Leader's Edge Column

Ten Tips for Leaders

Whether you're running a department or a multinational corporation, the same rules should determine how you treat employees and customers.
By Don MacRae

"You have to think about that company as being a big house. The house has several floors. Think of each floor as a layer of management. Then there are interior walls. Think of them as separating different divisions of the company. Then you get a hand grenade. Then you pull the pin. And then, you roll the sucker right through the front door of the house and blow up every floor and every wall. And now you are ready to do something with that company." That's what Jack Welch, chairman and CEO of General Electric, once advised a group of Yale MBA students to do if they ever wind up running a business.

It's easy to blow a company to smithereens, but do you have what it takes to put it back together? I've been reading quite a few books lately about corporate leadership, from Thomas Neff and James Citrin's Lessons from the Top to Jeffrey Garten's The Mind of the CEO . It seems to me that today's prime-time leader needs a top-10 list that clearly lays out his or her priorities. Whether you're running a department, a large corporate division, or a multinational with a market cap that bests the GDP of a few small countries, the leadership principles that guide your decisions are much the same. So with apologies to David Letterman, here is my top 10 to-do list:

1. Give direction. Stand in front of the mirror and say, "Here is our future" five times without stuttering. A leader's most important job at any organization is to lay out a road map to the future. If you can't provide that direction, you're a manager -- not a leader. Your vision must be real, substantive, and something people can believe in. Have the guts to make decisions while there's still risk in them.

2. Create a culture based on innovation and cooperation. Innovation is about more than designing snazzy products. It's also about improving customer experiences and services. That level of innovation thrives in an organization that's informal, flat, and blessedly free of red tape -- in other words, one that promotes an entrepreneurial spirit where people can express their views without fear of repercussion. Make your company a place where everybody wins or loses together and one in which nationality or color play no role.

3. Keep it simple and focused. Identify five key areas that need improvement in your company or division and keep at them until you get them right. Your list might include such things as cost containment, quality, or customer satisfaction. Set tough targets for each one, and hold people accountable for results. (Don't worry. The pressure will help employees grow.) Measure, monitor, and review progress on a timely basis and reward results.

4. Honor thy customer. The Internet lets your customers sound off and tell you exactly what they like or don't like about your business. Listen to them. Get out into the markets you serve, and ask your customers for feedback. Make the necessary changes to improve service or else you may find yourself with fewer customers (and eventually, out of business).

5. Hire the best. Your staff is your most important asset -- in good times and in bad. Hire ambitious people who are team-builders and good communicators, who can lead the organization in turbulent times without panicking. Once you get them in the door, keep them on their toes and involve them in an incentive program that rewards performance. They'll want more than money, though, for their hard work. They'll also expect a culture that promotes speed and risk-taking -- and that welcomes people who challenge the status quo.

6. Treat employees like customers. If you want to inspire your customers, you must first inspire your employees. Invest heavily in training and mentoring. Explain the organization's goals so that everyone has the information and motivation to contribute. Nurture and reward the top 20% of your staff who produce 80% of the results, and actively weed out the bottom 10% who give you 80% of the headaches.

7. Commit to diversity and social responsibility. Get beyond your dreaded mission statement and make these values central to how you do business. Track your success rate, for instance, when it comes to attracting -- and retaining -- a diverse group of professionals. Consider how your actions as a company affect the local community.

8. Make technology your friend. Technology can transform what your company sells, how it operates, and how it prepares for the future. Don't even try to ignore it. Use it to create new products, tap new distribution channels, and improve communication with your customers and partners.

9. Groom future leaders. Select 25 of your best people each year and put them through hell together on specific projects for four or five months. Arrange them in small teams to attack real challenges, from compensation policy to customer satisfaction. Make them work on these projects in addition to their regular jobs. Weed out the uncommitted whiners and complainers early. Then watch the leadership grow.

10. Lead by example. Keep your moral compass in your back pocket at all times and pull it out whenever you need to make a difficult decision. Make sure you also have a management team that you trust and respect. Operate on the credo: Take care of your customers and the people who take care of your customers and the growth and profit will take care of themselves.

Do all of that, and you'll have an organization that will make you proud.

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