Three Leadership Attributes Critical for Today’s Environment
Based on a study of 200 CEO candidates, three characteristics emerged as catalysts for realizing organizational performance: realistic optimism, subservience to purpose and finding order in chaos. Here’s how to develop and/or optimize these characteristics at your company.
August 24 2011 by Justin Menkes
In conducting the research for my new book Better Under Pressure, my colleagues and I gathered performance data for approximately 200 candidates being assessed for the CEO role at major U.S. corporations to identify the qualities that define leadership excellence in today’s environment of ongoing pressure. We then divided these executives into three groups, with the top-performing quartile labeled “highly successful,” the middle two quartiles characterized as “average performers,” and the bottom quartile as “highly ineffective.”
Analysis revealed three main attributes that could be consistently seen in the top performers, regardless of industry or job type. These qualities were responsible for the execution ability of today’s most effective executives — and were almost totally absent among the bottom-performing quartile.
We conducted in-depth psychological interviews with more than 60 current and retired CEOs to help clarify the role each of these factors played in their leadership. One core conclusion emerged: the best CEOs had been, and continued to be, distinguished by their ability to manifest the very best from their workforce. And the three traits, which often run counter to natural human behavior, serve as catalysts for this phenomenon.
Let’s look at how the CEOs exemplify these catalysts in action. The first catalyst, realistic optimism, represents a person’s ability to recognize risks while still remaining confident that these challenges can be overcome. Dave Dillon, CEO and chairman of The Kroger Co., described what this factor looked like amid the recurring stress of discounter pricing threats, major labor strikes, and the massive economic downturn of the late 2000s.
“It’s almost like you bifurcate your brain,” he said. “In half of my brain, I am scared every day, almost all the time, about what I see out there as threats. The economy right now, if I would let it, could have me absolutely on the edge. The other half of my brain is saying these things are just obstacles to be overcome, things to be fixed. I’ve never found a problem, really, that I thought was insurmountable. There are lots of bogeymen out there, and I think I see them for what they are: they are genuine and they have the capacity to derail a company even as big as Kroger. But I believe, and I’ve seen, that anything that is a big problem can be solved.”
Dave Dillon shows us a living example of realistic optimism at its finest — that a leader can possess a clear sense of the risks confronting a business without becoming overwhelmed by them. There is nothing more empowering for a team facing a serious threat than having a leader who helps them face the complexities of the threat as they truly exist, but who does so with an unshakable faith that the team and the company will ultimately prevail.
The second of the three catalysts that determine leaders’ capacity for realizing potential in themselves and their people is subservience to purpose. People with this trait see their professional goal as so profound in importance that their lives become measure in value by how much they contribute to furthering that goal. Their level of dedication to their work is a direct result of the remarkable importance they place on their goal, and their occupation with achieving the goal inspires the same dedication in their people.
Herb Kelleher displayed this quality as the founder and CEO of Southwest Airlines. Herb started out as an attorney, but his law partners became reluctant to give him any clients because he wouldn’t bill them. “They shouldn’t have had to pay me — they shouldn’t have had to pay anyone.” Herb recounted. He became so invested in the rightness of his clients’ positions that he felt pursuit of their interests to be a noble mission. He brought the same mentality to Southwest Airlines. “The established carriers fought to keep us from getting our first plane in the air. It took us several years, and two trips to the Supreme Court to get our first permit to fly. But I fought this case myself. To allow the high-cost carriers to successfully block a low-cost alternative was to give up on the concept of America — that competition was a good thing.” Herb spent his entire career passing that sense of a noble mission onto his people. Southwest’s baggage handlers, ticket takers and flight attendants all consistently outperform their peers at rival airlines on productivity metrics. They do so for one central reason: the belief, as Herb put it, that “it shouldn’t just be the rich who are allowed to fly.”
The third attribute of leaders who are able to realize potential is the ability to find order in chaos. In today’s global economy, the number of variables that affect a business has sharply increased. It is up to a leader to find clarity amid this seeming chaos, to cull a potentially overwhelming breadth of data into the conclusions that matter most.
An example of this practice in real life can be seen in Joe Swedish, CEO of Trinity Health Systems, who is drawn to helping turn around organizations in crisis. When he became CEO at a regional health system, Swedish faced an urgent situation. Upon his arrival, the hospital was sanctioned by the inspector general of the United States, and soon after, Medicare slapped the hospital with its 23-day notice about the hospital’s inadequate care of obstetrics patients. The hospital had 23 days to prove that it was correcting the problems, or Medicare would execute the suspension.
“When you are under a 23-day suspension notice, you’re staring at the near-death of your organization,” Swedish said. “Can you imagine if [the hospital’s certification by] Medicare is shut down? You have no business, because commercial [insurers] like Blue Cross and others condition your participation on their contracts to the Medicare certification. It’s like ripping the oxygen right out of the scuba diver. You’re done.”
Swedish’s reaction to this pressure? “What a great opportunity,” he told me. How many of us could say that, honestly? For most of us, such a crisis would be fodder for the deepest complaints, the most splitting of headaches. For Swedish, the burning platform he’d landed on meant a chance to improve everything about how the hospital worked, while providing his people a chance to come together as a group. This change in mindset is critical to great
The real-world actions of Dillon, Kelleher and Swedish offer prime examples of CEOs who have mastered the process of realizing potential within the 21st century, both in themselves and in others. The most critical responsibility leaders have is to help their people flip the switch of engagement toward realizing their potential as human beings. The three catalysts help leaders create a context for people to realize their potential. By doing so, they create a virtuous cycle that elicits people’s best selves — the selves that induce the gratification we all feel when we overcome significant challenges and realize our potential.
This is how a leader creates an organization that harnesses the utmost effort and resiliency from all employees. In today’s business environment of ever-escalating competition, this is the only kind of company that is engineered for long-term success.