It’s no accident that companies like
Microsoft, Starbucks and Southwest
Airlines are giants in their industries. They continue to grow because people get charged
up to work in the cultures these organizations present.
“Whenever you talk to people at companies
who are chasing some kind of industry
leader, they always think the other company
has a better strategy,” says Scott Blanchard,
executive vice president, Client Solutions,
The Ken Blanchard Companies in San Diego.
“But what these leading companies typically
have is a better run organization, and their
strategy involves people.”
Smart Business spoke with Blanchard
about the functions of strategic leadership
and operational leadership and how their
impact on employee happiness and customer loyalty cannot be ignored.
When do the two sides of leadership
emerge?
In the beginning, the founders’ visions have
to be crystal clear to form the organization.
Most of the energies have to be around strategic leadership — entrepreneuring, or inventing, the business. As a company grows and
develops and starts to create some volume,
they then need to up the focus on operational
leadership. It’s not necessary in the beginning
because it’s so small and so flat, but as the
organization grows in size and complexity,
operational leadership becomes more important. You have to be careful though that you
don’t kill the entrepreneurial spirit. Look at
Google and eBay — they’re big companies,
but growth hasn’t killed their cultures of spirit and creativity.
What variables do the two sides of leadership affect?
When we took a comprehensive look at the
research and studied how everything related,
we discovered that there were, in fact, two
kinds of leadership out there, and categories
that we originally called employee success,
customer success and organizational success
were actually much broader than we
thought. So we created new labels — buckets or catch-alls — for all kinds of different
measures of the three variables.
We found that operational leadership has a
direct, positive and/or negative effect on
hard and soft measures of employee passion or employee success. It matters to the
way people feel about the company, the way
they think about the company, and the
memories and the meaning they create
working there. It also has a very strong
impact on customer success because the
operational managers make decisions
around the products and services you offer,
and they’re the ones ultimately responsible
for the quality of the service and the customer experience. Operational leadership
has less of an effect on organizational vitality or success because that primarily comes
from your customers and employees.
What is the most important connection
between the two sides of leadership and the
variables?
The connection between employee passion
and customer devotion is two-way and is so
strong that any prudent business leader cannot ignore it. Many organizations are run as if
those dynamics don’t matter very much.
Leaders need to understand how important it
is to create the right kind of culture, hire good
managers, and provide those managers with the skills and abilities to make employees
happy, productive and loyal — instead of
seemingly doing the opposite.
It starts with strategic leadership. If there’s
not a declared value — an imperative within
the company that says we are going to be a
really healthy company — then by default,
the natural dynamics of humans in organizations emerge. I often say that the only natural
things that happen in an organization are fear,
frustration, inefficiency, friction and political
mayhem. If you want to make something
positive happen, you need a clear vision and
a plan, and you need to stick to the plan.
How do the two sides of leadership impact
each other?
They have to support each other. It’s a cascading model — the vision and direction set
at the top need to cascade down to the senior
leaders, middle managers, managers who
run the business, supervisors and down to
the people at the front lines. When those people get information, they need to share it, and
that information needs to flow back up to the
top. In companies that don’t work, there is a
block in energy, information and influence
that goes down and up. That’s where companies like Sears ran into so much trouble
because there were nearly a dozen layers between the president and the store manager.
What should CEOs ask themselves about
their organizations?
I often refer to 13 questions that CEOs
should consider. Some of the toughest questions include: Are your leaders and managers held accountable for employee
morale? Do your employees feel and know
their work is meaningful and important? Do
your employees perceive that top management believes, communicates and behaves
as if people are critically important to the
organization’s success? Answering no to
these questions may indicate your organization is out of alignment — with energies
spent on things like politics and resource
allocation instead of delivering better products and services to your customers.
SCOTT BLANCHARD is executive vice president, Client Solutions, with The Ken Blanchard Companies in San Diego. Reach him
through The Ken Blanchard Companies Web site at www.kenblanchard.com/scottblanchard.