Most CIOs and those aspiring to the position understand that it's not enough to be a top-notch technologist. The reality is, you have to think of yourself as a business leader first and a technologist second, for lots of reasons. But what does that really mean? And how do you develop yourself as a business leader? Bookshelves are full of advice about leadership, and while much of it is useful and insightful, it's often incomplete. I tackled the problem of understanding leadership by carefully observing many leaders in diverse industries and jobs over long periods of time as they moved through their careers. For example, I was fortunate to know and observe General Electric's Jack Welch, Boeing's Jim McNerny, and Verizon's Ivan Seidenberg before they were CEOs. I was also able to observe many other leaders of lesser fame?some who succeeded, and some who ultimately fell short. I'm not the first to make the case that leadership matters, even for CIOs?but I have my own particular perspective on the urgency of the matter. For one thing, business is far too complex for individuals, even CEOs, to make decisions based solely on the information and perspective of one particular functional silo. To stay ahead of the game, the various functional silos have to be well-coordinated, and trade-offs among them must be made both well and quickly, and with complete transparency about what's being gained and lost. Functional leaders such as CIOs have to advocate for their areas when necessary, but they also need to understand the goals, constraints, and issues of the overall business so they know how their individual area fits in. Then they can make those trade-offs routinely, as well as keep their work coordinated with the rest of the organization. Broadening your view of the business will make you a more productive member of every formal or virtual team you're on. As if the need for cross-functional collaboration weren't enough, there's another important reason to be a business leader first. Think of the people who report to you. You have to set the course for them, identify their talents, get the best out of them individually, and keep everyone energized and synchronized. And don't forget one last reason to become a better leader: to continue to grow and learn, thereby deriving greater satisfaction from your work. Who knows? You might unleash some latent leadership talent that could propel your career beyond the confines of technology. We've occasionally seen a CFO become a CEO, but making the leap from CIO to CEO is much less common. CIOs too often neglect to broaden their business-leadership skills. Don't be put off by the mystique surrounding business leadership, or by those who argue that great leaders are simply born that way. After decades of research, I've found that leadership is less mysterious than you think. Even people who are naturally endowed with self-confidence, likability, charisma, and other traits associated with business leadership need to sharpen their abilities?just as talented athletes and musicians must practice, practice, practice to hone their skills.
As I separated out the uncontrollable factors behind the failures and success, I found eight particular skills that all leaders must develop. These skills, which I call know-hows, are directly observable. Once you understand them, you're bound to see them in the leaders you admire.
More to the point, you can develop them in yourself. Use them as your personal leadership-development guide. Consider which ones you're practicing now and which ones you want to practice in the future. By consciously working to improve these skills and becoming aware of how your personality affects them, you'll be a better leader?besides being a great technologist?and you can help others develop their talent as well.
1. Positioning the business to make money. What's the difference between Wal-Mart and Target? Most people can articulate it in a simple sentence: Wal-Mart offers lots of everyday goods at very low prices in a no-frills venue, while Target offers slightly more stylish goods at slightly higher prices with a slightly more upscale shopping experience. The clear, simple, specific central idea of a business comes from its leaders. Those who are good at shaping it make it seem easy, but coming up with a clear focus for the business that's appealing to customers?not to mention profitable?is a specific skill only some leaders master. This know-how of positioning the business to make money is key to the success of any company, as it's been for Wal-Mart and Target.
With the pace of the game picking up and change becoming deeper and more frequent, business leaders must ensure that the central idea of their business continues to work in the real world of customers. At the same time, they have to track the fundamentals of money making?cash, gross margin, revenue growth, velocity, and ROI?to pick up early-warning signals that the positioning is slipping.
Too many leaders wait too long to reposition the business. Some can't figure out how to do it in a way that makes money, and they become paralyzed. How long has Microsoft waited to find a new positioning for its business? It's fair to say that Kodak waited too long. In today's supercompetitive environment, any hesitation to reposition can be devastating.
Chances are the business you work for will require repositioning four or five times in your career. Even if you aren't the one to find the central idea of the business, if you watch the money-making basics like a hawk?you don't have to be a financial analyst to track the basics?you might be the first to detect that the positioning is becoming fundamentally flawed. You might also be the one to carry a sense of urgency to your executive team?and the very person who can figure out how to create a new positioning using technology.
2. Detecting the pattern of external change. This know-how gives you the lead time to reposition the business ahead of competitors so it can continue to make money. It's what allows a leader like Seidenberg, for instance, to put Verizon on the offensive in an incredibly fast-paced and complex industry. If he waits for someone to tell him which way the industry is moving, it'll be too late. He has to figure it out for himself, taking in a dizzying array of factors and sometimes-conflicting information. Changes in consumer habits have even put Wal-Mart's long-successful central idea into question; that's the issue CEO H. Lee Scott is wrestling with now as the company experiments with new merchandising concepts.
You can learn to pick up important shifts early by broadening your lens?even if you aren't the CEO. Scan the external landscape far beyond the boundaries of your function, business, industry, economy, or country, and see what emerging trends are out there that might affect your business. Are there some that might combine and create a whole new industry or make your money-making model obsolete?
You probably already track new developments and uses of technology. Use your imagination to see how seemingly disparate trends and events might combine. Then, expand your thinking beyond the confines of technology: What else is happening among your competitors and in the business world more broadly? If there are gaps in your understanding, search for information to fill them in. Watch not only for threats, but more important, for potential opportunities?perhaps some that could be technology-driven.
Whatever your role in the business, as a leader you'll need other people to get things done and deliver results. Three distinct know-hows help you build the organization's capability and capacity: spotting and developing leadership talent, molding a team of direct reports, and managing the social system.
3. Identifying and developing up-and-comers. You know you're a good leader when your business is stronger relative to the external environment than it was when you first took charge. One way to improve upon what you inherited is to identify and develop other leaders within the organization. You have to go on the offensive to identify people's natural talents and create opportunities for up-and-coming leaders to develop and grow.
Pinpoint the absolutely essential requirements of a job for today and tomorrow?the non-negotiable criteria for succeeding in the job. Next, take the time to figure out a person's natural talents. Only then can you match the leader and the job and help the person grow.
Get comfortable making judgments on people, but don't rely on emotion. Carefully observe the pattern of each person's decisions, actions, and behaviors, but don't limit your scope to their technical knowledge; some might have the seeds of great leaders. See if you can pick them out and develop them?the sooner the better so they can get the experience they need.
4. Molding your leadership team. Building a team of leaders can be a particularly stiff challenge, but it's vitally important when people have deep but narrow expertise. After all, you want the benefit of their expertise, but people also have to work well together.
When collaboration is essential, select your direct reports with that in mind. Don't go by talents and skills alone; look at people's willingness to submerge their own self-interests for the betterment of the group. Shape and reinforce collaborative behaviors among the top group, and make sure the entire team has a common view of the project and overall business. That way, team members will understand one another's goals, priorities, and problems, and see how all those things fit together.
Many leaders deal with their direct reports one on one, but you get higher-quality decisions and better coordination when you invest the time and energy to get the players working well together. Transparency is key.
5. Managing the social system. This means shaping "operating mechanisms" that bring people together routinely whenever the situation calls for decisions and trade-offs, exchanges of information, or coordinated actions.
Identify where information and ideas must intersect, and make sure there are operating mechanisms to bring the right people together to make those exchanges happen on a regular basis. Reviews and staff meetings can serve that purpose, but simply assembling people in a room doesn't necessarily accomplish what it should. You also have to be sure that the behaviors in those operating mechanisms are appropriate, and that their output is delivering the business results they were designed to accomplish?in other words, no meetings for the sake of meeting.
Shaping behaviors and the quality of decisions in the operating mechanisms is a hands-on job for a leader. Leaders send clear signals about what behavior is appropriate through body language, comments, and coaching.
6. Setting goals. You might not think of goal-setting as a special know-how, but it is. Consider how common it is to take last year's goal and add some incremental improvement to it, completely ignoring the fact that the market for your services is drastically shrinking, or that a big market opportunity is opening up.
Looking in the rearview is a huge and frequent mistake. So is focusing on only one goal, or setting goals that conflict with one another. Aggressively growing sales while increasing cash flow, for instance, can pull in opposite directions. That's why Jeff Immelt, early in his tenure as CEO of GE, reined in earnings estimates in the short term while embarking on a strategy to grow revenue 8% per year instead of the 5% the company had been achieving. The know-how is to determine a realistic, coherent set of goals based on the opportunities that lie ahead and the organization's ability to achieve them.
7. Deciding what to do first. Priorities define the path to the goals and synchronize the moving parts of the organization. Many leaders feel overloaded and find it hard to specify what to focus on first, second, and third. It takes clear thinking?and yes, leadership know-how?to define priorities that are clear, specific, and unambiguous. And there can't be too many. If everything is important, execution suffers.
One of the challenges in setting priorities is shifting resources?people and money?accordingly. Often, that means shifting people from one project to another. It's not uncommon for technologists to spread their efforts across five or six projects, but when people are spread thin, you run the risk that the important things simply don't get done. If, on the other hand, you specify the handful of projects that are most important, shift people's attention accordingly, and let other things fall by the wayside, you have a much better chance of delivering on the things you really must. It was this know-how that drove Eric Creviston, as executive VP of the wireless-products business of RFMD in Greensboro, N.C., to make sure engineers were working on projects crucial to developing a new technology platform and not just working on projects to support existing customers.
8. Balancing competing interests. As you expand your leadership skills, consider one last know-how that's becoming increasingly important: dealing with special-interest groups. No matter how well you run a business, there's almost certainly a group that objects to something you're doing, whether it relates to your strategy, products, or employment practices.
Special interests may conflict not only with you, but also with one another. It's never too soon to start noticing these and thinking about how you might develop a methodology for sorting out the legitimate concerns so you can adapt to them.
As you practice the know-hows, you'll develop your innate leadership talent. But beware of certain personality traits that might get in the way. If, for instance, you have a need to be liked, you'll avoid giving your direct reports hard-hitting feedback when their egos are out of line, and you won't be very good at molding a team. Similarly, you'll find it hard to withdraw resources from certain people's pet projects. If you're overly optimistic, your assessments of people will be skewed, your goals will be unrealistic, you'll bite off more priorities than the organization can chew, and you'll underestimate emerging threats to the business. On the other hand, if you're psychologically open, you'll be more receptive to diverse views about the environment, the business, and people?and your know-hows will improve.
The idea is not to be a perfect person, but to be self-aware of what's blocking you from developing the know-hows fully. If you can't be objective, ask a boss or colleague for candid feedback now and then.
You can develop your know-hows, but improvement isn't automatic. It takes consistent practice, feedback, reflection on your mistakes, and a willingness to overcome psychological blockages. True leaders have the discipline and commitment to continually improve. After years of practice to develop the specific know-hows, you may indeed rightfully claim that elusive quality of great business leaders: the know-how of business leadership.
Ram Charan is a business adviser, educator, and author. His latest book, Know-How: The Eight Skills That Separate People Who Perform From Those Who Don't, is due out from Crown Business in January 2007.
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See Related Articles:
Five Essential Skills For The Future, December 2004
The Narrow Path To Leadership, August 2004