Exercising Leadership: Foundational Principles

Leadership. Basic Principles. Adil Alekperov... Leadership is a unique phenomenon confidently entering into our life. Leadership is taught in universities and business-schools, a great number of books and other printed matter, seminars and trainings are devoted to it. All this testifies to the fact that we want to learn as much as possible about leadership. And it is not surprising, as many companies managed to achieve quite impressive results thanks to leadership. Legendary Jack Welch, the former General Electric SEO, who enlarged its capitalization from 14 to 410 billion USD, is firmly sure that leadership was the basis of this global success. The famous scholar and management theoretician, author of numerous published works Peter Drucker is of the same opinion, having stressed that “Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership.”1 The great practizer and the outstanding scholar are united in their viewpoint and are confident that leadership can provide the unheard-of levels for business; it can help realize brave and daring objectives. No doubt, the phenomenon of leadership is worthy of most careful attention and study. In this article we will define leadership basic principles, which provide the grounds for business leaders to create and develop their companies. However, before coming to our main topic, let’s find an answer to the question ‘what is the main leader’s mission?’ This will give us the key to the very essence of leadership. And such world-famous companies as The Walt Disney Company, Amazon and Starbucks will help us find this key. Let’s recollect some facts about these companies. The Walt Disney Company was founded in Los-Angeles in 1923 by brothers Roy and Walt Disney. Currently it continues its successful development and in 2015 its income was about 52 billion USD.In 1994, in Belleview (state of Washington, USA) Jeff Bezos created a company for electronic commerce Amazon, which for 22 years has been offering convenient services of online shopping. In 2015 the company demonstrated real leadership results, having reached a 107 billion USD sales level. Starbucks opened its first shop in 1971 in Seattle, USA. In 1982 Howard Schultz joined the company as a retail sales and marketing director. Since that time Starbuckshas been marching with flying colours all through the world. In June, 2015 the total number of the company’s shops was about 22.5 thousand, and its income was close to 19 billion USD. The fact that by means of their companies their leaders exercised a positive impact on our lives and made the reality around us brighter and more interesting deserves special attention. The Walt Disney Company continuously gives us wonders with their films, presenting our children with the world of fairy-tales and fantasy. We look forward to a new masterpiece which always shows the victory of goodness over evil, strikes by beautiful views and impeccable quality. Ordering some goods by Amazon we are sure of quality, fast and efficient service. Dropping in Starbucks to have a cup of coffee after a hard working day, we get an energy and optimism boost. It is here that the main leader’s mission lies: in positive transformation of the world! And what about incomes, return on investments? The answer is simple! Leaders are well aware of the fact that a client is the blood of business; they will do everything possible to offer him goods or services of exclusive quality, if the client is prepared to pay for them, thus placing their companies on a pedestal of success. It is here that the main ‘secret’ of great business leaders lies: they fulfill their mission on improving the world to the full and in return they get thankful and devoted clients who create suchimpressive incomes which serve a stimulus for their companies for further development. As we can see, The Walt Disney Company, Amazon andStarbucks have demonstrated true realization of the leadership mission, having transformed it into quite substantial figures and growth! Any leader’s step should be made with the consideration of the fact that he is a person who is changing the world for the better. Elon Musk once said “When I was in college, I wanted to be involved in things that would change the world. Now I am.”2 It was Elon Musk who began the industrial output of electromobiles. The growing number of such electric cars will undoubtfully produce the most positive impact on environment, and their owners will be able to economize a pretty penny on filling up their cars. In return customers will ensure stable growth and profit for electric cars producers. In such a way, by improving our lives, companies become great and flourishing companies. The leader’s mission is leadership groundwork, on the basis of which leaders create companies that positively transform our world and make our lives better. With the knowledge of a leader’s main mission, let’s proceed to our key topic – basic leadership principles. Any business starts with its objective and its business idea which possesses potential for further development. Elon Musk, a person who has gained tremendous results, understood on his own experience that “people work better when they know what the goal is and why”.3. Leadership also begins with goal determination. No goal – no leadership. The whole business success depends of the fact if the goal was chosen correctly enough. It is in the process of goal gaining that we become true leaders who, together with their staffers, determine the optimal strategy, inspiring them to maximum commitment. So, the first leadership principle is the existence of the goal which mobilizes all organization resources and drives it forward. One doesn’t need much to determine a goal; one should look about and watch. For instance, it was already noticed that people use mobile messengers more and more, as they enable free calls, message interchanges and video conversations. Why not create a new type company which would provide its customers only with mobile Internet? There may be probably some obstacles in the line of technologies, cost of production of services, etc., but he who is afraid of the present will never create the future. The epoch of wire telephones has nearly become a thing of the past; yet someone should begin the fall of traditional mobile communications by proposing something more progressive and economical. In this way, by analyzing surrounding reality, new goals are born. The second basic leadership principle can be defined with the help of Steve Jobs’ words who said that "Innovation distinguishes between a leader and a follower."4The innovative iPhone made the Apple Company a market leader in next to no time, having transformed our idea of smartphones. Jack Welch’s innovative management model which meant a minimal bureaucratic constituent and managers’ free hand, based on corporate ethics, enabled General Electric to become a market leader. We have nearly forgotten about film cameras, CDs, mobile button phones and are currently expecting new proposals which can arrive from leaders who follow the second basic principle – the principle of innovativeness. One can endlessly modernize iPhone and its clones, but tomorrow there appears a new Steve Jobbs who will ruin all investments made and will propose to the world a new innovative smartphone, absolutely unlike anything we have seen before. Even if you are not a world-scope leader look what new things and ideas you can propose to your company. Study the experience of the others, implement it, facilitate in your staffers the development of unconventional thinking and of the ability to risk wisely; and success will not be long in coming. Be innovative, define innovative goals, this is the only way of leadership and progress.Let’s proceed to the third leadership principle – PEOPLE. Yes, this word is purposefully spelt in capitals, as this is the leader’s major responsibility. "Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others."5 – these words belong to Jack Welch. We’ll illustrate them with the following example. Let’s imagine that you – a leader – must build in your company a sales system, which is one of the most important strategic functions. With this purpose in mind, you are sure to invite an experienced manager, in this particular case – a sales director, you will discuss with him the sales system creation strategy and delegate him the authorities required. Since this moment not a sales system, but the Sales director is your main responsibility sphere. You will meet him from time to time, listen to his brief reports, give him recommendations, control his work, but not the work of the whole system. As a leader, you are responsible for his development too, demonstrating by your own example that the main working values for you are creativeness, constant desire to improve the company’s work and to gain your target goals. With great probability, inspired by your example, the sales director will exercise your desirable model of behaviour. If this doesn’t happen and he will not share your values and demonstrate high results, it is better to part with such a staffer as soon as possible. You must also be responsible for the best staffers’ incentive, not forgetting to point out their drawbacks at times and finding together with them the ways to eliminate these drawbacks. This is, in general terms, the responsibility concerning PEOPLE. Remember, that it is your colleagues that successful approach to your goal depends on. I’d like to refer to a valuable idea of Ralph Stogdill, a remarkable leadership researcher, who once said in one of his articles devoted to a leader’s features, that a leader can be successful only among the likes of him. Hence, build your team from people who share your values and demonstrate their wish to reach and produce exceptional results.And now it’s time to speak about the fourth basic leadership principle – the choice of a worthy successor, which according to Jack Welch, is one of the leader’s main tasks. A Successor is a person who would continue the leader’s line of business after the latter’s resignation, who would take all responsibility for the company’s afterlife. In should be noted that a mistake in the successor’s choice may be fatal for the company. Allow me to suggest some recommendations as concerns the given issue: 1. Define the criteria that a successor must meet (values, professionalism level, achievement, etc.). 2. Choose several people in the company whom you could trust its management. 3. If there are no people of such a kind, set your HP director a corresponding task immediately. 4. Watch the achievements of future possible successor candidates, set them complicated and ambitious but achievable tasks and analyze the obtained results. 5. Delegate them full authority for the time of your absence. 6. Pay special attention to such a candidate's quality as 'innovativeness', to the fact how often candidates to succession suggest new ideas. This is the ticket to keeping the company's leading position. 7. Trust the company to the best one among them. I’d like to stress that the ideal variant is when a future successor has a good career ladder in your company, beginning with a grassroots’ position. Besides, the company should create an open competition policy, where everyone enjoys equal possibilities and people are always awarded for their obtained results. This will enable the most talented and successful staffers demonstrate their skills to the best, and consequently will considerably facilitate your work as concerns the search of a successor; it will also give the opportunity for the most worthy and effective staffers to obtain leading positions.And finally we have come to the last leadership principle, the principle of effectiveness. “Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.”6 This is the phrase of Peter Drucker. It is by final results that we recognize the leadership of Steve Jobs, Jack Welch, Elon Musk and other famous business leaders. Remember: the more recognized results you have achieved, the greater leader you are. I would also place a greater focus on the fact that realizing the goal does not at all mean getting positive results which facilitate the company’s further development. In other words, goal achievement does not always lead to success. To illustrate this fact, I would like to provide an example from the history of MicrosoftCompany and its operational system Windows Vista. Evidently, while working on Vista the company defined the following goal: to make an operational system exceeding the previous one in its characteristics; and they managed it. But Vista consumed considerably more resources than Windows ХP, it was more expensive, and consequently was not accepted by the users with joy. The goal was achieved, however the results turned out to be not so sunny: disappointed consumers and, as the result, the absence of planned profits. The company had to considerably intensify its efforts to create the following operational system version which could eliminate the shortcomings of the previous one. This example is demonstrative enough: at times goal achievement does not mean success achievement. Defining the goal, it is obligatory to make forecasts as to future expected results and the desirable final product of your efforts. For instance, desirable results may be formulated as meeting the clients’ quality needs by means of new products and services, which, in its turn, will enable the growth of income and increasing of the brand awareness… The company’s provision with necessary resources for obtaining planned results is also worth attention, as well as existing market position, the staffers’ qualification level and goal achievement strategy. All this will minimize the risks of obtaining negative results and create the basis for the company’s further development. We have learned five basic leadership principles: goal, innovativeness, people, successor, effectiveness. Knowing them, we can start using them in our practical work, like the great business leaders do. They always begin their activity with defining the goal, considering its innovativeness and what new and positive changes it will bring to future customers and clients. They understand that they can realize it only on condition that their team will be made up of clever creative people, who constitute the greatest value for the leaders. Having started their business, they pay their attention to the problem of their possible future successor, which will take responsibility for the future development of their brainchild. And the most important thing: leaders work for the result which will introduce positive changes into the surrounding world and will secure the future of their company. In conclusion I would like to remind once again that leadership is a unique phenomenon, and there are no two similar business leaders in the world. Each of them had his own path and his own winning approach. I am convinced, that having begun your work on achieving your target goal, you are sure to add the suggested principles with new ones, which will facilitate the realization of your goal in the most efficient way.