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Five Rules for Leadership Success // Summary of Dave Ulrich’s ‘The Leadership Code’

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The key to success in any discipline is to figure out the few things that must be done really well and to get those basics right. But so many leaders fail on the fundamentals—and don’t even realize it.

The real implication of leadership has been buried deep over the years: leadership isn’t about the position but about who you are and the responsibility you can undertake. Leadership consultants Dave Ulrich, Norm Smallwood, and Kate Sweetman’s The Leadership Code: Five Rules to Lead By (2009) argues that everything you ever need to know about leadership comes down to five straightforward rules.

If you understand these rules and put them into practice, you can’t fail to spur others and enrich teams, organizations, or communities.

Rule 1: Be A Strategist. Deliberate leaders answer the question “Where are we going?” and mull over multiple time frames. They institute a great enough sense of urgency and remove impediments to the new vision. They anticipate the future and work with others to determine how to advance from the present to the desired future. Shape the future.

Rule 2: Be an Executor. The “executor” aspect of leadership focuses on the question, “How will we make sure we get to where we are going?” Effective leaders understand how to make change happen, assign accountability, assess plans, coordinate efforts, and share information that should be incorporated into strategies. Make things happen.

Rule 3: Be a Talent Manager. Leaders who engage talent now answer the question, “Who goes with us on our business journey?” They select the right people for the right job and ensure that people have the right tools and autonomy to succeed. Leaders foster an inviting organization, create a high level of performance and passion, and continuously monitor problems that need to be fixed. Engage today’s talent.

Rule 4: Be a Human Capital Developer. Leaders who are talent developers answer the question, “Who stays and sustains the organization for the next generation?” Leaders take the time to become aware of how future trends could affect their organizations. They position their teams to win by bearing in mind the longer-term competencies required for future strategic success. Build the next generation.

Rule 5: Be Proficient. Leadership demands are more daunting than ever, and the pressure to perform is relentless. Create regular timeouts to review where you invest your time and energy to ensure that you remain capable of self-managing your personal strengths and weaknesses and generating new behaviors to deal with new challenges. Invest in yourself.

As with most “rules-for-success” books, the authors tout their assessment of “hundreds of studies, frameworks, and tools.” But their work is no more than a distillation of notable leadership thinkers’ experiences. Nonetheless, the rules sound right. The five rules are simple, but they aren’t easy. They are sensible and practicable. They’re what you can focus your effort on for maximum return.

Recommendation: Quick read The Leadership Code. It makes a great early book choice for new leaders. It provides a grounded approach to the fundamentals.

Never underestimate the power of key leadership principles that can be well executed. Complement The Leadership Code with Peter Drucker’s The Practice of Management (1954; my summary) and Julie Zhuo’s The Making of a Manager (2019; my summary.)

Easy Money, Bad Deals, Poor Timing: The General Electric Debacle // Summary of ‘Lights Out’

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The story arc of the unraveling of General Electric should be familiar to followers of business news over the last two decades. Wall Street Journal reporters Thomas Gryta and Ted Mann’s crisp Lights Out: Pride, Delusion, and the Fall of General Electric (2020) draws together the vital episodes in one impassive narrative. It’s brimming with lessons about the hazards of obsessively focusing on impressing Wall Street.

Decades of Bad Decisions and Careless Oversight Ruined GE

'Lights Out General Electric' by Thomas Gryta (ISBN 035856705X) The fall of General Electric is really the story of how long-time CEO Jeff Immelt got saddled with the doomed legacy of the previous CEO, Jack Welch.

In 2001, Immelt took over a ship that was in trouble but wasn’t sinking yet. Unbeknownst to many analysts and investors—and overlooked by Jack Welch-buffs,—General Electric had been spoiled by greed, lack of transparency, and “lax oversight and buried risks.”

As a rising star, Immelt was part of Welch’s apparatus, perhaps to a smaller extent, at the GE Medical Systems division that Immelt ran previously. Early in his tenure as CEO, Immelt realized the scope of a disaster in the making. However, he didn’t act quickly and decidedly enough to fix the ill-fated ship’s rotten bits.

To focus on the stock’s negative return during Immelt’s 16 years as CEO and pit it against the sixtyfold return over Welch’s 20-year term is myopic. This argument is definitely understandable, yet it is scarcely convincing.

Welch’s good times couldn’t last forever, and Immelt had a tough act to follow. Yes, Welch was a forceful numbers-obsessed management mastermind who transformed GE into the world’s largest, most profitable, and best-admired company during his tenure as CEO. However, many of the mistakes of his corporate strategy manifested years later.

Welch would argue that he pushed his underlings to produce results, not fraud. But even if the CEO didn’t bend the rules himself, Welch cultivated an environment of pressure that incentivized people to do just that.

Welch was fond of saying, “You reinforce the behaviors that you reward. If you reward candor, you’ll get it.” Welch’s playbook rewarded—and got—the worst traits of modern capitalism. In so doing, he sowed the seeds of the company’s tragic decline.

Jack Welch’s Playbook Was Long-term Destructive to GE

Welch had a take-no-prisoners attitude to running GE. He set overly aggressive targets for his managers. He engaged in accounting shenanigans and consistently “managed” the numbers to maintain the myth of consistency and limitless growth. Behind the scenes, Welch’s machination was made possible by crafty-but-legal accounting practices (with auditor KPMG’s blessings, nonetheless,) mazes of financial deals, and murky structures. Welch even underfunded reinsurance reserves by $9.4 billion, helping pump up profits from 1997 to 2001.

Managing financial results wasn’t unique to GE, but the degree of GE’s reliance on the practice was. Management, with its customary swagger, treated the frenzy of last-minute tweaks and transactions each quarter as entirely natural. GE executives have acknowledged that they worked to make sure earnings were always growing in a nice smooth trajectory.

Immelt knew—or came to comprehend—of all this tomfoolery but didn’t break GE’s bad habits swiftly. Specifically, Immelt didn’t dismantle the GE Capital unit, the company’s most significant liability, and it continued to haunt GE. Under pressure, the complex conglomerate structure that Welch had held together during the good times of the ’80s and the ’90s started falling apart towards the end of his tenure.

The winds were shifting on Welch. GE’s share price had soared for years, making it, for a time, the world’s most valuable company. [During Welch’s] final eighteen months, the share price fell 33 percent. … [Bond-market guru Bill Gross commented,] “Institutional investors have wondered why a company can continue to produce 15 percent earnings growth year after year, quarter after quarter.”

An Addiction That Was So Hard to Break

At the heart of General Electric’s fall is how GE Capital came to gain an outsized influence over the parent company and ruined it. Under Jack Welch, GE Capital’s business model of high leverage and “financialization” was resoundingly successful. Financial engineering, e.g., recognizing revenue from long-term service contracts for power-plant repairs and jet-engine maintenance, is not only suspect, but it cannot manufacture results beyond the short term.

GE Capital was the nonbank bank that was embedded in the company’s fabric. Everything that GE produced was leased, rented, or loaned by GE Capital. In other words, the industrial side was sustained by the rise of GE Capital. It was too interlinked to everything else, and that impeded Immelt’s “definancialization” plans.

In the ’90s, Welch embraced the notion that it’s a lot easier to make money in financial services than in industrial manufacturing. The Capital unit provided huge dividends (with enormous risks) while the industrial side was less profitable but more stable.

No wonder, then, that Welch made GE Capital a gargantuan part of GE. GE Capital became the vehicle for his headlong obsession with enhancing pure shareholder value.

Sadly, Welch bet the farm on the continued success of GE Capital. It misused GE’s high-quality credit rating and became a colossal lender and a major shadow bank. Welch’s bet went sour in 2008—GE Capital was the largest commercial paper issuer going into the financial crisis. It needed a $139 billion government bailout, and it has continued to drain the company’s bottom line ever since.

Jeff Immelt focused on pivoting GE towards core industrial businesses. He doubled GE’s investment in R&D. He sold off slower-growth, low-tech, and nonindustrial businesses, but not soon enough. He managed to keep revenues growing and delivered high margins until the financial crisis hit.

Cleaning Up the Mess Left by Welch

Even as Immelt went about restructuring the company around industrial products, he continued to rely on GE Capital “for smoothing out rough quarters and delivering easy profits.” It was a hard addiction to break.

Lights Out acknowledges that Immelt was “playing with a tough hand,” and he knew that “his success would be attributed to his predecessor but his failure would be seen as all his own doing.”

The authors reveal plenty of leadership blind spots. Immelt was a genial and assertive salesperson, and he didn’t like hearing bad news. He didn’t like delivering bad news either.

CEOs are expected to be optimistic, but Immelt was unfailingly overoptimistic. Perhaps his overconfidence was a manifest outcome of the company’s cultural dynamics. Sadly, when a company is doing well, such CEO attributes as optimism, audacity, and foresight that Immelt’s leadership personified are heralded as brilliant, but when things go wrong, they’re the first to get the blame. Results are all that matters.

Some board members … had … a poor impression of Immelt’s deal-making skills. The knock on Immelt was that he chased trends, arrived too late, and paid handsomely. One rival CEO joked that he was “fad surfing.”

Immelt Made Bad Decisions and Was Slow to Make Changes

Immelt spent over $100 billion on ill-timed share buybacks to shore up earnings-per-share and so the stock price. He had a history of overpaying for acquisitions. He was reluctant to back away from deals that he was dead set on, even when the deal’s prospects became dubious during the parleying.

Immelt tended to start negotiations too high, sometimes to the surprise of others involved in the deal, leaving little room for negotiation. It wasn’t uncommon for the board to approve one of Immelt’s deals, only to have him ask for approval to pay more in order to make the deal work. In some ways, this tendency simply reflected Immelt’s experience as a salesman. He’d always needed to close deals, and for a company like GE, paying a little more didn’t seem to cause any concern.

No decision could be more illustrative of Immelt’s fateful deal-making than the one for Alstom, the French power generating equipment company. Immelt set his reputation on that deal because GE Power would be “the centerpiece of his new GE.” Immelt didn’t walk out on the deal even after regulators forced General Electric to divest Alstom’s lucrative service business and take on 30,000 high-cost employees in Europe.

Worst of all, the deal was spectacularly mistimed. With the Alstom purchase, Immelt doubled down on fossil-fuel-fired turbines just as renewables were becoming more cost-competitive. Demand for GE Power’s products collapsed in next to no time, and that unit’s profit plunged 45% in 2017. The whole Alstom transaction turned out to be an out-and-out disaster. In 2018, General Electric took a $22 billion goodwill impairment charge for the Alstom acquisition.

Hope and Optimism Could Take Immelt Only So Far

It’s both easy and unfair to comment on what GE should have done. Immelt’s prospects were seriously encumbered by the September 11 attacks, post-Enron accounting rules, the 2008 financial credit crisis, and a substantial recession that hit the energy industry.

The world in which Jeff Immelt had thought he would be leading GE had been turned upside down. The recession and the uncertainty that followed the terrorist attacks had dampened the global growth on which GE’s industrial businesses depended. And changes to accounting rules in the wake of the Enron scandal, by requiring that the company now account for the vast financial holdings on its balance sheet at GE Capital, had eliminated an easy and reliable source of paper profits to smooth over rough periods.

Lights Out explains how, during the last five years of his tenure, Immelt’s misfortunes piled on. GE Healthcare took a pause (it’s innovative, high-profit machines had become increasingly commoditized.) The GE Renewables business rarely turned a profit. The GE Transportation unit’s sales stagnated. GE Power built an extensive inventory hoping for a return in demand for its large, expensive machines. The merger of GE Oil and Gas with Baker Hughes turned out to be untimely too.

For many investors, GE had lost its mojo. Its lackluster performance, fuzzy financials, and unknown risk just didn’t fit with a lot of investment portfolios.

Leadership Mismanagement, Self-Dealing, Collusion

The deplorable collapse of General Electric, and GE Capital, in particular, was fostered by the board’s abysmal stewardship.

GE’s board was dysfunctional. It comprised too many directors who owed their cushy positions to Welch and Immelt and merely rubber-stamped their strategic actions. As chairman of the board, Immelt promptly cast out Welch-appointed directors who objected to his plans.

As they’d done under Welch, the board usually tended to approve Immelt’s recommendations and follow his lead. Some felt that Immelt manipulated the board, and it was whispered that members were chosen and educated to see the company through his visionary eyes. There was concern that the board didn’t entirely understand how GE worked, and that Immelt was just fine with that. Like many CEOs who are also their company’s chairman, he made sure that his board was aligned with him.

Just last week, GE agreed to a $200 million fine to settle a Securities and Exchange Commission probe into feel-good accounting at its Power and Insurance units.

Too Steeped in the GE Culture to Effect a Major Transformation

Immelt was replaced by John Flannery, a finance specialist. Flannery had run the business development team when GE Power bought Alstom. He wasn’t likely to kick off any dramatic changes in GE’s business strategy. His proposals for GE’s transformation were consistent with Immelt’s strategy.

Flannery tried to stop GE’s hemorrhaging of money but wasn’t quick enough either. He showed reluctance—caution perhaps—to take risky and complicated actions that could have been costly or even impossible to reverse.

If Immelt was known for his vaulting optimism, Flannery soon became known for his indecision and endless analysis. Few decisions, even major ones, were final. A critical strategic move, like the separation of a major division, could be made, only to be reassessed at any time. Flannery’s style was quickly grating on top executives who worked with him.

The board got insecure quickly because of widespread public criticism that it had waited too long to remove Immelt. “After sixteen years of Immelt, Flannery thought that he had more time to turn the ship around, but when he looked for support from the board, there was none there.” Fourteen months into his term, Flannery was forced out.

For the first time in its 126-year history, GE, which prided itself as a talent factory, handed the leadership baton to an “outsider” to bring a fresh perspective.

New CEO Lawrence “Larry” Culp is generally admired for his stellar record of accomplishment at Danaher, a smaller industrial conglomerate. “Culp had more experience, and he also had no emotional attachment to GE.” Culp had joined GE’s board six months before and had started questioning the wisdom he’d received from Flannery and his team.

Having an outsider take charge of a storied company marks how much change the board desired. GE may not reclaim its once-celebrated footprint. But it’ll continue to be one of the great American business stories.

Jack Welch’s GE: Everything Worked Until It Didn’t

Recommendation: Must-Read Thomas Gryta and Ted Mann’s excellent Lights Out: Pride, Delusion, and the Fall of General Electric. It’s a great reminder that even America’s most iconic companies—and the world’s leading businesses—can go off the rails if things go wrong.

It wasn’t Immelt’s fault that the entire oil sector had turned south. But he was responsible for GE investors being so openly exposed to the collapse. … He had spent sixteen years at the top and, regardless of what Welch had left for him; he’d had plenty of time to fix it.

Lights Out is a revealing, reasonable, and accessible narrative of how a thriving company was humbled by sheer misfortune and poor leadership.

Jack Welch’s razzle-dazzle capitalism party could last only so long.

The Political Genius of Abraham Lincoln // Book Summary of ‘Team of Rivals’

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Abraham Lincoln is one of history’s most admired leaders. There’s no better rendering of his leadership approach than historian Doris Kearns Goodwin’s fascinating Team of Rivals: The Political Genius of Abraham Lincoln (2005.)

In this Pulitzer Prize-winning work, Goodwin chronicles Lincoln’s early life and his surprising rise to the top of the political world. However, Goodwin’s focus is on Lincoln’s presidency.

President Barack Obama, who never shies away from comparisons to Lincoln, was so impressed with the book that he famously created his own “team of rivals”—a cabinet with Joe Biden, Hillary Clinton, and Tom Vilsack.

Lincoln was a genius for putting his political foes in his cabinet

After Lincoln was elected president in 1860, he knew that people doubted his ability. The country couldn’t be in worse straits. Nonetheless, he was determined to bring together a team of the absolute best people, lead the nation through the Civil War, and put an end to slavery.

And he did precisely that—no matter that those people held very different views or even disliked him personally. Three of Lincoln’s prominent cabinet members were better-known political foes who had campaigned against him in the 1860 election: Attorney General Edward Bates, Secretary of the Treasury Salmon P. Chase (he never stopped scheming politically against Lincoln,) and Secretary of State William H. Seward. Contrasting his three rivals, Lincoln had served only briefly in elected office—and he had steered clear of committing himself on slavery apart from asserting that America could not persist under the circumstances.

Lincoln’s political genius revealed through his extraordinary array of personal qualities that enabled him to form friendships with men who had previously opposed him; to repair injured feelings that, left untended, might have escalated into permanent hostility; to assume responsibility for the failures of subordinates; to share credit with ease; and to learn from mistakes. He possessed an acute understanding of the sources of power inherent in the presidency, an unparalleled ability to keep his governing coalition intact, a tough-minded appreciation of the need to protect his presidential prerogatives, and a masterful sense of timing.

Goodwin explains how Lincoln won people over and mobilized them in the face of their disparate abilities, personalities, and motivations. Lincoln created the micro-coalitions necessary to pursue his overall strategy.

Having risen to power with fewer privileges than any of his rivals, Lincoln was more accustomed to rely upon himself to shape events. … Seward, Chase, Bates—they were indeed strong men. But in the end, it was the prairie lawyer from Springfield who would emerge as the strongest of them all.

Conflict and inclusion of others’ perspectives can make the sum greater than the parts

Lincoln’s unusual combination of forgiving human spirit and sharp political instincts converted his enemies into (mostly) loyal friends and advisers.

Team of Rivals emphasizes Lincoln’s tactics and small, incremental decisions in aid of his larger purpose. Lincoln understood that the leader’s fundamental responsibility is to procure the support needed to unleash ideas and move them forward.

Goodwin captures Lincoln’s vulnerabilities, patience, intelligence, and fantastic will. Goodwin writes, “Good leadership requires you to surround yourself with people of diverse perspectives who can disagree with you without fear of retaliation.” A good leader takes the time to understand all sides of the issue and embrace alternative perspectives.

Lincoln’s mastery of men molded the most significant presidency in the nation’s history

To Goodwin, Lincoln was a political genius who picked the talent he needed, welcomed dissent, listened to his opponents, sought common ground, and piloted tough choices.

“Once a president gets to the White House, the only audience that is left that really matters is history.” Lincoln understood that leadership isn’t about being right, but doing the right thing. This is particularly obvious in how Goodwin describes Lincoln’s determined course of action on slavery.

Team of Rivals states that Lincoln was not an abolitionist by any means, but it’s clear that, in his heart, he was against slavery. After all, slavery was protected by the constitution. But Lincoln gained a better understanding and insight as the years went by. “Life was to him a school.”

Lincoln agreed with the abolitionists that slavery was “a moral, a social and a political wrong,” his plan to free the slaves divided his cabinet. He had always made it clear that preserving the Union trumped all other goals. He became increasingly aware of the need for the Union to embrace the end of the institution of slavery without creating further discord within his own administration and in a fractured state.

Lincoln’s political genius was not simply his ability to gather the best men of the country around him, but to impress upon them his own purpose, perception and resolution at every juncture.

For months, Lincoln let his cabinet deliberate about if—and when—slavery should be abolished. In the end, he conclusively made up his mind to issue his historic Emancipation Proclamation. He gathered his cabinet and told them that he no longer needed their inputs on the pivotal issue—but he would listen to their ideas about how best to implement his decision and its timing. When one cabinet member urged Lincoln to wait for a triumph on the field to issue the proclamation, Lincoln took his counsel.

The desultory talk abruptly ended when Lincoln took the floor and announced he had called them together in order to read the preliminary draft of an emancipation proclamation. He understood the ‘differences in the Cabinet on the slavery question’ and welcomed their suggestions after they heard what he had to say; but he wanted them to know that he ‘had resolved upon this step, and had not called them together to ask their advice.’ … His draft proclamation set January 1, 1863, little more than five months away, as the date on which all slaves within states still in rebellion against the Union would be declared free, ‘thenceforward, and forever.’ … The proclamation was shocking in scope. In a single stroke, it superseded legislation on slavery and property rights that had guided policy in eleven states for nearly three quarters of a century. … The cabinet listened in silence … The members were startled by the boldness of Lincoln’s proclamation.

‘Team of Rivals’ is one of the great leadership books

Goodwin’s chunky (750+ pages plus references) book is a serious commitment. The first third of the book is bogged down by particulars of the lives of Lincoln and his three “rivals” in local and regional politics. But these sections are worth plodding through because the backstories paint a richer picture of the personalities, their intentions and motivations, and how they evolved over time.

All four studied law, became distinguished orators, entered politics, and opposed the spread of slavery. Their upward climb was one followed by many thousands who left the small towns of their birth to seek opportunity and the adventure in the rapidly growing cities of a dynamic, expanding America.

Just as a hologram is created through the interference of light from separate sources, so the lives and impressions of those who companioned Lincoln give us a clearer and more dimensional picture of the president himself. Lincoln’s barren childhood, his lack of schooling, his relationships with male friends, his complicated marriage, the nature of his ambition, and his ruminations about death can be analyzed more clearly when he is placed side by side with his three contemporaries.

Russian novelist Leo Tolstoy called Lincoln, “so great he overshadows all other national heroes.” In the closing pages of Team of Rivals, Goodwin quotes Tolstoy (mentioned by Count S. Stakelberg per New York World on February 7, 1909):

Lincoln’s supremacy expresses itself altogether in his peculiar moral power and in the greatness of his character. … We are still too near to his greatness, but after a few centuries more our posterity will find him considerably bigger than we do. His genius is still too strong and too powerful for the common understanding, just as the sun is too hot when its light beams directly on us.

Recommendation: ‘Team of Rivals’ is a Necessary Read

Goodwin’s Team of Rivals: The Political Genius of Abraham Lincoln (2005) is a fascinating account of how President Abraham Lincoln held the Union together through the civil war, partially by bringing his political rivals into his cabinet and persuading them to work together. Particularly poignant is Goodwin’s characterization of Lincoln as the stoic head of a family afflicted by death and depression.

What makes Team of Rivals such a rich experience is Goodwin’s powerful lessons on bridging differences of opinion and using diverse perspectives to lead more effectively. These themes on leadership are very relevant outside the historical context.

Complement with Steven Spielberg’s remarkable Lincoln (2012,) which was inspired by Team of Rivals. Actor Daniel Day-Lewis won his third Best Actor Oscar for his masterful portrayal of Lincoln.

Moderate Politics is the Most Sensible Way Forward

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A sharp observation on political extremism in this 1987 TV ad by comedian John Cleese for the Social Democratic Party-Liberal Party Alliance (1981–88) in the United Kingdom:

Extremism has its advantages … the biggest advantage of extremism is that it makes you feel good because it provides you with enemies. The great thing about having enemies is that you can pretend that all the badness in the whole world is in your enemies, and all the goodness in the whole world is in you. If you have a lot of anger and resentment in you anyway, and you, therefore, enjoy abusing people, then you can pretend that you’re only doing it because these enemies of yours are such very bad persons and that if it wasn’t for them, you’d actually be good-natured and courteous and rational all the time.

I don’t belong to a political party, and I don’t think I’ll ever join one. Partisan talking points irritate me no end. I’ll watch the upcoming debates, though, because I’ll find all the onstage mudslinging and the impulsive provocations very entertaining.

In politics, everyone tries to push emotional buttons. Few seem to talk about an evidence-based attitude for making decisions and allocating society’s resources where they’ll make the most impact.

Besides, the media today have made the exchange of ideas particularly charged and increasingly polarized. The only way to be heeded to in a screaming vortex is to scream louder and resort to premeditated ad hominum.

Idea for Impact: Wisdom doesn’t reside solely on one side of the center. I am partial to those moderates whose political stance often varies with the issue. Contrary to popular perception, they aren’t tuned-out or ill-informed. Instead, they’re disposed to see both sides of the complex problems, disregard the left and the right’s excessively ideological positions, and seek the middle ground.

How to Manage Overqualified Employees

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Some employees are overeducated and overqualified—or think they are—for the jobs they are doing.

Such employees will find their roles not demanding enough to keep them occupied. They may not feel fully engaged in those tasks and responsibilities that they judge “beneath” them.

Toffee-nosed employees can create team tension. They can develop negative attitudes, such as a sense of entitlement about their skills (remember the FedEx “Even an MBA Can Do It” advert?) or resentment through boredom. That frustration and disillusion can ripple out and bring everyone else in the team down.

Here are two guidelines for managing overqualified employees:

  1. To keep overqualified employees engaged, allow more autonomy, and assign them more creative assignments. Delegate longer-term projects or have them collaborate with other teams within the company. Though, be mindful that this may create even more resentment in the team towards the perceived overqualified employees. Discuss with the team why some people have been chosen for those special assignments.
  2. Work together with the human resources staff and help the overqualified employees chart out individualized paths for climbing the corporate ladder and reach their potential. Find ways to help them acquire new skills and get exposure to other parts of the organization. Coach them to apply for roles that possibly do not yet warrant their experience and expertise. Expand their leadership capacity by assigning training and mentoring responsibilities.

Idea for Impact: Nurturing and keeping overqualified employees can create a strong foundation for tomorrow’s management team.

How Can You Contribute?

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The celebrated management guru Peter Drucker urged folks to replace the pursuit of success with the pursuit of contribution. To him, the existential question was not, “How can I achieve what’s been asked of me?” but “What can I contribute?”

Drucker wrote in his bestselling The Effective Executive (1967; my summary,)

The great majority of executives tend to focus downward. They are occupied with efforts rather than with results. They worry over what the organization and their superiors “owe” them and should do for them. And they are conscious above all of the authority they “should have.” As a result, they render themselves ineffectual. The effective executive focuses on contribution. He looks up from his work and outward toward goals. He asks: “What can I contribute that will significantly affect the performance and the results of the institution I serve?” His stress is on responsibility.

The focus on contribution is the key to effectiveness: in a person’s own work—its content, its level, its standards, and its impacts; in his relations with others—his superiors, his associates, his subordinates; in his use of the tools of the executive such as meetings or reports. The focus on contribution turns the executive’s attention away from his own specialty, his own narrow skills, his own department, and toward the performance of the whole. It turns his attention to the outside, the only place where there are results.

Peter Drucker: Focus on Contribution - How Can You Contribute? Pursuing contribution versus—or as well as—success pivots you away from self-focus and helps engage in meaningful relationships with your employees, peers, and managers.

In his celebrated article on “Managing Oneself” in the January 2005 issue of Harvard Business Review, Drucker clarified,

Throughout history, the great majority of people never had to ask the question, What should I contribute? They were told what to contribute, and their tasks were dictated either by the work itself—as it was for the peasant or artisan—or by a master or a mistress—as it was for domestic servants.

There is no return to the old answer of doing what you are told or assigned to do. Knowledge workers in particular have to learn to ask a question that has not been asked before: What should my contribution be? To answer it, they must address three distinct elements: What does the situation require? Given my strengths, my way of performing, and my values, how can I make the greatest contribution to what needs to be done? And finally, What results have to be achieved to make a difference?

Idea for Impact: Take Responsibility for Your Contribution

Focusing on contribution instead of efforts is empowering because it compels you to think through the results you need to deliver to make a difference and identify new skills to develop. “People in general, and knowledge workers in particular, grow according to the demands they make on themselves,” as Drucker remarked in The Effective Executive.

Leo Burnett on Meaning and Purpose

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Adman Leo Burnett (1892–1971) founded a global advertising agency that ranks among the titans of the trade. Burnett and the company that bears his name produced such famous brand icons as the Marlboro Man, Tony the Tiger, Jolly Green Giant, Maytag Repairman, and Pillsbury Doughboy.

Burnett pioneered the ‘Chicago School’ of advertising, wherein product campaigns centered on the inherent appeal of products themselves. Burnett’s advertisements used meaningful visuals to evoke emotions and experiences. This approach contrasted the time-honored use of catchy catchphrases and clever copy describing the products’ features. The models in Burnett’s campaigns resembled ordinary people rather than celebrities.

“When to Take My Name Off the Door”

After 33 years at the helm of his company, Burnett officially retired at age 76. He delivered a remarkable valedictory (film clip,) reminding his colleagues of his advertising agency’s core values and its high creative standards.

Let me tell you when I might demand that you take my name off the door.

When you lose your itch to do the job well for its own sake—regardless of the client, or the money, or the effort it takes.

When you lose your passion for thoroughness…your hatred of loose ends.

When you stop reaching for the manner, the overtones, the marriage of words and pictures that produces the fresh, the memorable, and the believable effect.

When you stop rededicating yourselves every day to the idea that better advertising is what the Leo Burnett Company is all about.

When you begin to compromise your integrity—which has always been the heart’s blood—the very guts of this agency.

When you stoop to convenient expediency and rationalize yourselves into acts of opportunism—for the sake of a fast buck.

When your main interest becomes a matter of size just to be big—rather than good, hard, wonderful work.

When you lose your humility and become big-shot weisenheimers … a little too big for your boots.

When you start giving lip service to this being a “creative agency” and stop really being one.

Finally, when you lose your respect for the lonely man—the man at his typewriter or his drawing board or behind his camera or just scribbling notes with one of our big black pencils—or working all night on a media plan. When you forget that the lonely man—and thank God for him—has made the agency we now have—possible. When you forget he’s the man who, because he is reaching harder, sometimes actually gets hold of—for a moment—one of those hot, unreachable stars.

THAT, boys and girls, is when I shall insist you take my name off the door.

Idea for Impact: Leaders are Meaning-Makers

Burnett’s valedictory is a potent reminder of the power of meaningful organizational values and a leader’s role in upholding his company’s principles-based DNA.

Organizational values are at the heart of the long-term success of a company. When these values grow fainter, the company may no longer reflect the intended culture. The organizational values will no longer clarify, inspire, and bind the company’s customers, employees, partners, investors, and other stakeholders.

As the steward of a company’s culture, a leader is responsible for institutionalizing—not merely individualizing—a sense and meaning in the workplace. And, as Burnett demonstrates, an effective leader passionately expresses what the company stands for and shares personal lessons learned in that process.

Burnett’s name is still on the door.

Everything in Life is Perception

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When J. K. Rowling wrote the novel The Cuckoo’s Calling (2013) and published iu under the pseudonym Robert Galbraith, she sold less than 1,500 copies in print in three months. When word got out that J. K. Rowling had written the book, The Cuckoo’s Calling immediately jumped to the top of the best-seller lists. In just a few months, the book had sold 1.1 million copies.

When the internationally-acclaimed violinist Joshua Bell played his famous 300-year-old, $3.5 million Stradivarius violin at a Washington, D.C. metro station in 2007, only seven out of the 1,097 people who walked past him during his 45-minute performance stopped to listen. Dressed in street clothes, Bell made just $32.17 in tips tossed into the open violin case at his feet—plus $20 from one person who actually recognized him. People otherwise pay hundreds of dollars to hear him perform at fancy concert halls around the world.

The Yale psychologist Paul Bloom, author of How Pleasure Works (2010,) has described,

When we get pleasure from something, it’s not merely based on what we see or what we hear or what we feel. Rather, it’s based on what we believe that thing to be.

And so, someone listening to the music of Joshua Bell is going to hear it differently and like it more if they believe it’s from Joshua Bell. If you hear the same music and think it’s from some scruffy, anonymous street performer, it doesn’t sound so good.

And I think that’s a more general fact about pleasure. I think wine doesn’t taste as good if you don’t know it’s expensive or special wine. A painting is going to look different to you, and you’re going to value it differently, depending on who you think created it.

Bloom has explained how our minds shape the way a thing will be—because we behave in proportion to our expectations:

We don’t just respond to things as we see, feel, or hear them. Rather, our response is conditioned by our beliefs of where things come from, what they’re made of, or what their hidden nature is. This is true, not just for how we think about things, but how we react to things.

Idea for Impact: Perception is Reality

Expectations color people’s perceptions, and satisfaction with any experience depends on their perceptions going into it.

What you make others think you’re offering them—your skills, your services, your products—profoundly affects their experience. The right expectations can alter anything from valueless to priceless.

However, as Dr. Johnson has warned, “we ought not to raise expectations which it is not in our power to satisfy.—It is more pleasing to see smoke brightening into flame, than flame sinking into smoke.”

Make ‘Em Thirsty

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Sony’s Akio Morita, like Apple’s Steve Jobs, was a marketing genius. Morita’s hit parade included such iconic products as the first hand-held transistor radio and the Walkman portable audio cassette player.

Key to Morita’s success was his mastery of the art of the pitch. Morita pushed Sony to create consumer electronics for which no obvious need existed and then generated demand for them.

The best marketing minds know how to create a customer—previously unaware of a problem or an opportunity, she becomes interested in considering the opportunity, and finally acts upon it.

Coca-Cola marketers are but creating a thirst by showing the fizzle a freshly poured glass in Coke ads. “Thirst asks nothing more,” indeed.

The marketing guru Seth Godin has said, “So many people are unhappy … what they have doesn’t make them unhappy. What they want does. And want is created by the marketers.” Recall the old parable,

A sales trainee was trying to explain his failure to close a single deal in his first week. “You know,” he said to his manager, “you can lead a horse to water, but you can’t make him drink.”

“Make him drink?” The manager sputtered. “Your job is to make him thirsty.”

Idea for Impact: Whether you realize this or not, you’re in marketing, as is everybody else. You’re constantly pitching your ideas, skills, time, appeal, charm, and so forth. Study the art of the pitch. Master the art of generating demand for whatever it is you have to offer. Learn to “make ’em thirsty.” Marketing is everything.

The Poolguard Effect: A Little Power, A Big Ego!

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Even Petty Power Corrupts: Authority Can Warp Behavior

The Poolguard Effect: A Little Power, A Big Ego! Ever wonder why some folks with a little authority, but not much real status, tend to throw their weight around? They often become overconfident, controlling, and bossy. This phenomenon, known as “hubris syndrome,” can lead to micromanaging, unnecessary rules, and a real disconnect from the people around them.

Even in lower-level jobs, you can see these power trips in action. For instance, rub a TSA agent the wrong way, and you might get flagged for extra screening. Summer pool guards can be overly strict with kids and parents who don’t show them the proper respect. In bureaucratic offices, clerks and supervisors frequently impose petty rules just to flex their authority.

These power trippers rely on control to boost their fragile egos. Power tends to amplify self-importance, making people more likely to act in a domineering way—something we often sum up with, “power corrupts” or the “authority bias.

Power Increases People’s Sense of Entitlement

This anecdotal observation is backed by a study titled “The Destructive Nature of Power Without Status.” The researchers argue that neither power nor low status alone leads people to mistreat others; it’s the combination of the two that increases the likelihood of abuse.

We predicted that when people have a role that gives them power but lacks status—and the respect that comes with that status—then it can lead to demeaning behaviors. Put simply, it feels bad to be in a low-status position and the power that goes with that role gives them a way to take action on those negative feelings.

One way to prevent these toxic power dynamics is to ensure that everyone feels respected and valued, regardless of their role. According to the study, “respect assuages negative feelings about low-status roles and encourages positive interactions with others.” In other words, courtesy pays off!

Notes

  • Some people despise anyone they suspect is trying to pull the strings or exert power over them.
  • Consider the 1971 Stanford Prison Experiment, where a group of students was assigned roles as either prisoners or guards in a simulated prison. Despite knowing they were part of an experiment, the “guards” subjected the “prisoners” to humiliating treatment. According to the researchers, this behavior stemmed from the guards’ desire for respect and admiration, which they felt was lacking in their interactions with others. This controversial experiment was later depicted in a 2015 docudrama.
  • This concept can be compared to the Napoleon Complex, where shorter men may overcompensate for their height through social aggressiveness, despite the fact that Napoleon himself was not actually short.
  • Cf. The “Waiter Rule” states that how you treat seemingly insignificant people says a lot about your personality and priorities.