selling. Here’s how it came about.

The Case for Trust-based Leadership

In 2011’s The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading With Trust, Andrea Howe and I articulated the central role of trust in leadership. That may sound like a no-brainer, but it’s not all that obvious. Historically, the idea of “leadership” has been all about vertical relationships – leaders and followers, the high-potential few, charisma. Not so much anymore.

Now, critical business relationships have moved to the horizontal dimension: partners, joint ventures, alignment, startups, remote teams. In such environments, leaders have no direct control – they can’t give orders, they often can’t even offer incentives. What they can do, and must do, is influence people to move in the same general direction. And the number one driver of influence is – trust.

(For a longer discussion of this issue, see The New Leadership is Horizontal, Not Vertical).

Trust-based Leadership – the Program 

We’ve had this program in development since early summer 2012, and it’s finally ready. A one-day program, it’s almost entirely experiential. It is aimed at supervisory to mid-level  groups in all kinds of businesses and organizations. It comes with diagnostics and sustainment plans. See more details here.

It is based on material contained in The Trusted Advisor Fieldbook. Trainers have been certified, the program has been piloted (to rave reviews), and it’s available for train-the-trainer for larger organizations, starting now. (Available at first in the US only; but stay tuned).

Email me [email protected] or call me directly at 1-855-TRUST01, ext. 1001 (that’s 1-855-878-7801, ext. 1001) for more information, and I will reply to you personally. I’d like to talk more with you about this exciting new program.

The New Leadership is Horizontal, Not Vertical

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Horizontal LeadershipSeveral decades ago, when “leadership” became a Big Thing, it was heavily personality-based. It posited Leadership as something done by Leaders, who had learned the art of how to Lead. As a consultant friend of mine, Renee Wingo, put it, “It’s a subject whose proponents can’t figure out whether it’s a noun, a verb, or a gerund.”

Leaders were thought of as those who were followed by others. This dichotomy fed the idea that there are two kinds of people in this world – those who lead, and those who follow. Besides reinforcing the personality-based view of leadership, it raises the classic make or buy question – are Leaders just born, or can their secrets be unlocked and learned by others?

Finally, this distinction between leaders and followers fed a natural assumption that those roles were vertically related within an organization. Think military chain of command. Think bosses and subordinates.  To this day you’ll find many business writers harping on “the difference between leaders and managers,” as if the terms carried some ordained meaning.  In any case, it meant that leaders outranked followers.

Warren Bennis was (and still is) the [leading] guru of leadership. Much of what he has written is about Great Leaders, whether as exemplars, or as subjects in their own right. He held conversations with Leaders, who basked in his attention as much as he did in theirs. The majority of Bennis’s many book titles on the subject center around the noun “leader.”

Leadership development, in this personality-based view of the subject, was something that companies offered to elite groups – those with “high potential,” who had the inner capabilities to become leaders of others. The few, the proud, the Leaders – those were the ones granted the key to the next level.

Away from Personality-based Leadership

That was then; this is now. Things have changed, gradually but firmly. The concept of a hierarchical, vertical relationship between “leaders” and “followers” or “managers” has become less and less descriptive of the world of business. In its place we have networks, webs, relationships, alliances, collaborations, joint ventures, ecosystems, cultures, and communities.

This is not just a function of web-based aggregations, or faddish vocabulary. It is built into industrial structure, with much greater global sourcing, modular supply chains, and focus on core businesses. Language follows structure, not the other way ’round.

Enter Horizontal Leadership

What that means for leadership is simple but profound: the essential relationships are no longer the vertical relationships contained within corporate silos,  but the horizontal ones that link people across organizational boundaries. The New Leadership isn’t vertical, it’s horizontal.

This forces us to do a better job of defining leadership.  It never was about getting people to follow; it was about getting things done. It still is. Except now you get things done less by lining up the troops, and more by generating movement around a common goal. Horizontal leadership might be defined as “persuading others over whom you have absolutely no direct control to join you in a common cause.”

The “skills” of old and new leadership certainly overlap. You can’t lead horizontally or vertically if people think you’re dull, or an ass-kisser, or hopelessly insecure. But there are differences. The skills of horizontal leadership rhyme with influence, persuasion, and trust. Particularly trust.

Because the biggest difference between vertical and horizontal leadership is reciprocity. To be a vertical leader, you don’t have to be a good follower. But to be a good horizontal leader, you must know how to be trusted – and how to trust. It is not enough to be trustworthy; you must also be a risk-taker, and know how to be vulnerable, two prerequisites of the ability to trust.

Vertical leadership, like command and control, largely goes one way – from top down. But horizontal leadership is best practiced through trust, and trust is bi-lateral; you have to be good at trusting, and at being trusted. “Leader” is not a permanent attribute – it is a mindset/skill-set/role that is played at a given time by a given person, who the next day must play, equally well, the role of follower.

Which means, in today’s world, we each have to behave as leaders, or we simply don’t succeed. This is not New Age pablum-talk; it is a meaningful statement. In a networked, connected world, the skills of playing nicely together in the sandbox – horizontal leadership – cannot be squandered on an elite “high-potential” group; they have to be broadly taught. The concept of leadership development needs democratizing.

The future of leadership is horizontal, not vertical; and the future of horizontal leadership is learning the ways of trust. That means teaching trusting, and being trusted. And it means an approach to teaching leadership that is far more broadly-based than it has been.

Good Things Happen When you Swing the Bat

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At a talk last week, new friend Petter Østberg told me an old story with a new twist. It takes a great sports metaphor for achievement – and steps it up a notch to leadership.

First, the metaphor at Level One.

If You Don’t Do A, You Can’t Get B

You’ve heard this one before as, “If you leave the putt short, you are 100% guaranteed to miss the putt; never leave it short of the hole.”

Or maybe you know The Great One, Wayne Gretzky: “You miss 100% of the shots you never take.”  It’s not just about scoring percentage, in other words, it’s also – very much – about shots on goal.

You also know, “No pain, no gain.” “You’ve got to pay to play.” One of my favorites is the thundering voice from heaven that comes down to the whining loser who is kvetching about never winning the lottery: “Do me a favor – first, buy a ticket.”

All these metaphors remind us of the need to take risks. In our misguided efforts to avoid the risk of doing the wrong thing (call that Type 1 error), we end up not doing the right thing (call that Type 2 error). And in life, as in nearly every sport, it is that Type 2 error that ends up being the Big Bomb.

To not take a risk is the biggest risk of all.

Petter’s story started out this way. A deceased dear friend of his helped run the Little League programs in their town. One of the lessons he taught kids was, “Good things happen when you swing the bat.” If all you do is “take” the pitch, you’re likely to end up striking out.

(Apologies to the non-baseball countries out there, but you get the idea).

Good, good. The youngsters are being taught this Big Truth as well, all’s joy in Mudville.

Getting People to Take Risks

But as David Maister points out powerfully in Strategy and the Fat Smoker, the trick is not cognitive. Just realizing you’re fat and shouldn’t smoke doesn’t mean you’re going to stop gorging and emulating a chimney. Would that it were that simple.

The failure of most corporate training programs (not to mention the people who take them) is to believe that cognition implies action. Entire classes of professions (lawyers come to mind) believe that if they can simply understand something, they have acquired the only thing they need to act upon it.

When it comes to algebra, fair enough.  Maybe even learning a foreign language.

But when it comes to altering substantive human behavior, that belief is So – Not – True.

So it is with golf, hockey, baseball, and I’m sure with cricket and futbol. Armchair athletes from the business world nod sagely as they receive this wisdom from Tiger, the Great One, His Airness, you name it.

“Yup,” they say, “that’s just how it is in my world; you gotta take that risk.”

But they don’t. They really, really don’t.

So: how do you get people to take risks?

Leadership and Role Modeling are Key to Change

Answer: you do it through role-modeling, and you do it young.

Back to Petter’s story.

The Little League coach didn’t just encourage his team to swing the bat. He told the kids’ coaches and the kids’ parents to tell their kids to swing the bat, and with the passing of this dedicated coach just before this year’s baseball season, you now hear his mantra – “Good things happen when you swing the bat” – echoed on every playing field in his town.

The kids got the message, but here’s what he told the coaches:

Look, guys. I know you all mean well. But when a kid swings at a pitch a foot over his head, what do I hear you tell him?  “Lay off the high cheese,” you yell, gesturing with your hand high above your head, “wait for a good one – wait for your pitch. ”

And that is just wrong. These kids look up to you. You’re their leader. This is one of the few remaining times in their lives they’re going to listen to someone, and it’s you they’re listening to now.

These players are very young, and they’ll get more coordinated, that’s nature, but they won’t become better batters unless they swing the bat. There are plenty of other people who will teach them over and over the dangers of taking a swing; don’t you add to that.

Because if they wait for life to serve them up “their” pitch, they’ll lead wasted lives, waiting for that pitch. In life, that pitch rarely comes.

Don’t do that to them. Instead, teach them that if you swing, all things are possible. If you don’t, nothing is. Don’t you wish someone had taught you that?

I know I do. Thanks Petter for that story, and lesson.

The Evolution of Trust-based Leadership

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In 2000, I co-wrote The Trusted Advisor, with David Maister and Rob Galford. At the time, it was aimed largely at external professional services advisors. The word “leadership” appeared exactly once in the book (I checked).

This month, Andrea Howe and I published The Trusted Advisor Fieldbook. The subtitle is, “A Comprehensive Toolkit for Leading with Trust.” “Leadership” occurs 19 times, and the l-word itself appears many more times in its various forms.

What changed?

Trust Didn’t Change

The dynamics of trust are the same. I’ve developed the Trust Quotient and the Trust Principles since 2000, but the fundamentals are the same. The Trust Equation, the ELFEC process for creating trust, the dynamics between trustor and trustee are unchanged.

That’s hardly surprising. Trust is a fundamental human relationship that’s been around since well before the written word.

The World Changed

My Trusted Advisor co-author Rob Galford was more prescient than I; he wrote The Trusted Leader way back in 2003. Or, maybe he was ahead of his time. In any case, by 2011, the world looked radically different than it did in 2000.

In particular, the business world is:

  • Flatter – more horizontally linked, less vertically integrated
  • More inter-connected: think Linked-In, outsourcing, offshoring
  • More wired – Windows XP was then; the cloud and iPad are now
  • More independent – Boomers ruled then; millennials rule now
  • More collaborative ­– YourCo against the world is DeadCo
  • More transparent – Facebook, data scraping, digitized everything
  • More networked – a competitor in one line is a partner in another.

Leadership Changed

In 2000, “leadership” conjured up images of #1 leader Jack Welch pacing the floor in front of high-potential candidates at Crotonville, violating the chain of command with exhortations for “boundarylessness” – as long as it stayed within the boundaries of the corporation known as GE, that is.

Today, “high-potential” sounds not just elitist but out of whack with reality. Just as everyone today is a salesperson, everyone is in customer service – so too everyone is a leader.

That’s not corporate double-speak; it has meaning. The leadership skills of today are persuasion, influence, collaboration, the ability to create alliances, to join forces, to create environments that encourage collaboration, the ability to play nicely together in the sandbox, to forge agreements, and to play long-term win-win rather than screw-your-customer to jack up the quarterly numbers.

Leadership Skills are Trust Skills

Those skills are trust skills. We don’t need fierce competitors, we need fierce collaborators. We don’t need to ‘win one for the gipper,’ we need to win one for all of us. We don’t need vertical skills, we need horizontal skills.

Certain leadership skills are constant: the ability to inspire, to create and articulate visions and stories, for example. But others have been replaced. Being good at vicious infighting to gain the top job is – on balance, in most companies – a lot more dysfunctional these days than valuable. Making “tough decisions” isn’t the virtue it used to be; sometimes it just reflects a failure of imagination.

Today organizations are less about being led and more about cultures that foster leadership throughout.  Such cultures are driven by what we call Virtues and Values.

But that’s another story for another blogpost.

Trust based Leadership

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With all the trust surveys proliferating out there, I’m sure one of them includes questions that rhyme with “do you trust leadership of __?” And if so, I’m pretty sure the numbers have declined over recent years.

And I think most C-suites would agree that leadership—at corporate and institutional levels—would benefit greatly from being more trusted. In other words, the times scream out for a clear approach to trust-based leadership.

So—here are the headlines. 

Trust-based Leadership: the Top Ten List

1.    Don’t Fake It. The best way to be trusted—by far–is simply to be trustworthy. Reputation follows trustworthiness—not the reverse. The best PR comes from publicizing good things, not from spinning them. Don’t put your marketing, PR, or communications in charge of trust; you are in charge of trust, 24-7, by your own thoughts and actions. Don’t confuse the metrics with what they are supposed to measure.

2.    Your Ego is Not Your Amigo. Being driven can be OK. So too can being impatient, customer-obsessed, product-obsessed, design-obsessed, or people-obsessed. What cannot be OK is being obsessed with yourself. If you can’t check your ego at the door, seek professional help; stop taking it out on others. It is Not About You. If you think it is About You–you might be a bad leader.  

3.    Collaborate, Don’t Compete. No one is the enemy. Not your customer, not your supply chain, your employees, the union, not even your competitors. If you think you are competing with anyone, you are focused on gaining advantage over others; you are making yourself the center of things. (See Rule 2 above). Let others obsess with competing. You be the one to go think about what you can do for [customers, employees, your supply chain, even your competitor]. She who adds the most value lives best. And longest, at least in terms of client loyalty.

4.    Leading is Emotional. Choose your own leader; not one of the Usual Suspects. Now ask: were they passionate? My guess is they were, and their moments of passion were the source of much of their influence. Leaders lead, which means others follow them, and emotional passion is a big driver. Very few people follow the numbers-only guy or gal.

5.    Integrity Means Wholeness. You can’t be all things to all people. The more you try, the less integrity you appear to have. What you can do is to be the same person, at all times, to all people. That makes you whole, entire, integral—one who has integrity. A leader is unafraid to show his whole self.

6.    Be Transparent. A trust-based leader welcomes reality. The goal is to change reality, not to spin it. To see things as they are and to change them is noble. To see things as they aren’t and talk about them as you think you would wish others to see you as talking—well, that’s just BS. Don’t go there.   A leader knows that reality is her friend.

7.    Play Long Ball. You can’t be transactional and be trusted. Transactions can only be trusted in packages. Time is the key. Never cut a deal with someone—cut the 27th deal in a chain of 132 deals you intend to cut with them. That way you build a relationship—reliability, connection, mutual obligations, and the business vocabulary to express them. A leader is always thinking and acting in the long term.

8.    It’s Personal. The Godfather line, “It’s not personal; it’s business” was precisely wrong. It is both. Leadership can’t be trusted unless leaders are trustworthy. Companies aren’t trusted (except for the narrow case of reliability); people are. Trust can be engineered; but at the end of the day, all trust is experienced as personal.  A leader exemplifies it.

9.    Trust is Relationship. Robinson Crusoe didn’t need trust (before Friday, anyway). Trust is like ballroom dancing—you need two to tango. One trusts, the other is trusted. One by itself isn’t even the sound of one hand clapping. It’s non-trust. You can’t be trusted if you don’t trust back.  There is no trust without both parties in relationship. A leader knows how to play both roles; by trusting, he becomes trusted. By being trustworthy, he invites trust.

10.There is no Trust without Risk. Trust mitigates risk, but only by taking another risk. Ronald Reagan’s ‘trust but verify’ was good politics, but bad trust. Verification destroys trust. Trust is risk freely-taken, for the greater advantage of both. It is paradoxical, which is why risk-mitigation techniques end up destroying it. A leader knows that sometimes, she’s just gotta take a leap.

Leadership and Folk Wisdom

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The literature on leadership is distinctive in two respects—its volume, and its level of generality. Maybe it’s just me, but I tend to glaze over when I can’t figure out if the subject being discussed is a verb or a noun.

So it’s interesting when you run across a piece on leadership that is clear in its point of view. Even moreso when it blends two normally disparate realms—say, Harvard Business Review and, for lack of a better term, folk wisdom.

The February, 2007 issue of HBR contains “Discovering Your Authentic Leadership,” by Bill George, Peter Sims, Andrew McLean and Diana Mayer. Bill George is former CEO of Medtronic, now at HBS, and author of Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. All authors are now academics.

The juxtapositions are mine, but I like to think you’ll think to like them.

 

You do not have to be born with specific characteristics or traits of a leader. Leadership emerges from your life story. HBR

We are human beings, not human doings. Folk wisdom.

 

When the 75 members of Stanford Graduate School of Business’s Advisory Council were asked to recommend the most important capability for leaders to develop, their answer was nearly unanimous: self-awareness. HBR

The unexamined life is not worth living. FW

People trust you when you are genuine and authentic, not a replica of someone else. HBR

Be what you is, not what you is not. FW


Knowing their authentic selves requires the courage and honesty to open up and examine their experiences. As they do so, leaders become more humane and willing to be vulnerable. HBR

Where am I? Here. What time is it? Now. FW


Discovering your authentic leadership requires a commitment to developing yourself. HBR

If you don’t know what you don’t know, you don’t know much. FW


Being authentic means maintaining a sense of self no matter where you are. HBR

No matter where you go—there you are. FW

 

Authentic leaders realize that they have to be willing to listen to feedback—especially the kind they don’t want to hear. HBR

The truth shall set you free. FW

Authentic leaders are constantly aware of the importance of staying grounded. HBR

If you’ve got one foot in yesterday, and another in tomorrow, you’re well positioned to piss on today. FW

 

Intrinsic motivations are congruent with your values and are more fulfilling than extrinsic motivations. HBR

About playing music—if it’s not play, stop. If it’s not music, stop. Don’t practice scales, play music. Don’t work at it, choose it. FW


[authentic leaders]…see themselves not as passive observers of their lives but rather as individuals who can develop self-awareness from their experiences. HBR

Pain is inevitable; suffering is optional. FW


Superior results over a sustained period of time is the ultimate mark of an authentic leader. HBR

No one writes on their tombstone, I should’ve stayed a few more hours at the office. FW