An acquaintance of mine coined the title phrase for this article in a discussion we were having about creating success in wholesale distribution. At the time, I sensed that this was “consultant,” another cliché used in the field of public speaking. However, since that original perception, I have realized a deeper meaning in those words.
“It’s time to stop thinking about power and politics
and begin to apply the principle and the process”.
The principle and the process form the basis of effective leadership. Power and politics are old school and have traditionally led to ultimate failure. We have experienced many unfortunate examples of these types of failures recently, including Enron, Tyco, and WorldCom. Behind each of these failures stands a leading figure: a CEO or business leader who may have embraced power and politics over principle and process. Most of the CEOs of these failed companies were considered great leaders at one time. That is scary. Surprisingly, many of his qualities fit the definition of effective leadership. Leaders who cause this kind of destruction cannot reach the position of power they do without demonstrating admirable qualities. In general, they are very intelligent individuals. Perhaps, however, there came a time when his focus shifted more toward power and politics than principle and process.
Power and politics in the business world can lead to devastation if principles and processes are ignored. The principle is based on integrity. The process keeps execution within the realms of ethical business practices.
When a CEO begins to believe that his primary purpose in life is to instill a belief in his vision, doing everything possible to get it accepted by everyone, with a paranoid belief that those who don’t join the cause are undermining that vision, they have lost sight of the principle and the process. This practice is not only unnecessary, it is destructive. A true leader welcomes a challenge to his vision. He creates a balance, a reason to reflect on personal values, intuition, and to make sure the vision is grounded. Effective leaders do not need 100% endorsement of their vision to carry out its execution, but they cannot afford to relinquish the right and responsibility of executive staff to question and challenge that vision.
The National Association of Wholesalers (NAW), funded by its Distribution Research and Education Foundation (DREF), conducted a series of interviews with seven of the most successful CEOs known in wholesale distribution. Listening to those interviews and reviewing the transcripts is what clarified my thought process and gave real meaning to the phrase:
“It’s time to stop thinking about power and politics and start applying principles and processes.”
Leadership models and the ego factor
Effective leaders are driven by a model. A model is a tool used to predict the future outcomes of current decisions. Effective leaders build their models on the sum of their experiences, knowledge, and facts, as well as their mistakes.
An emphasis on power and politics is more likely to occur if personal goals are driven by ego rather than profit, based on principle, integrity, and ethics. Being ego driven often leads to putting personal needs before business needs.
During his interview with DREF, Steve Kaufman, former CEO of Arrow Electronics, stated that he did not invent the phrase “servant leadership” but leans heavily towards that methodology.
“Academics tell us that the role of a leader is to serve the people who report to him. He or she is not a dictator, but his or her main role is to serve, to enable those people to achieve their goals. It’s a style that starts by asking: What do you want to achieve, instead of telling them what you want to achieve. I would say the servant leadership model is the one I like.”
Larry Spears, executive director of the Greenleaf Center for Servant Leadership, said: “We are beginning to see traditional hierarchical and autocratic modes of leadership slowly giving way to a newer model, one that attempts to simultaneously empower workers’ personal growth and improve the quality and care of our many institutions through a combination of teamwork and community, personal participation in decision-making, and ethical and caring behavior.”
Putting power and politics ahead of principles and processes creates failure. This ego-driven situation can lead to a death spiral that often leads to managing the panic response. Often a restructuring plan is adopted. However, in an ego-driven situation, this restructuring is more likely to happen from the bottom up than from the top down.
In other words, revenue-generating roles or revenue-generating individuals may be cut prematurely. These people or functions can, at a minimum, cover your variable expenses and contribute to your fixed expenses to some extent. The elimination of a revenue-producing function creates a redistribution of allocated fixed cost that may now jeopardize the profitability of some other segment or division. This can create pressure to close more branches or business segments, or to delve into other revenue-generating functions, thus creating “The Death Spiral.”
Focusing on the beginning and the process indicates that the correct approach is to view the restructuring from the top down, which includes a serious look at corporate and/or family overheads.
culture of success
Wholesale distribution organizations will increasingly be characterized by a large and incredibly complex set of independent relationships between widely diverse groups of people. To be successful, you must determine how to engage your employees, innovate, and be creative. Success depends on more than just “best practice” drivers of success. Success requires a higher level of leadership, a level that requires deep commitment. This commitment will not thrive in work environments where leaders are preoccupied with power and politics.
During his interview with DREF, Chuck Steiner, former CEO of Branch Electric, said:
“Refinements to industry practice, refinements to operation, excellence in what you do [and] continuous improvement are not words. They are a way of life. When you understand that they are a way of life, then the change you have in the way you perform is beyond comprehension because you just end up operating on a different level, and if you can find a way to capture that in the culture of your business, in the culture that emanates from your people, then as this cultural fabric changes, you have the opportunity to reach a higher level of excellence, and that’s what it’s all about in the end. Excellence generates a high level of profitability.”
Companies that put power and politics before principle and process will create a workplace culture that breeds mistrust and paranoia. Most employees dedicate a significant part of their lives to work. Many “live to work” instead of “work to live.” They need more from your work than just a paycheck. They deserve an environment that encourages initiative and allows them to use that initiative. They need leadership that understands that listening to their employees is a prerequisite for success. Executive management has responsibility for the direction and results of the organization. The key role of the executive team is to set and execute the company’s strategy. The most important determinant of long-term success is effective leadership. Effective leaders understand that communication is critical to the model for success. That concept is based on principles. Every employee must understand and support the company’s strategy. Managing for growth and success requires leadership to focus with laser light clarity on the determined activities that are going to produce the desired results. The leadership approach ensures that the process necessary to accomplish the predefined activities required for success is in place and working.
Leadership in Action
Successful leaders believe in principle and process. They take the time to listen, imagine, and investigate numerous alternatives. With the participation of others, they forge creative solutions to difficult problems. They challenge their people to stretch, go beyond their previous limits, and think outside the box. Successful leaders feed off of their employees and allow their employees to feed off of them. They give credit where credit is due. They give recognition as a means of earning respect. They believe that people can make a difference. Through these methods, they learn to create new insights and possibilities. They insist on best practices and a process that defines responsibilities, provides clarity, and accepts accountability.
Successful leadership means creating a sense of urgency, achieving a mutual commitment to action. Action steps are always clearly defined, precise, and backed by a commitment to the process necessary for their execution. Often, due to the personification of the personality and charisma of the leader himself, employees are eager to jump into action, without premeditation. A successful leader recognizes this possibility and takes steps to avoid this pitfall by teaching precision planning. They are clear and explicit. They communicate with an encouraging clarity that demands ownership by all involved in the commitments made.
Randy Larrimore, former CEO of the United Stationers, stated in his DREF interview,
“I think you have to realize that the leader or the president or the CEO puts on their pants just like you do in the morning and makes mistakes. The trick is to make fewer mistakes than the next. I think sometimes it’s easier apply the knowledge you have acquired [from] elsewhere to an industry that hasn’t done some of those things. You can almost become a bit more of a hero by transferring lessons learned than by trying to invent new lessons.”
The successful leader constantly builds advantages in his organization. The belief is that you don’t always have to be better than your competition, but you have to be different. This concept demands creativity and innovation. However, this creativity and innovation must be incorporated into the plans and the process that supports it. It should be distinctive, but it should be manageable and predictable. This could involve anything from new technology to market segmentation and new channel development. It’s about improving and finding new and better ways of doing things. It involves the integration of cross-activities of processes and people. Activities must be linked throughout the entire value chain. Understanding this concept is critical to leadership success. Yes, as I have come to believe, it is essential that leadership understand:
“It’s not about power and politics, it’s about principles and process.”