Maxwell MPA Maxwell MPA Leadership Leadership WorkshopWorkshopwith Howie with Howie PhanstielPhanstiel

June 22, 2009June 22, 2009

Introduction 9:10 – 9:20 a.m.

What is Leadership & Who Are the Great Leaders? 9:20 – 10:00 a.m.

Leading Through Diffuse Power Structures 10:00 – 10:15 a.m.

Break 10:15 – 10:20 a.m.

Leveraging Brands to Arouse Change: PacifiCare 10:20 – 11:00 a.m.And Best Friends Animal Society

Aligning Strategy, Culture and Leadership Practices 11:00 – 11:15 a.m.

Celebrating Results 11:15 – 11:30 a.m.

Lunch, Discussion & Q&A 11:30 – 1:00 p.m.

Maxwell Leadership Workshop AgendaMaxwell Leadership Workshop Agenda

My Workshop GoalsMy Workshop Goals

Share knowledge about fulcrums and Share knowledge about fulcrums and forces that impact organizational forces that impact organizational performanceperformance

Inspire you to be the best leader you Inspire you to be the best leader you can becan be

Principle of GreatnessPrinciple of Greatness

““Disciplined people who engage in Disciplined people who engage in disciplined thought and who take disciplined thought and who take

disciplined action”disciplined action”

Jim Collins, Jim Collins,

Good to Great and the Social SectorsGood to Great and the Social Sectors

What is Leadership?What is Leadership?

LEADERSHIP is the skillful use of LEADERSHIP is the skillful use of influenceinfluenceto bring about the accomplishment of goals. to bring about the accomplishment of goals.

The purpose of LEADERSHP is to produceThe purpose of LEADERSHP is to producechange. change.

The goal of LEADERSHIP is to produce The goal of LEADERSHIP is to produce successsuccess

(results that move organizations forward).(results that move organizations forward).

How?How?

Effective leaders leverage resources Effective leaders leverage resources and leadership style to produce clarity, and leadership style to produce clarity, governance, support standards and governance, support standards and coaching for those they lead. They coaching for those they lead. They profoundlyprofoundly encourageencourage success. success.

Note: In great organizations, all members lead and great leaders are also good followers.

Types of Leaders Types of Leaders

Transactional leaders work within leaders work within existing structures, cut deals and make existing structures, cut deals and make trade-offs between their followers and trade-offs between their followers and organizational needs.organizational needs.

Transformational leaders radically leaders radically transform and transform and renewrenew their followers, their followers, themselves and their organizations.themselves and their organizations.

James MacGregor James MacGregor BurnsBurns

Who are the Great Leaders? Who are the Great Leaders?

people made of the “right stuff”, Jim people made of the “right stuff”, Jim CollinsCollins

people who are the “master people who are the “master conductors”, Peter Druckerconductors”, Peter Drucker

people who are the “stars”, Jack people who are the “stars”, Jack WelchWelch

people who possess “Executive people who possess “Executive Intelligence”, Justin MenkesIntelligence”, Justin Menkes

Other Characteristics of Other Characteristics of Great LeadersGreat Leaders

““A man, to lead, must have a pot A man, to lead, must have a pot belly” belly”

– – Ancient Greek myth according to Susan Ancient Greek myth according to Susan KomizesKomizes

from Chancellor Buzz Shaw’s book on Leadershipfrom Chancellor Buzz Shaw’s book on Leadership

Are Leaders Born or Made?Are Leaders Born or Made?

Max Weber and the charismaticsMax Weber and the charismatics

Does the man make the times or the Does the man make the times or the times make the man?times make the man?

- Winston Churchill- Winston Churchill

- Mao-Tse-Tung vs. Deng - Mao-Tse-Tung vs. Deng XiaopingXiaoping

Leaders vs. ManagersLeaders vs. Managers

“Management is doing things right; leadership is doing the right things.”

- Peter Drucker

Great Leaders Make A Great Leaders Make A DifferenceDifference

““Give me a lever and a place to stand and I will Give me a lever and a place to stand and I will move the earth.”move the earth.”

- Archimedes, 3- Archimedes, 3rdrd Century BC Century BC

““Don’t be afraid to take a big step if one is Don’t be afraid to take a big step if one is indicated. You can’t cross a chasm in two indicated. You can’t cross a chasm in two small jumps.”small jumps.”

- David Lloyd George- David Lloyd George

““One man can make a difference. Every man One man can make a difference. Every man should try.”should try.”

- John F. Kennedy- John F. Kennedy

Phanstiel’s Criteria for Great Phanstiel’s Criteria for Great LeadersLeaders

Great Leaders:Great Leaders: make good decisionsmake good decisions take risktake risk lead, don’t pushlead, don’t push create zealots *create zealots * blend personal humility and professional willblend personal humility and professional will

* ”when spider webs unite they can tie up a lion”* ”when spider webs unite they can tie up a lion”- old Ethiopian - old Ethiopian

proverbproverb

Limitations on Modern Leaders: Less Limitations on Modern Leaders: Less Concentration of Pure Executive PowerConcentration of Pure Executive Power

Jim Collins: Sarbanes-Oxley, Shareholder Jim Collins: Sarbanes-Oxley, Shareholder Activism, Consumer Activism, Regulatory Activism, Consumer Activism, Regulatory Activism, Highly Mobile Knowledge WorkersActivism, Highly Mobile Knowledge Workers

Jean Lipman-Blumen: Twin tensions Jean Lipman-Blumen: Twin tensions between explosion of global between explosion of global interdependence and diversity requires interdependence and diversity requires leaders to do a better job of connecting leaders to do a better job of connecting diverse networks, institutions and diverse networks, institutions and constituencies without bowing to constituencies without bowing to authoritarianism.authoritarianism.

Leading Through Diffuse Power Leading Through Diffuse Power StructuresStructures

Leadership influence can be gained through power Leadership influence can be gained through power of:of:

languagelanguage inclusioninclusion shared interestsshared interests coalitioncoalition - Frances Hesselbein, - Frances Hesselbein,

CEO Girl Scouts of AmericaCEO Girl Scouts of America

Legislative leadership requires persuasion, Legislative leadership requires persuasion, political currency and shared interests.political currency and shared interests.

““Personal humility and professional will is a Personal humility and professional will is a key factor in creating legitimacy and key factor in creating legitimacy and influence”influence”

- Jim Collins- Jim Collins

Socialized Power vs. Socialized Power vs. Personalized PowerPersonalized Power

sPowersPower - Influence is used for the - Influence is used for the benefit of a greater good and/or towards benefit of a greater good and/or towards an achievement goal. The goal is for an achievement goal. The goal is for the direct or indirect benefit of another.the direct or indirect benefit of another.

pPowerpPower – The concern for feeling or – The concern for feeling or being perceived as strong, effective or being perceived as strong, effective or influential is frequently selfish and self-influential is frequently selfish and self-aggrandizing.aggrandizing.

RenewalRenewalTransformation from “I” to Transformation from “I” to

“We”“We” Learn that leading is not about your Learn that leading is not about your

success but rather the success that success but rather the success that you can create by empowering you can create by empowering others to lead.others to lead.

The Transformation from The Transformation from “I” to “We”“I” to “We”

Crucibles

True North by Bill George

Leveraging Brands to Arouse Leveraging Brands to Arouse ChangeChange

““Without work all life goes rotten. Without work all life goes rotten. But when work is soulless, life But when work is soulless, life stifles and dies.”stifles and dies.”

- Albert - Albert CamusCamus

Building A New BrandBuilding A New Brand““Arousing Our See”Arousing Our See”

We learned from Howard Schultz, CEO of Starbucks that brand is the sum of

everything aconsumer experiences

Authentic brands emanate from everything

the company does, from store design and

site selection to training, production,

packaging and merchandise selection.

Everything matters.

Howard Schultz, Chairman and CEO Starbucks

“ “

Building A New Brand For PacifiCareBuilding A New Brand For PacifiCare

In 2001, we surveyed:

400 consumers in CA (65% non-senior and 35% senior),

400 consumers in other PHS markets,150 consumers outside our current markets,

400 more consumers nationwide via the internet,67 providers,

101 benefit managers,124 brokers and consultants,

andconducted 31 focus groups

So what’s Important?

1. Show some concern

2. Be perceived as being trustworthy & high quality

3. Solve problems

Additional Focus Groups

“Give me some way to verify you have a pattern of concern.”

“Actions speak louder than words.”

“You have to show how you are concerned.”

“Do what you promise you would do.”

“I want to know what you’re doing for me.”

Bottom Line:

The only way consumers will believe you care,

is if you prove it.

Brand Positioning

PacifiCare believes caring is good.

Doing something is better.

Aligning Strategy,Aligning Strategy,Culture & LeadershipCulture & Leadership

PracticesPractices

Two key questions every Two key questions every leader has to ask -leader has to ask -

Is my organization smart?Is my organization smart? Is my organization healthy?Is my organization healthy?

““Smart” translates to very Smart” translates to very intelligent plans, service intelligent plans, service models, financial discipline – all models, financial discipline – all designed to yield that elusive designed to yield that elusive goal “competitive advantage” goal “competitive advantage” in the private sector and in the private sector and “credibility” in the social sector “credibility” in the social sector because of execution of the because of execution of the concepts. concepts.

In the social sectors, “Smart” In the social sectors, “Smart” translates to performance as translates to performance as defined by results and defined by results and efficiency in delivering on the efficiency in delivering on the social mission.social mission.

Most business graduate schools Most business graduate schools and executives focus solely on and executives focus solely on the “smart” piece.the “smart” piece.

This is the “This is the “hardhard” measurable ” measurable parts of the organization.parts of the organization.

““Healthy” is creating a work Healthy” is creating a work environment that stimulates environment that stimulates individuals and groups to perform individuals and groups to perform to their highest capacity and to their highest capacity and continually improves, yielding continually improves, yielding superior results and a workplace superior results and a workplace the employees would want their the employees would want their sons and daughters to work in. sons and daughters to work in.

Most behaviorists focus on the Most behaviorists focus on the “healthy” piece. This is what is “healthy” piece. This is what is seen as the “soft” issues – and seen as the “soft” issues – and is alienating to most line is alienating to most line executives. executives.

This dynamic tension results in an “either This dynamic tension results in an “either or mental” set…or mental” set…

At PacifiCare we focused both on culture At PacifiCare we focused both on culture – (the cause of health) while at the – (the cause of health) while at the same time continuing to refine the same time continuing to refine the “smarts” (strategy).“smarts” (strategy).

We sought to align strategy, culture and We sought to align strategy, culture and leadership style.leadership style.

““All the elements of a company All the elements of a company work together in concert work together in concert within the context of the within the context of the

company’s core ideology and company’s core ideology and the type of progress it aims to the type of progress it aims to

achieve.”achieve.”

Excerpted from Collins, J.C. & Porras, J.L., Built to Last: Successful Habits of Visionary Companies, New York: HarperCollins, 1994

Alignment

Strategy

Strategy = Magnetic North, Formula For Success

Strategy is the Decider!

Strategy determines the “right”improvement initiative(s)

Raising the BarRaising the Bar

19001910

19201930

19401950

19601970 1980 1990

6ft

8ft

Scissors

Western Roll

Straddle

Fosbury Flop

Collins & Porras’ FindingsCollins & Porras’ Findings Leaders concentrate on building an organization, Leaders concentrate on building an organization,

per seper se Establish a core ideology – core values and a Establish a core ideology – core values and a

clear sense of purposeclear sense of purpose Preserve their core ideology, but also continually Preserve their core ideology, but also continually

foster innovation and progressfoster innovation and progress Set big difficult goals for people to accomplishSet big difficult goals for people to accomplish Build cult-like cultures that are strong, integrated, Build cult-like cultures that are strong, integrated,

focused and consistentfocused and consistent Keep experimentingKeep experimenting Grow their managers from withinGrow their managers from within Keep trying to do things betterKeep trying to do things better

31

Cumulative Stock Returns of $1 InvestedJanuary 1, 1926 - December 31, 1990

Treacy & Wiersema Treacy & Wiersema ConnectionConnection

They researched the question:They researched the question:

Here’s what they found:Here’s what they found:> Three, fundamental ““value value disciplinesdisciplines””> Must find your ””unique valueunique value”” to deliver

Why does one group of companies achieve and sustain market

leadership while others do not?

Treacy & Wiersema Treacy & Wiersema ConnectionConnection

They discovered Three Core ““Value Value DisciplinesDisciplines””:Operational Excellence - Example: Wal-Mart

Customer Intimacy - Example: Airborne Express

Product Leadership - Example: Intel

Four Core Strategies

DependabilityEfficiency

Commodity/Commodity-likeAccuracy

PredictabilityConvenience

Close partnershipHigh customization

Total solutionHigh personalization

Co-developmentIncremental relationship

One of a kindCreate market niche

Extremely uniqueUnmatched product/service

ExcellenceConstant innovation

Fuller realization of potentialGrowth of customer

Raising of human spiritFurther realization of ideals,

values, higher order purposesTake customer to another plateau

CUSTOMER INTIMACY OPERATIONAL EXCELLENCE

DISCONTINUOUS INNOVATION PRODUCT LEADERSHIP

Social Sector Sample StrategiesSocial Sector Sample Strategiesand Value Disciplinesand Value Disciplines

Social Security AdministrationUS Army

Family ServicesMunicipal Town Meetings

Government Health SystemsAdoption Agencies

NASAUS Marine Corps

Cleveland Orchestra

World BankAID Organizations

Certain NGOsPeace Corps

COLLABORATION/SYNERGY CONTROL/CERTANITY

CULTIVATION/ENRICHMENT COMPETENCE/SUPERIORITY

Culture

The “Missing Link” between The “Missing Link” between Strategy, Leadership, and Strategy, Leadership, and bottom-line performancebottom-line performance

““The way we do things around The way we do things around here in order to succeed”here in order to succeed”

Kotter & Heskett’s ResearchKotter & Heskett’s Research

They were curious about the impact of They were curious about the impact of culture on organizational culture on organizational performanceperformance

207 firms from 22 industries207 firms from 22 industries Determined cultural strengthDetermined cultural strength Economic performance between 1977 – Economic performance between 1977 –

19881988 Interviewed 75 industry analystsInterviewed 75 industry analysts

Kotter & Heskett’s DefinitionsKotter & Heskett’s Definitions Cultural Strength = Internally ConsistentCultural Strength = Internally Consistent

• Effective cultures:

Fit the strategy

Were adaptive while still preserving core values

Balanced the needs of 3 stakeholders:> Employees

> Customers> Shareholder

Excerpted from Kotter, J.P. & Heskett, J.L Corporate Culture and Performance. New York: The Free Press. 1992

Kotter & Heskett’s Research ResultsKotter & Heskett’s Research Results

Strong & Strong &More Effective Less Effective

Expanded WorkforcesExpanded Workforces 282%282% 36% 36%

Increased RevenuesIncreased Revenues 682%682% 166% 166%

Improved Net IncomesImproved Net Incomes 756%756% 1% 1%

Grew Stock PricesGrew Stock Prices 901% 901% 74% 74%

The Power of Culture

Culture’s influence is more powerful than anything else including:

Strategy

Structure Financial analysis

Management Systems…

when it comes to impacting

Bottom Line Performance

Operational ExcellenceOperational Excellence

Product LeadershipProduct LeadershipDiscontinuous InnovationDiscontinuous Innovation

Customer IntimacyCustomer Intimacy

STRATEGY + STRATEGY + CULTURECULTURE

CultivationCultivation CompetencyCompetency

ControlControlCollaborationCollaboration

“Dream The Dream” “Beat The Plan &Win The Game”

“Dream The Team” “Plan The Work –Work The Plan”

Core Culture Principles

ControlCollaboration

CompetenceCultivation

CertaintyPredictability

StabilityOrganization per se

Grouping/TeamingHuman processIncrementalism

Community

DistinctionExcellenceExpertiseConcept

MeaningfulnessFulfillment

GrowthValues

Core Culture Strengths

ControlCollaboration

CompetenceCultivation

Teaming comes easily and naturally

Very egalitarianVery receptive to diversity

Power is based in relationships

Values are paramountBased on belief and

commitmentStrongly encourages self-

expressionPremised on good will

Very orderly and predictableDecision making is very careful

and conservativeGets and stays in control

Expectations, roles and jobs are definite

High performance standardsVery win driven

Strong achievement focusEmphasizes merit and

demonstrated performanceCentered on concepts

Four Core Leadership Practices

AuthoritativeConservative

Firm/AssertiveDefinitive

Long-range planner

Team BuilderCoach

Close partner w/customersIntegrator

Conflict ManagerEnsures utilization of diversity

Conceptual visionaryChallenger of othersSpurs competitionTough TaskmasterStretcher of people

Drives constant innovation

CultivatorCatalyst

People stewardIdealist

Commitment BuilderAppeal to higher-level vision

Participative Directive

Standard-SetterCharismatic

Organizational Structure

by Core Culture

Typ e n am e h ereTyp e tit le h ere

Typ e n am e h ereTyp e tit le h ere

Typ e n am e h ereTyp e tit le h ere

Typ e n am e h ereTyp e tit le h ere

Project A

Project B

COLLABORATION CONTROL

CULTIVATION COMPETENCE

Group; Cluster

Sphere; Web

Hierarchy

Matrix

Cultures “Out of Balance”ControlCollaboration

CompetenceCultivation

•relationships more important than performance•accountability slips•over compromising prevails•unnecessary meetings•indurduality stifled, high performers shunned•mediocrity tolerated•in-bred•cliquish•leaders/managers “laissez faire”

•intention all that matters•lack of structure, system, direction & focus•people put off by authority•people become overly moralistic, judgmental, self-expressive•excessive idealism, projects lay on the shelf or unfinished•details overlooked•necessary controls missing

•overly bureaucratic, big is better•too many organized layers•meaningless polices/procedures•training and development ignored•functional silos, turn down•bad news rises slowly•conflict suppressed•low innovation; good ideas lost•Organization becomes inwardly focused, ignores external•people treated as replacement parts•senior management distant

•excessive win-loose behavior•excessive individualism•people refuse to team•people constantly tense•leaders/managers never satisfied, distant, aloof•paralysis/analysis•arrogant behavior•levels of mistrust•organization never celebrates•people overworked, stressed out•people worried about making mistakes

Managing Complex ChangeManaging Complex Change

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Skills / Abilities

Financial Incentives

Resources Action Plan Execution+ + + + + + + = Change

Values (Lived)

Culture & Alignment

Skills / Abilities

Financial Incentives

Resources Action Plan Execution+ + + + + + = Confusion

Vision Clear & Communicated

Culture & Alignment

Skills / Abilities

Financial Incentives

Resources Action Plan Execution- + + + + + = Cynicism

Vision Clear & Communicated

Values (Lived)

Skills / Abilities

Financial Incentives

Resources Action Plan Execution+ - + + + + = Resistance

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Financial Incentives

Resources Action Plan Execution+ + - + + + = Anxiety

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Skills / Abilities

Resources Action Plan Execution+ + + - + + = Crawl

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Skills / Abilities

Financial Incentives

Action Plan Execution+ + + + - + = Frustration

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Skills / Abilities

Financial Incentives

Resources Execution+ + + + + - = False Starts

Vision Clear & Communicated

Values (Lived)

Culture & Alignment

Skills / Abilities

Financial Incentives

Resources Action Plan+ + + + + + = Failure

Components of Change Result

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© 2007 Spencer, Shenk & Capers