Andrew B. Clancy
One of the most common pieces of advice in any guide to leadership is to lead by example. While this is the prevailing logic, author and organizational psychologist Tim Irwin believes up-and-coming leaders can learn just as much from executives whose behavior left much to be desired. His latest book, “Derailed: Five Lessons Learned from Catastrophic Failures of Leadership,” profiles six notable executives whose failures with their respective companies made headlines. One of the most compelling aspects of the book is that these leaders were not incompetent; they actually possessed many of the skills it takes to succeed in business. In this interview, Irwin discusses why character is at the heart of great leadership and why his book is as much about the reader as it is about the executives in the tale.When you set out to write ‘Derailed,’ was it obvious which leaders you wanted to profile?
I wanted to select a group of people that were fired ultimately for reasons of character. I don’t mean character in the narrow sense of the word, like they defrauded the company and went to jail. Rather, I mean character in the broader sense of how we treat people and so on. The six CEOs that I profiled met those criteria. None of the people that I profiled went to jail or were dishonest in the legal sense.
These are great individuals, highly competent, strategic [and] tough-minded. But they made some really fundamental errors. Interestingly enough, these are also the character issues that can derail us. What I state in the book is that the book is not about these six CEOs. It’s about ourselves.One of the CEOs profiled in the book is former Hewlett-Packard executive Carly Fiorina. Where did she go wrong at HP?
When a leader is brought in to demonstrate change, he or she has to show respect for the organization’s existing culture. [HP] was an engineering culture and she didn’t make allies from that side of the business. She was very focused on marketing and creating a high-profile sense of what HP could become. The board was sending a lot of signals to her about not appreciating HP’s culture and the need for her to get some strong operational help. [It was] advice that she chose to ignore. I think that was the final straw for the HP board.Robert Nardelli’s story is particularly glaring. What can leaders learn from his tenure at Home Depot?
Look at the contrast between Home Depot’s founders [Arthur] Blank and [Bernie] Marcus versus Bob Nardelli. Bernie Marcus displayed this fondness for the culture of Home Depot and was firmly involved in creating it. When Nardelli came in, he had a nine-car personal parking garage down in the basement of Home Depot’s corporate headquarters. He commandeered an elevator that went straight from his private parking space up to his private office on the top floor of the building without stopping on any other floor. Over time, that elevator became this glaring symbol. It was a picture of his alienation and his dismissive attitude toward people at Home Depot. Nardelli lost the confidence of the very people he needed to fulfill his vision for the company.You recommend that leaders work on developing a warning system. What’s a good method for recognizing the signs of derailment?
A common denominator in many CEOs is that they lack self-awareness. I see this over and over again. They either don’t care or they’re not aware. When people are losing control, they need to pay attention to their own inner state, but they also need to pay attention to feedback from others. A lot of these derailed individuals become what I call ‘truth starved.’ They cut themselves off from feedback from others. They don’t welcome feedback. One of the things I think a leader has to do is be open to feedback from others. It doesn’t mean that he or she has to always heed that feedback but he or she should be open to it.
Authors Chris Brogan and Julien Smith were early adopters of social media. The pair has roots in the online world that date back to the days of bulletin board systems in the early 1990s. In their recent book, “Trust Agents: Using the Web to Build Influence, Improve Reputation and Earn Trust,” Brogan and Smith provide a captivating look at one of the Web’s greatest paradoxes. Online customers are the most accessible, yet they’re also the most distrustful of a company’s message. Breaking down that barrier of cynicism takes a lot of time and a lot of effort, but the rewards of doing so can be great. In this interview with Smart Business, Brogan discusses the importance of making your company’s online interactions a little more human.A lot of executives want a quick payoff when it comes to social media. Why is having an informed strategy so important?
What we’re finding is that the education has to go on first by understanding that technology is a two-way street. These tools really aren’t as much a new way to communicate a message as they are a new way to listen and then build a conversation and build some rapport. The first step in any of these new social media platforms is to learn how to listen and to understand who’s there that represents your organization, then learn who’s there that represents your would-be buyer and finally understand what these people are looking for in terms of interaction. Only then can you start working on a way to deliver that interaction in a way that’s beneficial to the audience that’s there.You’ve maintained that social media is just a set of tools and that the real challenge is being human. What makes an online citizen a good human?
We think it deals with understanding the needs and interests of the other person first before you ask them for anything. We think the tools aren’t exactly the tricky part. We think it’s the shift in understanding [the process of] going from simply selling to customers to creating relationships that yield something. We buy from people we like, and that seems to be the opportunity with these kinds of tools. We can build relationships with our buyers. This isn’t a lot of soft-shoe stuff. This is companies like Jet Blue, Comcast, Home Depot and Disney. There are all kinds of major retail and B2B executives who are learning that the social media channel is not to be overlooked and learning that there’s business opportunity there.You talk in the book about becoming ‘one of us.’ How can a company do this if there is an established negative online reputation against the company?
It’s absolutely possible. I think with the situation that’s befallen Toyota recently with their recalls, there’s a huge opportunity for them to be face-to-face with the people who are Toyota drivers and explain to them how the company is going to rebuild trust. There’s a lot of opportunity to use the online channel to do that because it’s very much two-way. It’s much more scalable than phone calls and letters. You can really address and field a lot more people via the Web and more people can see the outcome of the two-way conversation if it’s done live using a social media experience.You personally contact a lot of bloggers and Twitter users. How much effort does it really take to be a trust agent?
It’s certainly not something that you can just throw an hour at every day or every other day and hope that you’re going to get something out of it. The more time we put into social networks, the more time we put into responding and being a two-way street, we’re getting a yield, we’re getting a direct response back. We say that a minimum should probably be something like two hours per day. If that sounds like a lot, bear in mind that this effort is actually yielding revenue and value. We’re putting time and money somewhere where we’re actually seeing a result.
Some authors of business-themed books thrive on giving readers a gentle push to follow through on promises. Author Keith Ferrazzi is not one of those writers. Instead, he prefers to take a two-fisted swing at a person’s ambition and deliver a no-bull, no-compromise truth punch.
The effect can leave the recipient somewhat dazed, but it’s hard not to want to shake Ferrazzi’s hand once you get up off the mat. Simply put, he commands respect.
“Who’s Got Your Back: The Breakthrough Program to Build Deep, Trusting Relationships That Create Success and Won’t Let You Fail” is an in-depth study into the key relationships that drive success. Smart Business spoke with Ferrazzi about lifeline relationships, the need to be proactive and why caring about others is a key to success.We’ve all heard the phrase ‘go it alone’ during our career. Why is this in direct contrast to what you propose as the path to success?
Relationships really are the core of your success. Your career is contingent on the success of your relationships. If your clients care about you as an individual and you care about them and you’re really working hard for each other with a sense of generosity and mutual commitment, then everyone is going to be successful. If you’re a leader, people are going to have to decide to follow you as an individual as much as they’re following your position.You discuss four mindsets that form the foundation for lifeline relationships: generosity, vulnerability, candor and accountability. Tell us about why vulnerability is so crucial to building lifeline relationships?
Inside every one of us, we’re constantly asking a question when we meet someone: ‘Are they safe?’
We’ve got to get to the stage where we make other people feel safe. We’ve got to walk around the world creating a safer environment where we’re inviting people in to have a better relationship with us. If we’re walking around pretending like everything’s perfect (and) keeping walls up around us, sometimes those walls have barbed wire around them because we’re so damned insecure. If that’s the case, we’re not going to be sending the kind of message to people that is necessary for us to have the kind of connectedness that we need to succeed. Vulnerability is a linchpin to success.You write about the need to learn to fight. What does this actually entail?
Think about how you deal with the annual review process. If you’re like (an employee in) most companies, you wait until the one time each year when the company has enough courage to tell you the truth, and guess what? What we’ve found is that they actually don’t have enough courage.
They gather information anonymously about you, and then some coward walks into the room and because of his or her conflict avoidance issues, they refuse to tell you the real truth. They water it down because they don’t really want to tell you to your face what you’re really doing that’s holding you back.
That said, they’ve already also figured out what your raise is or is not going to be (and) what your promotion ability is or isn’t. But then they don’t give you the information that you need to really get better. Well, you’re an idiot if you’re not out there actively soliciting, pleading for that kind of feedback six months in advance of your review.
If you were actually out there soliciting that information, then you would have shown up at that review and you would have been able to control how you change yourself to be ready for that review. You would have been able to improve yourself so that your performance is better, your financial rewards are better (and) your promotion ability is better.
Who’s Got Your Back: The Breakthrough Program to Build Deep, Trusting Relationships That Create Success and Won’t Let You Fail
By Keith Ferrazzi
Broadway Business ©2009, 336 pages, $25
Chris Anderson, author and editor-in-chief of WIRED magazine, wants to set the record straight. His book, “FREE: The Future of a Radical Price,” does not suggest that all manufactured goods will eventually be given away for free. The true premise of Anderson’s book is the increase in free items online due to the low cost associated with digital products. Companies can release products and services for free without fear that people will be looking for a catch or a hidden price.
Smart Business spoke with Anderson about the evolution of free, its impact on customers and why companies cannot avoid competing with it.
In discussing the psychology of “FREE,” you wrote, “A free bagel is probably stale, but free ketchup in a restaurant is fine.” Is there a way for companies to positively transition a pay product to free?
Take something like The Village Voice newspaper. It was once a paid weekly, then went free. People said, ‘That’s when the Voice stopped being good when it went free.’ That’s actually very arguable, and you could say that the Voice went free to save itself rather than continue its decline in the old model. People do have a tendency to take things that were once pay and are now free and assume that there’s been a quality decline. The best way to make a product free is to invent a new product that doesn’t carry with it the baggage of the pricing expectation of the old product.
If you look at companies that have introduced free, such as airlines, you have companies like RyanAir and EasyJet and others that have brought out flights that are close to free. The way they’ve done it is by redefining the business they’re in. They’re not in the airline business. They’re in this broad suite of travel, whether they’re doing hotels and rental cars and getting a subsidy from the destination or they charge a lot for baggage so they’re actually in the cargo business. They just broadly redefined the business they’re in so they could make one thing free that others were charging for while making money from other things.
You point out that, sooner or later, every company will compete with free. How do you explain that to people who have yet to be affected by free?
This has to do with the fundamental economic principles of atoms and bits. Once upon a time, my tax accountant, my stockbroker and my travel agent were people. Now, they’re software, and they’re free. As things become software, they tend to become free, not that they’re entirely free.
When I said that every business is going to be competing with free, what I meant was that every business has a digital aspect and every business has the potential to turn certain aspects into digital. And if you don’t do it, somebody else will. You’re either going to use free [products or services] to market a paid product or you’re going to compete with someone who’s doing that.
Was this part of what led to the decision to make segments of your book available at no charge?
We wanted to walk the talk. We made the whole book available for no charge in different time windows. The idea was to use the bits to get the broadest sampling and awareness so people could get a sense of what I was saying but still continue with a premium version. The hardcover is the premium version of the book. In the first six weeks of the book’s release, it was downloaded more than 500,000 times in various forms and it also became a New York Times best-seller in its physical form. The use of free to market an idea, then have an upgrade to a premium format that’s paid, is something that not only can be applied to any business, but we attempted to apply to our own.
By Chris Anderson
Hyperion ©2009, 274 pages, $26.99
Special audio conference offer
Chris Anderson will be appearing on the next edition of Soundview Live, a free interactive Web event exclusively for subscribers of Soundview Executive Book Summaries. The event will take place on Jan. 13, 2010. For more information, visit www.summary.com/Soundview-Live.