
September 15, 1998
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For this reporter, the September 15 session by Noel Tichy flew by faster than any session in recent memory. Suddenly, it was over. Why did the time go so quickly? First of all, the sense of speed is a compliment to Tichy. He is not an elegant speaker like, say, next October's scheduled speaker, Gary Hamel. His talk doesn't center around a single brilliant insight, like James Moore (March, 1998) or Hirotaka Takeushi (June 1996). Nor is he a purely inspirational speaker like Rabbi Harold Kushner (December 1997). What Tichy does is combine all of these virtues into his talk. He's a brilliant academic ... who happens to have had a hand in the most ballyhooed hands-on management revolution in our time (Jack Welch's workout and subsequent upheavals at GE) ... who also happens to be an affecting speaker connecting to our deepest values. It's quite a combination, and it makes Tichy enormously credible. For more of his hard-won insights into the art and craft of leadership, read on.
THREE STORIES Tichy says that business is best understood not by Powerpoint slides but by stories. Great leaders master the art of understanding, telling, and reshaping three important stories:
Roger Enrico's Guidelines Roger Enrico, CEO of Pepsico, says six conditions must be in place to develop leaders:
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What lies at the heart of leadership? A human heart, says Noel Tichy. Authentic leadership occurs when people within an organization see the story of the leader, and the story of the organization, and their own stories converge into a single story. When leaders know who they are, they are able to articulate visions in a believable way. This doesn't mean a leader has to be likeable. Tichy notes that opinions on him range from "Jack Welch is the greatest CEO GE ever had," to "Jack Welch is an asshole." The two views are eminently compatible. Leadership requires being an asshole sometimes, Tichy said. All the great ones, including Martin Luther King, Jr. and Gandhi, could be assholes at the drop of a hat. Popularity and leadership may occasionally crisscross; authenticity and leadership must roll on the same track. The foremost role of a leader is therefore to be a teacher. And the mark of a great teacher is having a "teachable point of view."
There are three components to this teachable point of view: ideas, values, and a category Tichy calls E3 -- for emotional energy and "edge." u Leadership isn't an unmeasurable concept. You can gauge the success of a leader by the market capitalization of the company he or she leads. John Akers, who was thought of as a fine leader during his reign at IBM, presided over a decline in market cap from $98 billion to $38 billion.
Fortunes faded at IBM, as they did at other "dinosaur" companies -- Sears, General Motors, Kodak, and Digital. Why? Because these organizations lacked the ability to generate leadership that could identify problems, communicate the reality to constituents, and formulate a plan to reverse their fortunes that workers and investors believed. This is why GE, which by all logic should have been a fading dinosaur, instead thrived and grew. Unlike the imperial Akers, a lifelong IBMer who believed that success was inevitable because the company was just so darn smart, Welch had an entrepreneurial, underdog's cast of mind. He lived in the real world, he knew who he was, and he was able to communicate ideas in simple, engaging ways. IDEAS Winning organizations are built on clear ideas. Leaders make sure they ideas are current and appropriate. Ideas are the framework for action at all levels.
Tichy told real-life stories of organizations that define leadership and courageous change. A favorite of his is Focus: HOPE , a Detroit nonprofit formed by a white Catholic priest and a white housewife in the wake of the terrible riots of 1966. He told about Bob Knowling, an inner city boy who had 13 brothers and sisters, who learned the hard way, from a beating in the school principal's office, that being black meant he would always have to prove himself -- and he did, going on to a sensational career as an executive with Ameritech, USWest, and now as CEO of his own high-tech startup. Tichy told of his own entrepreneurial origins, as the child owner of a poultry business. Lesson: don't slaughter your chickens until you have customers. Lessons can happen anywhere. An assignment to a hospital in Appalachia was supposed to be a back burner. But it became the experience of a lifetime when the coal miners' union shut down all its hospitals, and Noel Tichy reached inside himself to respond to the crisis. Your story is something no one can give you, and no one can say but you. Jack Welch has no speechwriter, and he uses no scripts, yet he has made teaching at GE's training center a paramount priority of his leadership. It is why he takes the best and brightest people in his company and makes them train everyone else. Your vision needn't be a mindbender to be a sensational success:
The autobiography theme is so important because it frees you to be yourself. Tichy recalled Pepsico's Roger Enrico's delight at being able to speak his own mind, not the received wisdom of authors and gurus. "You mean I can deep-six the academics?" he asked. Peter Drucker, the greatest of all business teachers, asks that you be a teacher, too. "Keep yourself growing and challenged and excited," he said. "Force yourself to be a teacher, to get up in front of subordinates or other group, and project that this is what you have learned." VALUES Winning organizations have strong values. Winning leaders live the values -- privately and publicly. Tichy doesn't mean Ten Commandments-type values (though they're good, too). He means the operational values that undergird a plan for success. When Compaq switches from being a "boxmaker" to a service-and-solutions company, that's a shift in values. When GE crosses over from being a slow bureaucracy to an entrepreneurial speedster, that's a shift in values. Welch at GE is adept at hammering at values -- often newish-sounding words that people did not know they were supposed to value, like EMOTIONAL ENERGY Winning leaders are high energy people. Winning leaders create energy in others. Times of transition = teachable moments. What was workout, but Jack Welch's way of signaling to his company that the old pace of doing things at GE would no longer be tolerated? A leader who does not quicken the pulse of workers is not a leader. Andy Grove of Intel does not apologize for the word paranoia. Managing fear is one way to keep a company on its toes, which is where good things happen. If you're not paranoid, he says, you may be dead.Never cry fire in a movie house that isn't on fire. But if it is on fire, start hollering. But have a plan, too, to guide people to the exits and to safety. EDGE Edge: the courage to see reality and act on it. Winning leaders never take the easy way out. Edge isn't cruel, it's honest.
Tichy thought he had the magic formula with Ideas, Values, and Emotional Energy. It was jack Welch who insisted that there was another ingredient critical to leadership success: edge, guts, the kind of unflinching, sometimes brutal honesty that is necessary to get from point to point -- the eggs you break to make an omelet. Welch himself provided a perfect example of edge: across-the-board cuts during times of cutback. Though it seems merciful to take an equal amount from every worker, it goes against everything managers must be able to do -- encourage winners and discipline losers. "Smell Like a Loser"Tichy showed a video of Richard Notebaert, CEO of Ameritech, explaining the power of one-on-one teaching. "I can watch some people light up. You start saying, 'Yeah!'"But it makes me angry when I see some people's energy going down. They're blockers. They smell like losers. I say, if you want to be on a Wheaties box, you belong in Ameritech. If you belong on a milk carton, go somewhere else."
Tying It All Together Ideas, values, emotion, and edge -- these are the ingredients winning leaders use to portray the future as an unfolding drama -- to create a teachable point of view that will lead to success. But on the other end, beware of success. Success begets the delusion that success is inevitable, and nothing in business is inevitable. Consider the beer truck test, which Tichy renamed after Fr. Cunningham of Focus: HOPE. The beer truck test is simple: If a beer truck runs over you, will your organization continue the process of change? Last year a beer truck did run over Fr. Cunningham -- a brain tumor, actually. And the city held its breath to see if the death of a charismatic and beloved leader would bring the organization to a halt. It didn't. the day of his death, the foundation made every single customer delivery. Focus: HOPE was off and running again, as fast as it could run, toward the goals Cunningham taught them for so many years.
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