Last month I set out a model of leadership to help answer the persistent question, what does a great leader do? (See ?Rank has its Responsibilities ,? Professional Builder, August 2013).
Note that my answer is not the typical attribute model that most books and articles on leadership offer. Those treatises describe what leaders are like with traits such as decisive, action-oriented, inspiring, entrepreneurial, among a host of others in the same vein. Yet all the evidence suggests the contrary. That is, you cannot define strong leadership by attribute. Henry Ford, Harvey Firestone, and Thomas Edison were great friends and geniuses each in their own right, but a comparison of attributes shows they shared few traits beyond great vision for the application of new technology. In more modern times, Bill Gates and Steve Jobs were far more different than alike. Now throw in the mercenary-like Larry Ellison of Oracle and your ability to find common attributes among these giants of information technology is down to about one?they are all smart guys. But there are millions of smart folks who can hardly lead themselves, let alone others, so we?re back to square one.
You can run similar comparisons with presidents, football coaches, and auto industry executives and arrive at the same conclusion. So what about home building? I have known well the past five presidents of Pulte Homes from Bill Pulte to Richard Dugas, and I am hard-pressed to find a single common attribute among them. Outside of Pulte, compare well-known building executives Bob Toll to Don Tomnitz to Larry Webb, among others, and you?ll get no further. No, the attribute models do little for us other than show (perhaps unintentionally) that nearly any personality type, approach to analysis, or decision-making style can accompany strong leadership. It is much more productive and insightful to leave the attributes aside and understand instead what leaders are responsible for doing. The how they do these things is a seemingly limitless quagmire of variation that resists any reasonable effort to categorize.
Last month I detailed the seven responsibilities of leadership, suggesting that these are the areas with which the best leaders concern themselves. I know that the origin for these points have been influenced by a myriad of leaders I have read about, but more important, these responsibilities are inspired by many personal examples?leaders I either worked for or have been close to. As I relate my personal experience, think of examples from your own history on or off the job, because leaders often turn up in unexpected places.
1. Responsibility to self
Recently out of college and a new graduate of U.S. Steel?s management training program, my boss?s-boss?s-boss was a prince of a man named Walt Koehler. Walt was 6?5? and towered over the other senior managers, but his presence was not merely physical. Walt had alert, watchful eyes and walked very erect, in a purposeful manner that just projected leader. But those are merely traits and attributes. What did Walt do that showed he invested in his own well-being so that he could look after the well-being of others? In the mid-1970s, the only person admonishing us to eat right, stay fit, and get enough sleep was Jack LaLanne, that is, until I met Walt. Walt spoke about the work/life balance years before it became vogue and lectured us to always be reading and learning about subjects outside of work. He set an example by sharing stories and updates about his family, thus letting everyone else know that finding balance was not only okay, but expected. Walt was the rare leader with perfect congruency between what he said, and what he did.
2. Responsibility for strategy
I was a corporate vice president for Pulte Homes in the heady times of the early ?90s when we grew from 15 divisions toward 40 on the way to becoming the nation?s largest home builder. Hardly a week went by without an impressive entourage arriving with a big pitch about some fantastic opportunity that Pulte had to embark upon. These invitations ran the gamut from a massive steel-framing venture to teaching the Russians how to build single-family homes. But the most memorable was McDonald?s. They told us that building a McDonald?s restaurant was not much different than a single-family house and, of all the builders in America, their research said Pulte was the best at building systems. The fast-food giant was building thousands of new restaurants around the world and pitched Pulte on starting a division to focus exclusively on building restaurants for them.
To say we were excited and impressed is a gross understatement. Having your ego stroked mightily by the king of fast food made us almost giddy. After we worked ourselves into a fever pitch imagining the publicity and profit, not to mention limitless Big Macs and fries, Bob Burgess, then Pulte?s CEO, smacked down hard on our big round conference table and?using language a bit more colorful than I can relate here? rhetorically asked, ?We are not even in Columbus, Ohio! Why would we want to be in Beijing, China?? Just like that, Ronald McDonald walked out of our lives forever. Not long after, Bob engaged a big-time strategy consultant who led senior managers, both corporate and field operations, through a grueling exercise, forcing us to decide who we were, who our customers were, and what we wanted to be when we grew up. The discussions were often brutal with some relationships fractured beyond repair, but it was a necessary, watershed moment for the company and set the course for the next 10 years.
3. Responsibility to people
I often joke that I had to go into business for myself 15 years ago because I could not work for anyone else. I did find it hard to work for the majority of my bosses over the years, but there were fortunate exceptions. The best of all was Jim Waldrop, now president of HomeSphere. Of the many people I know who have worked or are working for Jim, virtually all seem to agree with that assessment. Together we could make a long list of things Jim does very well in each of these seven areas of responsibility, but I think No. 1 is people. Delta Airlines currently touts the expression, ?We have your back,? and it absolutely infuriates me because nothing could be further from reality. Jim Waldrop, however, never had to say it, because you just knew Jim always had your back. As he pushed you to grow and become stronger and smarter, Jim was always there to remove obstacles. The first question he so often asked as your boss was, ?What can I do to help you?? Because of that, I always wanted to do anything I could to help him. Biannual reviews with Jim were a nonevent in the assessment department because Jim gave me continuous feedback. Instead, those meetings became coaching and counseling sessions on how to help me reach my goals. At PCBC last June, I met two of Jim?s newest people. Without him around, I asked, ?Is Jim the best boss you ever worked for?? Both replied in unison, ?Absolutely.? There is no way to put a dollar value on having a leader that takes total responsibility for his or her people because in turn, that leader gets the unqualified best out of everyone around him. As the commercial says, priceless.
4. Responsibility to customers
Out of my innumerable positive experiences with exceptional customer care, I have been completely inspired by some people I recently met who have gone way beyond mere satisfaction to genuine customer delight. To set it up, however, let?s review something basic and essential to enterprise. What is the purpose of a business? If you immediately thought to make money, congratulations on being a well-trained American, but you are wrong. The true purpose of a business is to solve or prevent problems, fulfill needs, and remove pain. Do those things well and you will make money. Money is the result but not the goal. Don?t believe it? Ask any customer what they care about, their problem or your profit margin? Knowing this, how can we have any other attitude but to love, cherish, and adore customers?
I recently returned from more than three weeks in New Zealand with projects or presentations in four different cities. My trip worked out beautifully, allowing me to cover more than 2,000 miles by car in that stunningly beautiful country. The American hotel chain model has not taken hold there in this country of only 4 million people. As a result, 95 percent of hotels and motels are independently owned and operated by entrepreneurs, nearly all of them couples over 50. It is winter Down Under and decidedly not tourist season, so there was no need to book ahead in most places. On 10 different nights, we simply checked TripAdvisor.com the day before, picked a place highly rated by travelers, and booked online. The experience was astounding. In every single location, my wife and I were greeted as if we were long-lost friends. Whether in Christchurch, Greymouth, Nelson, Wellington, or Wanganui, the proprietors each went above and beyond our growing expectations, bringing a hot breakfast to our room, washing my laundry when the room machine went kaput, or moving our luggage from one room to another with a nicer view (no charge.) I could go on and on but understand my point. These business people feel totally responsible for us as customers, well beyond providing a comfortable and spotless room. They took responsibility for our contentment and well-being. What would happen if your leadership demonstrated that level of responsibility for your customers? Is there anything more important for a leader to do?
5. Responsibility for systems and process
As I stated last month, the job of a leader is to lead the creation of great systems and processes where solid everyday people can do a good job in the endeavor to provide exceptional products and services to delighted customers. Perhaps the best I ever met at this was Gary Grant, now retired from Pulte?s Minneapolis division. Gary was so strong on process, scheduling, and building systems, that what I tell you will strain credibility, although I assure you it is all true. Twenty years ago, before the advent of sophisticated software, handheld computers, and intelligent scheduling models, Gary?s schedule was always communicated to the trades and suppliers at least 60 days in advance, and he never missed. Remember this is Minneapolis, which during the winter months is actually colder than Calgary. Gary invited me to attend his monthly supplier/trade council meeting and two things resonate with me to this day. First, none of the 10 members could recall a single case in the past year when one of their crews had a wasted or even an extra trip to a building site. No one. They went on to describe a multitude of things Gary did better than anyone else in town, including having easily the best-trained superintendents and project managers. Finally the electrician looked at me and said, ?Scott, you have to understand something. Gary pays me the least of any builder in Minneapolis/ St. Paul, and I make the most profit working for him rather than with any other builder. He is that good.? Just imagine the results if you were so good at systems and processes that your suppliers and trades would say the same about you.
6. Responsibility to community
I grew up in the small, mostly farming community of Rushville, Ind., about half-way between Indianapolis and Cincinnati. Barely famous for being the home of Wendell Willkie, the Republican candidate for president in 1940, and later NASCAR driver Tony Stewart, aka ?The Rushville Rocket.? Not a whole lot happened there. Yet it is was a fine place to raise a family where most everyone knew each other, and kids could wander without fear any time of the day or night. One of our closest family friends was Bob Waggener, the owner of The Sampler Cherry Furniture Factory in Homer, just outside of Rushville. Bob was a bright-eyed, larger-than-life character with a close resemblance to Popeye, and I never met anyone more generous and caring about his community. He planned festivals, held big parties, started a church, took in and raised children of friends who fell onto hard times, promoted Rushville to anyone who would listen, and was generally there to help anyone in need. All the while, he built a business known to furniture connoisseurs nationwide. He was a pilot, a joke-teller, a singer of ridiculous songs and rhymes, and a square dancing promoter. On my list of most unforgettable characters, Bob is right up there at the top. But the older I get the more I realize how he inspired me, setting a premier example of concern for things beyond himself. If Bob had been more selfish, he?d no doubt have accumulated a fair amount of wealth. Yet Bob was perhaps the richest man I have ever known. His, is an example of genuine leadership.
7. Responsibility to investors
There is absolutely no shortage of leaders intensely focused on keeping investors happy. Yet the truly great ones do something that is exceedingly hard?keep the investors just as concerned about the long-term viability of the firm as they are for quarterly profit. There is a monumental difference between profit maximization and profit optimization. When I left graduate school in 1979, I landed at Motorola, a company in the throes of one of the greatest self-reinventions in industrial history. The firm was founded by Paul Galvin who with Bill Lear invented the car radio in the 1920s?hence the name, Motorola. The company became a consumer electronics giant, although not many under the age of 50 will recall their flagship TV brand, Quasar. By the mid-1970s the Japanese brands of Sony and Panasonic, among others, were in the process of burying the traditional American brands like RCA, Admiral, Zenith, and Quasar.
Paul?s son, Bob Galvin, succeeded him as Motorola?s chairman and CEO. Bob shocked investors and the public by announcing that the company would surrender the consumer electronics war, knowing that it could not be won. Through a company-wide realignment and focus on Six Sigma quality and manufacturing excellence, Motorola entered two decades of unprecedented growth, focusing on semiconductors, government electronics, public safety communication, and this new thing?the cellular phone. It was a gutsy move for which Bob took a lot of heat, but he saw the investors through the crisis and showed them greater profit on the other side. Long after Bob Galvin retired, his successors made some miscalculations that led to major losses, but that takes nothing away from Galvin?s leadership in the most difficult times.
It was my honor to have known the man just a bit, with our longest conversation coming at random while on a long bike ride. I accidently crossed his path to help him free his tractor, which was stuck on the side of a road in Barrington Hills, Ill. After I told him I worked for him about six levels down, he engaged me in an hour-long conversation, sincerely wanting to know how I thought the Motorola transition was going. Here I was in the presence of a giant of a leader, yet he was genuinely interested in what I had to say.
Those are the origins of the seven responsibilities of leadership model. I hope that while reviewing my experiences, you were able to recall some of your own. Next month I will present seven vignettes of American builders, one for each of the seven responsibilities, demonstrating what leadership looks like in our industry today.