Showing posts with label Apple. Show all posts
Showing posts with label Apple. Show all posts
Thursday, February 4, 2016
Wednesday, July 23, 2014
Is Competition a Catalyst for Innovation?
Image credit:
Antonio Zugaldia via Wikipedia
For hundreds of years of human history, innovation and discovery have occurred simultaneously, by different parties, all over the globe. In fact, it is difficult to find a major technological breakthrough of the last 200 years that didn't have multiple inventors, perhaps working thousands of miles apart, claiming that a particular discovery was theirs.
The lightbulb, most often attributed to Thomas Edison, had 20 individuals claiming responsibility for its technology. The development of the telephone can be attributed to the work of 10 great minds over 50 years, even though it is commonly credited to Alexander Graham Bell. In the 20th century, one of the most fascinating discoveries in physics, the theory of quantum electrodynamics, was developed by Richard Feynman, Sin-Itiro Tomonaga and Julian Schwinger, all independently of one another and across continents. While all three won the Nobel Prize for the discovery, a silent competitiveness ensued between Feynman and Schwinger as they seemed to race to publish their findings.
But to me, these are examples of an innovation Zeitgeist or spirit of the time that in many ways has been fueled by competition.
The early stages. In most instances a technological innovation, when first discovered, is not ready for the consumer. Often t innovator doesn’t fully understand the implications of what he or she has discovered. That's because at the moment of discovery the technology exists in a form that's may be very different from what a person needs. For the widespread commercial success of any innovation, two crucial discovery moments should be recognized: the discovery of the technology and the consumer’s discovery of products containing this technology.
At the core of the product-discovery moment for a consumer is awareness. Usually in order for this awareness to arise, the product has to be mentioned in a conversation between consumers. More often than not this dialogue takes place during a debate or as a comparison is made between two competing products. For the modern consumer, who is often inundated by product-marketing impressions and an abundance of choice, a product that can’t be incorporated in a side-by-side comparison with a competing product may be invisible. That's because competition increases category awareness, which in turn drives demand for a product category.
With low barriers to entry, and more and more affordable development resources, competition is a key component of the technology Zeitgeist we're in today. Competing products help fuel and articulate the value proposition of each device and force companies to innovate through differentiation.
The adoption factor. Within the tech community, people often talk about “adoption” without pausing to take in what the word really means. We simply speak of early and late adopters as elements on Everett Rogers’ innovation-adoption curve. What gets missed is that adoption is about recognizing that something has a place in one’s life. Competition can then be seen as a positive force that shapes technology into form factors and feature sets that better and better meet the needs of people.
Today we are seeing innovation folded into products that become a part of our daily lives at a much faster rate than in previous generations. We are witnessing this now with the Internet of Things, as an increasing number of connected devices become available to the ordinary consumer and people adopt these devices as permanent fixtures in their homes.
One of the most exciting things for me as an entrepreneur is helping bring innovation to people. Watching people develop close interactions with innovative products is extremely satisfying. This is because, when it is done right, interaction with a product can be seen as a form of human expression. When a product is fully adopted, it plays a vital role in fleshing out who the customer is as a person. And competition brings products closer to truly fulfilling the needs of people.
At the end of the day, the often unspoken truth is that companies like Apple need Google, Box needs Dropbox just as Thomas Edison needed Joseph Swan and Alexander Graham Bell needed Elisha Gray. Competition is fundamentally necessary to educate consumers and force companies to be innovative with their product offerings and business model. Microsoft finds itself in its current position because of having been too many years without strong competition and pressure to stay nimble with its business model.
So, as an entrepreneur, when asked how I feel about my competitors, my answer is very simple: I need them.
Monday, March 10, 2014
Developing Mindful Leaders for the C-Suite
Time Magazine recently put “The Mindfulness Revolution”
on its cover, which could either be seen as hyping the latest business
fad, or as signaling a major change in the thinking of executive
leaders. I believe it’s the latter.
The use of mindful practices like meditation, introspection, and
journaling are taking hold at such successful enterprises as Google,
General Mills, Goldman Sachs, Apple, Medtronic, and Aetna, and
contributing to the success of these remarkable organizations. Let’s
look at a few examples:
Focus, clarity, creativity, compassion, and courage. These are the qualities of the mindful leaders I have worked with, taught, mentored, and interviewed. They are also the qualities that give today’s best leaders the resilience to cope with the many challenges coming their way and the resolve to sustain long-term success. The real point of leverage — which though it sounds simple, many executives never discover — is the ability to think clearly and to focus on the most important opportunities.
In his new book Focus, psychologist Dr. Daniel Goleman, the father of emotional intelligence (or EQ), provides data that supports the importance of mindfulness in focusing the mind’s cognitive abilities, linking them to qualities of the heart like compassion and courage. Dr. Goleman prescribes a framework for success that enables leaders to build clarity about where to direct their attention and that of their organizations by focusing on themselves, others, and the external world — in that order. Cultivating this type of focus requires establishing regular practices that allow your brain to fully relax and let go of the anxiousness, confusion, and pressures that can fill the day. (Editor’s note: here is Daniel Goleman’s related HBR article, The Focused Leader.)
I began meditating in 1975 after attending a Transcendental Meditation workshop with my wife Penny, and have continued the practice for the past 38 years. (In spite of this, I still do mindless things like leaving my laptop on an airplane, but I continue to work on staying in the present moment.) All of our family members meditate regularly. Our son Jeff, a successful executive in his own right, believes he would not be successful in his high-stress job were it not for daily meditation and jogging.
Meditation is not the only way to be a mindful leader. In the classes I teach at Harvard Business School, participating executives share a wide range of practices they use to calm their minds and gain clarity in their thinking. They report that the biggest derailer of their leadership is not lack of IQ or intensity, but the challenges they face in staying focused and healthy. To be equipped for the rapid-fire intensity of executive life, they cultivate daily practices that allow them to regularly renew their minds, bodies, and spirits. Among these are prayer, journaling, jogging and/or physical workouts, long walks, and in-depth discussions with their spouses and mentors.
The important thing is to have a regular introspective practice that takes you away from your daily routines and enables you to reflect on your work and your life — to really focus on what is truly important to you. By doing so, you will not only be more successful, you will be happier and more fulfilled in the long run.
- With support from CEO Larry Page, Google’s Chade-Meng Tan, known as Google’s Jolly Good Fellow, runs hundreds of classes on meditation and has written a best-selling book, Search Inside Yourself.
- General Mills, under the guidance of CEO Ken Powell, has made meditation a regular practice. Former executive Janice Marturano, who led the company’s internal classes, has left the company to launch the Institute for Mindful Leadership, which conducts executive courses in mindfulness meditation.
- Goldman Sachs, which moved up 48 places in Fortune Magazine’s Best Places to Work list, was recently featured in Fortune for its mindfulness classes and practices.
- At Apple, founder Steve Jobs — who was a regular meditator — used mindfulness to calm his negative energies, to focus on creating unique products, and to challenge his teams to achieve excellence.
- Thanks to the vision of founder Earl Bakken, Medtronic has a meditation room that dates back to 1974 which became a symbol of the company’s commitment to creativity.
- Under the leadership of CEO Mark Bertolini, Aetna has done rigorous studies of both meditation and yoga and their positive impact on employee healthcare costs.
Focus, clarity, creativity, compassion, and courage. These are the qualities of the mindful leaders I have worked with, taught, mentored, and interviewed. They are also the qualities that give today’s best leaders the resilience to cope with the many challenges coming their way and the resolve to sustain long-term success. The real point of leverage — which though it sounds simple, many executives never discover — is the ability to think clearly and to focus on the most important opportunities.
In his new book Focus, psychologist Dr. Daniel Goleman, the father of emotional intelligence (or EQ), provides data that supports the importance of mindfulness in focusing the mind’s cognitive abilities, linking them to qualities of the heart like compassion and courage. Dr. Goleman prescribes a framework for success that enables leaders to build clarity about where to direct their attention and that of their organizations by focusing on themselves, others, and the external world — in that order. Cultivating this type of focus requires establishing regular practices that allow your brain to fully relax and let go of the anxiousness, confusion, and pressures that can fill the day. (Editor’s note: here is Daniel Goleman’s related HBR article, The Focused Leader.)
I began meditating in 1975 after attending a Transcendental Meditation workshop with my wife Penny, and have continued the practice for the past 38 years. (In spite of this, I still do mindless things like leaving my laptop on an airplane, but I continue to work on staying in the present moment.) All of our family members meditate regularly. Our son Jeff, a successful executive in his own right, believes he would not be successful in his high-stress job were it not for daily meditation and jogging.
Meditation is not the only way to be a mindful leader. In the classes I teach at Harvard Business School, participating executives share a wide range of practices they use to calm their minds and gain clarity in their thinking. They report that the biggest derailer of their leadership is not lack of IQ or intensity, but the challenges they face in staying focused and healthy. To be equipped for the rapid-fire intensity of executive life, they cultivate daily practices that allow them to regularly renew their minds, bodies, and spirits. Among these are prayer, journaling, jogging and/or physical workouts, long walks, and in-depth discussions with their spouses and mentors.
The important thing is to have a regular introspective practice that takes you away from your daily routines and enables you to reflect on your work and your life — to really focus on what is truly important to you. By doing so, you will not only be more successful, you will be happier and more fulfilled in the long run.
Bill George
Bill George is professor of management practice at Harvard Business School and former chair and CEO of Medtronic.Tuesday, September 10, 2013
When Acquisitions Become Drivers of Innovation
In the world of technology, companies are increasingly moving beyond growing organically and using acquisitions to enlarge their operations. Some have also made a strategic decision to acquire R&D rather than try to grow innovation in house.
Take for example Apple’s acquisition this summer of Toronto-based Locationary, the venture-backed startup that specializes in location data. According to a number of market experts, this deal allows Apple – which has its own R&D division – to immediately augment its mapping service so that users can access up-to-date information on local businesses.
Whether the acquirer is Apple, Google or Blackberry, the objective in these acquisitions must be carefully defined. That’s the view of John Banks, who teaches MBA students about M&A at Waterloo, Ontario’s Wilfrid Laurier University. “Regardless of how attractive the deal price or fortuitous the opportunity, it is essential that the impact the acquisition is intended to have on the company’s strategic direction be both understood and realistic for the transaction to be truly successful,” Banks says.
Enterprises that use M&A to supplement their R&D can approach acquisitions in a passive or active way. Those doing a formal search process tend to have access to strong corporate finance skills and are able to apply rigorous valuations and criteria for potential deals. Banks agrees with the value of using specialized expertise: “The assessment needs to be especially meticulous since research shows that this particular aspect of M&A is often characterized by incomplete if not irrational thinking.”
A smaller company is often attractive as an acquisition target because it can have the flexibility of a speed boat that manoeuvers rapidly around larger ships. “There is the ability for a small company to be nimble and to not be hampered by bureaucracy. They can do R&D at a quicker pace and without legacy products,” says Amar Varma, founder of Xtreme Labs, a Toronto-based provider of mobile solutions to businesses. (Varma coached BumpTop prior to its acquisition by Google in 2010.)
The issue for a larger company that chooses to use M&A to develop an innovative product pipeline is the risk of missing the window of opportunity to buy. If the targets are very attractive, they will be acquired. Google bought YouTube and capitalized on gaining a unique business while it was still available in the market.
A common impetus to enter acquisition mode is when the larger company is looking to grow by boosting a product or service offering. Once the target has been identified, it’s all about timing.
Says Varma: “Startups are continually looking for cash. The ability for a startup to obtain cash through customers or investors can significantly impact the upward trajectory of the deal price. This means the acquirer must purchase a startup at the optimal time – before there is too much competition to buy. Often, there is no demand until there is demand.”
When a company uses acquisitions to supplement its R&D, the corporate finance process needs to be highly streamlined and focused on its mission. “In order for an acquisition to go well, there needs to be strategic alignment for the bigger vision of the deal, an appropriate integration plan that minimizes day-to-day disruptions, and consideration for the cultural fit of both companies,” says Haroon Mirza, entrepreneur in residence at OMERS Ventures and co-founder of CognoVision, which was acquired by Intel in 2010.
The period immediately after the acquisition can be challenging, particularly if the small enterprise bought for R&D development has a superior product, as this can cause resentment by the acquirer’s team of employees. The need for cultural fit suddenly becomes startlingly clear. The on-boarding entrepreneurs will need a top executive at the acquiring business to champion the buy.
“It becomes important to keep employees of the acquiree informed about what the acquisition means for them – this can be a confusing time for employees who may feel their jobs are at risk and could consider leaving if they’re not well-informed,” Mirza explains.
Mirza was satisfied with his and his co-founders’ decision to have CognoVision acquired by Intel. “I do agree that an M&A can be a viable alternative to organic growth. For the acquirer, benefits include immediate access to intellectual property, business and technical domain expertise in terms of talent, and also our customers.
“For the acquired company, benefits include gaining access to significantly more resources for R&D, sales and marketing which can accelerate business growth by means of improved sales reach, cost optimization, and increased revenues.”
Jacoline Loewen is a director at Crosbie & Co. Inc., a provider of advice to small and medium-sized businesses. She is also the author of “Money Magnet: How to Attract Investors to Your Business.”
Friday, June 7, 2013
The Future Of Digital: 10 CEO Predictions At D11
Electric cars, beer-proof tablets and wearable computers were
just a few of the ideas (or developing products) dancing across the
minds of the D11 guests last week. While perspectives ranged from the
foundational to the unbelievable, all shared a vision that is
extraordinary in scope and virtue.
When it comes to the future of digital, here’s what the CEOs on stage had to say:
Big Data ROI
“There is a massive business opportunity in using software to anticipate industrial equipment maintenance needs,” said Jeffrey Immelt, CEO of GE. “Take the jet engine. It has about 20 sensors that capture real-time continuous data—temperature, engine performance, etc. If I can take that data and use it to model a consumer outcome—say, more time on the wing or less fuel burn—that’s worth an awful lot of money to my customers. A one percent change in fuel burn for an airline is worth hundreds of millions of dollars.”
Connected Stadiums
Sony CEO Kaz Hirai and San Francisco 49ers chief Jed York are teaming up to bring “beer-proof tablets” to the stadium experience. Come 2014, their smart stadium will connect fans in more ways than just replays. The tablets will be capable of showing the best places to park, the best routes to stadium destinations and even ordering food from your seats.
“The camaraderie of being at the game—there’s nothing like that,” York said. “We want to take that great home-entertainment experience and bring it to the stadium.”
Electric Cars and Trips To Mars
“I think it’s important that we transition to sustainable transport,” said Elon Musk, founder of Tesla, SpaceX and SolarCity. “Eventually we’ll face extremely high gasoline costs and the economy will grind to a halt if we don’t.”
Musk says the ultimate goal, though, is to get technology to the point where it can take us to Mars.
“Either we spread Earth to other planets, or we risk going extinct,” he said. “An extinction event is inevitable and we’re increasingly doing ourselves in.”
Fertility Apps
PayPal co-founder Max Levchin’s latest project aims to help women get pregnant. His new fertility company, Glow, uses analytics to track ovulation cycles and advise best times to conceive.
“My wife and I were lucky. We had our children without any issues,” said Levchin. ““But we have people close to us that have gone through multiple IVF trials, and we’ve heard them say, ‘We’re not going to put my wife’s body through this anymore.’”
Beyond pregnancy, Levchin hopes to use this model to give people more data on other areas of their health that will ultimately decrease health care costs overall.
Internet Of Things
Pinterest CEO Ben Silbermann thinks his company is well positioned for the future of the Internet.
“Many things were once very text-based and very popular,” Silbermann said. “But instead of being time-based, we made it visual . . . I think the web and media are becoming more visual in general.”
Silbermann also freely admitted that Pinterest isn’t making any money yet, but that it takes “more of a long-term perspective” to build a company that will stick around.
Mobile Data
“Transport will become free,” said Cisco CEO John Chambers, predicting that cellular data charges will fall like voice cell service. “Architectures will change. With intelligence throughout the network, the network will become the platform of the future.”
Smarter Phones
This fall, Motorola will release a “hero device” called the Moto X. The new phone will have a variety of always-on sensors that makes it more contextually aware—like knowing when you take it out of your pocket.
“We’re going to play a different game than Motorola has played in the recent past,” said Motorola CEO Dennis Woodside. “It’s not going to radically change the world in the first launch, but we do think that the products will find their markets.”
TV Disruption
“We’ve recognized that Twitter is the second screen for TV, and TV is more fun with Twitter,” said Twitter CEO Dick Costolo when asked about the next stage of the company. “There are a bunch of ways that we can be complementary to broadcasters. Traditionally, many in our area have viewed broadcasters as competitors—we think of it as complementary.
Virtual Assistants
“I think we will see virtual assistants within two years that are quite robust,” said Nuance CEO Paul Ricci. “I also believe that within two years we will see that virtual assistants will work across platforms.”
Wearable Computers
Wearables were a hot topic at D11 this year, especially with the buzz surrounding Google Glass. Here’s D11’s compilation of prominent speakers (including Hirai, York, Costolo and Tim Cook) sharing their thoughts and feelings about wearable computing devices, the future of that industry and whether they plan to get involved.
And of course . . . Apple isn’t about to give anything away.
“We release products when they are ready,” said Apple CEO Tim Cook. “We believe very much in the element of surprise. We think customers love surprises. I have no plan on changing that . . . We have several more game changers in us.”
When it comes to the future of digital, here’s what the CEOs on stage had to say:
Big Data ROI
“There is a massive business opportunity in using software to anticipate industrial equipment maintenance needs,” said Jeffrey Immelt, CEO of GE. “Take the jet engine. It has about 20 sensors that capture real-time continuous data—temperature, engine performance, etc. If I can take that data and use it to model a consumer outcome—say, more time on the wing or less fuel burn—that’s worth an awful lot of money to my customers. A one percent change in fuel burn for an airline is worth hundreds of millions of dollars.”
Connected Stadiums
Sony CEO Kaz Hirai and San Francisco 49ers chief Jed York are teaming up to bring “beer-proof tablets” to the stadium experience. Come 2014, their smart stadium will connect fans in more ways than just replays. The tablets will be capable of showing the best places to park, the best routes to stadium destinations and even ordering food from your seats.
“The camaraderie of being at the game—there’s nothing like that,” York said. “We want to take that great home-entertainment experience and bring it to the stadium.”
Electric Cars and Trips To Mars
“I think it’s important that we transition to sustainable transport,” said Elon Musk, founder of Tesla, SpaceX and SolarCity. “Eventually we’ll face extremely high gasoline costs and the economy will grind to a halt if we don’t.”
Musk says the ultimate goal, though, is to get technology to the point where it can take us to Mars.
“Either we spread Earth to other planets, or we risk going extinct,” he said. “An extinction event is inevitable and we’re increasingly doing ourselves in.”
Fertility Apps
PayPal co-founder Max Levchin’s latest project aims to help women get pregnant. His new fertility company, Glow, uses analytics to track ovulation cycles and advise best times to conceive.
“My wife and I were lucky. We had our children without any issues,” said Levchin. ““But we have people close to us that have gone through multiple IVF trials, and we’ve heard them say, ‘We’re not going to put my wife’s body through this anymore.’”
Beyond pregnancy, Levchin hopes to use this model to give people more data on other areas of their health that will ultimately decrease health care costs overall.
Internet Of Things
Pinterest CEO Ben Silbermann thinks his company is well positioned for the future of the Internet.
“Many things were once very text-based and very popular,” Silbermann said. “But instead of being time-based, we made it visual . . . I think the web and media are becoming more visual in general.”
Silbermann also freely admitted that Pinterest isn’t making any money yet, but that it takes “more of a long-term perspective” to build a company that will stick around.
Mobile Data
“Transport will become free,” said Cisco CEO John Chambers, predicting that cellular data charges will fall like voice cell service. “Architectures will change. With intelligence throughout the network, the network will become the platform of the future.”
Smarter Phones
This fall, Motorola will release a “hero device” called the Moto X. The new phone will have a variety of always-on sensors that makes it more contextually aware—like knowing when you take it out of your pocket.
“We’re going to play a different game than Motorola has played in the recent past,” said Motorola CEO Dennis Woodside. “It’s not going to radically change the world in the first launch, but we do think that the products will find their markets.”
TV Disruption
“We’ve recognized that Twitter is the second screen for TV, and TV is more fun with Twitter,” said Twitter CEO Dick Costolo when asked about the next stage of the company. “There are a bunch of ways that we can be complementary to broadcasters. Traditionally, many in our area have viewed broadcasters as competitors—we think of it as complementary.
Virtual Assistants
“I think we will see virtual assistants within two years that are quite robust,” said Nuance CEO Paul Ricci. “I also believe that within two years we will see that virtual assistants will work across platforms.”
Wearable Computers
Wearables were a hot topic at D11 this year, especially with the buzz surrounding Google Glass. Here’s D11’s compilation of prominent speakers (including Hirai, York, Costolo and Tim Cook) sharing their thoughts and feelings about wearable computing devices, the future of that industry and whether they plan to get involved.
And of course . . . Apple isn’t about to give anything away.
“We release products when they are ready,” said Apple CEO Tim Cook. “We believe very much in the element of surprise. We think customers love surprises. I have no plan on changing that . . . We have several more game changers in us.”
Author: CEO.com Staff
Friday, May 24, 2013
How Consumers Are Using Their Phones, And What It Means
By: Josh Luger
dMobile is no longer a communications utility, but a media
distribution hub. According to eMarketer, mobile now accounts for 12 percent of
Americans' media consumption time, triple its share in 2009.
Where is this consumer attention being focused?
The biggest beneficiaries have been mobile apps. Time spent
on apps dwarfs time spent on the mobile Web, and smartphone owners now spend
127 minutes per day in mobile apps.
In a recent report from BI Intelligence, we analyze the main
mobile usage trends developers and publishers should consider to be successful
in mobile, detail how users are consuming content on their mobile devices, take
a look at the most popular mobile activities, and examine how mobile usage is
an additive activity.
Here's an overview of the four usage trends developers and
publishers should consider:
The rise of gaming:
Games are the largest mobile app category and the biggest money-maker in the
app stores, accounting for 70% of Apple's top-grossing apps. However, even with
the most addictive games, consumers' attention is fleeting and companies run
the risk of becoming "one-hit wonders."
Mobile-social
synergies: Social networking apps are the second largest time bucket for
mobile users. 39% of mobile users access social networks. This includes mobile
versions of desktop favorites, as well as mobile-first networks like Instagram.
Mobile holds promise for the social category, but monetization is far from a
sure thing.
The piggyback rule:
The only tried-and-true way for a mobile success is to take a popular usage
category and build a product that piggybacks on that activity to provide a
unique mobile-native experience. Instagram did it with photos, "Angry
Birds" with games, but other usage categories — news, weather, travel,
video etc. — are waiting for a similar hit.
Portal erosion:
Mobile is a fragmented space, and consumers seem to like it that way. No one
has succeeded aggregating services via a single app or mobile website. The
desktop portal is fading with the advent of mobile. Yahoo Mail Traffic declined
12% in the 12 months leading up to December 2012. Carrier attempts to build
mobile portals have failed miserably.
Friday, March 29, 2013
The 5 Principles of Leadership, Part II
by futurist Richard Worzel, C.F.A.
This is a continuation of an earlier blog, which you can read here.
Third Principle: A leader places the organization’s goals above her own, and pushes her followers to improve.
Why do you lead? Is it to accomplish a specific goal? Or is it to feed your ego? If the latter, then you’re running a personality cult, and you probably don’t want to help your followers get better for fear they’ll surpass or challenge you.
There’s a possibly apocryphal story of an MBA student of one of the more prestigious B-schools (guess which one) who was asked, in a job interview, if he considered himself a team player. He replied, “Absolutely – if I’m the captain.”
If your devotion is to getting things done, to reaching your group’s collective objectives, then the faster your people hone their skills and increase their abilities, the more likely you are to achieve what you, collectively, set out to achieve. And this is as true whether you lead, or whether you discover someone who would actually be a better leader than you are, and cede the leadership role to him or her.
But if your goal is to feather your own nest and buff up your ego, then you are not leading, but rather misleading. In that case, the group’s goals are, at best, secondary to your personal agenda. Indeed, if you look at many of the problems in corporate leadership in recent years, they often stem from the head person’s desire to achieve personal goals (bonuses, stock options, corporate perks, etc.) at the expense of the corporation’s goals or interests. In my opinion, these people are liars, not leaders.
Think, for example, of Aubrey McClendon of Chesapeake Energy, who used corporate jets for personal reasons, borrowed $500 million from a company that’s an investor in Chesapeake, and ran a hedge fund with a direct conflict of interest with his day job of being CEO. Or what about Carly Fiorina, who paid herself handsomely, spent a lot of her time self-promoting, worked the lecture circuit and did media grandstanding, all while firing staff in order to cut costs, and leading Hewlett-Packard into a disastrous merger with Compaq. Then there’s Ken Lay of Enron, who defies the whole concept of leadership. He lied, cheated, swindled, and ultimately stole from investors, stakeholders, and the people who were supposed to be his clients. His company’s, customers’, and employees’ entire purpose for being, as far as he was concerned, was for the glorification and enrichment of Ken Lay. His company, Enron, became the ultimate example of corporate greed and dishonesty.
Until, that is, Lehman Brothers went bankrupt in 2008. Lehman Brothers not only exemplified Wall Street’s greed and corruption, gambling with other peoples’ lives and money to try to win huge bonuses for themselves, but almost took down the entire free market system with them. And Dick Fuld was the “leader” that drove Lehman on the rocks, yet remains unrepentant to this day.
The capitalist system works best when both parties are better off as the result of a transaction, if both sides profit. People who do not understand capitalism believe that the capitalist (the bad guy) is profiteering off the hard work of the exploited worker. In fact, the owner does benefit from the work of the worker, but the worker also benefits from the capital investment and market position created by the owner. And the purchaser benefits from the innovation and production of the producer, which in turn benefits by supplying the product or service at a price that is higher than its cost of production. Both sides are better off. But when this two way street breaks down, it’s no longer capitalism, but exploitation. And deliberate subversion of a leadership position for personal gain amounts to exploitation of both the people being led, and the customers or clients being short-changed.
But what about an entrepreneur or founder, someone who starts a company, movement, or organization? Don’t they have to lead the organization in order to accomplish their own personal goals? Indeed, don’t they hire people to help them achieve that specific purpose? No, generally they don’t.
If a founder’s entire purpose is to have people perform personal services for them, that’s one thing. That’s a service transaction.
But if you look at organizations that started off as entrepreneurial ventures, and then grew into something more, they change as they grow, and their objectives change as well. Take, for example, the early days of Apple Computer (now Apple Inc.). Steve Jobs and Steve Wozniak founded Apple Computer, but believing that they had something big on their hands, and that they needed both more capital and executive expertise they didn’t have, found both in veteran Mike Markkula, an angel investor who backed the fledgling company, and whom the two Steves lured out of retirement in 1977. Markkula brought not only money, but connections, financial savvy, and executive ability to Apple. He recruited the first professional CEO for Apple in 1977, and then assumed the role of CEO himself in 1981.
Markkula was devoted to the goals of the organization, not the two Steves. In fact, he overrode Steve Job’s early attempt to kill the Macintosh computer in favor of another project, backed John Sculley’s ouster of Steve Jobs in 1985, and then Sculley’s ouster in 1993. Markkula remained Chair until 1997, when Jobs returned to the company, and a new board was constituted. His devotion was to the objectives of the company, its employees, and its stakeholders, not to the founders.
My point is that although Jobs is now, in retrospect, seen as the archetypical visionary and entrepreneur, he grew into that role, and his path, and Apple’s, overlapped but were not the same. Jobs hired people to serve over him when he lacked the necessary skills, and although his story ends with him as the shining exemplar, the ultimate entrepreneur, what made Apple the world-shaking organization it became involved more than just Jobs’ leadership, crucial though that was to the company’s eventual success. Fortunately, Jobs and Wozniak were smart enough to realize early on that they needed to follow someone who was more experienced than they were – and that may be the greatest testament to their leadership abilities.
So, to sum up this principle: a true leader is one that is truly committed to leading towards the organization’s goals, even when her personal goals are overridden by those of the organization.
Principle 4: A leader must promise success, and achieve it.
In many ways, this is the most important of all the five principles. If a leader doesn’t promise victory, either implicitly or explicitly, or his followers don’t believe he can deliver victory, they won’t follow him. Success in the agreed-upon goal becomes the ultimate test of leadership, and the ultimate reason why people will follow you.
There are many examples of this, but one of the best is a British general from the Napoleonic Wars, Roland “Daddy” Hill, who became the 1st Viscount of Almaraz. The fighting men of the British army at that time were described by Lord Wellington as “the scum of the Earth” because they were largely convicts who chose to enlist rather than be executed for their crimes. (He also added that they were the greatest fighting men in the world, which Napoleon found out the hard way.) Discipline was more than harsh, involving floggings or executions for what we would consider inadequate reasons, and so it was in Hill’s command.
Despite this Hill’s men loved him, and called him Daddy Hill, for two reasons. First, he looked after them, both en masse, and individually. Despite the differences in rank, he would personally thank messengers and solders who served him, and make sure they were well fed and well treated. He showed his men respect, in other words, despite the apparently enormous social gulf between his military rank and social station, and theirs.
But the biggest reason he was loved was that he lead his men to victory, sharing their danger, showing his commitment, leading from the front, and almost being killed during the Battle of Waterloo, when his horse was shot out from under him. He won repeatedly, sometimes against fearsome odds and in difficult situations. In one encounter, at Arroyo de Molinos in Spain, his force inflicted 1,300 casualties on Napoleon’s army, while his troops suffered only 65 casualties. He inspired fierce loyalty and affection.
In contrast, let’s return to Steve Jobs and Apple. Outside of Apple, Jobs was celebrated as a visionary, someone who both saw and shaped the future. But he was hell to work for, often running roughshod over the people who worked for him, showing no interest in their feelings, well-being, or position, demanding unreasonable results, ruining their personal lives, treating them like idiots, and sometimes taking credit for their successes. He famously inspired fear, not love, and was known to have fired employees for things they said when he met them in an elevator.
But he delivered results, and people fought to work for Apple for the prestige of working for a company that could make technology cool, and invent the future. His success was more important than the questionable grooming habits of his early years, his uncompromising, inhuman perfectionism, or his raw, take-no-prisoners, domineering leadership style. He successfully led people where they wanted to go – and they willingly, eagerly followed.
So if you want to lead, you must be able to convince your followers that you will lead them to success. And eventually, you have to deliver that success. Everything else, from leadership style, to personality, to social standing, to skill, is secondary.
This is a continuation of an earlier blog, which you can read here.
Third Principle: A leader places the organization’s goals above her own, and pushes her followers to improve.
Why do you lead? Is it to accomplish a specific goal? Or is it to feed your ego? If the latter, then you’re running a personality cult, and you probably don’t want to help your followers get better for fear they’ll surpass or challenge you.
There’s a possibly apocryphal story of an MBA student of one of the more prestigious B-schools (guess which one) who was asked, in a job interview, if he considered himself a team player. He replied, “Absolutely – if I’m the captain.”
If your devotion is to getting things done, to reaching your group’s collective objectives, then the faster your people hone their skills and increase their abilities, the more likely you are to achieve what you, collectively, set out to achieve. And this is as true whether you lead, or whether you discover someone who would actually be a better leader than you are, and cede the leadership role to him or her.
But if your goal is to feather your own nest and buff up your ego, then you are not leading, but rather misleading. In that case, the group’s goals are, at best, secondary to your personal agenda. Indeed, if you look at many of the problems in corporate leadership in recent years, they often stem from the head person’s desire to achieve personal goals (bonuses, stock options, corporate perks, etc.) at the expense of the corporation’s goals or interests. In my opinion, these people are liars, not leaders.
Think, for example, of Aubrey McClendon of Chesapeake Energy, who used corporate jets for personal reasons, borrowed $500 million from a company that’s an investor in Chesapeake, and ran a hedge fund with a direct conflict of interest with his day job of being CEO. Or what about Carly Fiorina, who paid herself handsomely, spent a lot of her time self-promoting, worked the lecture circuit and did media grandstanding, all while firing staff in order to cut costs, and leading Hewlett-Packard into a disastrous merger with Compaq. Then there’s Ken Lay of Enron, who defies the whole concept of leadership. He lied, cheated, swindled, and ultimately stole from investors, stakeholders, and the people who were supposed to be his clients. His company’s, customers’, and employees’ entire purpose for being, as far as he was concerned, was for the glorification and enrichment of Ken Lay. His company, Enron, became the ultimate example of corporate greed and dishonesty.
Until, that is, Lehman Brothers went bankrupt in 2008. Lehman Brothers not only exemplified Wall Street’s greed and corruption, gambling with other peoples’ lives and money to try to win huge bonuses for themselves, but almost took down the entire free market system with them. And Dick Fuld was the “leader” that drove Lehman on the rocks, yet remains unrepentant to this day.
The capitalist system works best when both parties are better off as the result of a transaction, if both sides profit. People who do not understand capitalism believe that the capitalist (the bad guy) is profiteering off the hard work of the exploited worker. In fact, the owner does benefit from the work of the worker, but the worker also benefits from the capital investment and market position created by the owner. And the purchaser benefits from the innovation and production of the producer, which in turn benefits by supplying the product or service at a price that is higher than its cost of production. Both sides are better off. But when this two way street breaks down, it’s no longer capitalism, but exploitation. And deliberate subversion of a leadership position for personal gain amounts to exploitation of both the people being led, and the customers or clients being short-changed.
But what about an entrepreneur or founder, someone who starts a company, movement, or organization? Don’t they have to lead the organization in order to accomplish their own personal goals? Indeed, don’t they hire people to help them achieve that specific purpose? No, generally they don’t.
If a founder’s entire purpose is to have people perform personal services for them, that’s one thing. That’s a service transaction.
But if you look at organizations that started off as entrepreneurial ventures, and then grew into something more, they change as they grow, and their objectives change as well. Take, for example, the early days of Apple Computer (now Apple Inc.). Steve Jobs and Steve Wozniak founded Apple Computer, but believing that they had something big on their hands, and that they needed both more capital and executive expertise they didn’t have, found both in veteran Mike Markkula, an angel investor who backed the fledgling company, and whom the two Steves lured out of retirement in 1977. Markkula brought not only money, but connections, financial savvy, and executive ability to Apple. He recruited the first professional CEO for Apple in 1977, and then assumed the role of CEO himself in 1981.
Markkula was devoted to the goals of the organization, not the two Steves. In fact, he overrode Steve Job’s early attempt to kill the Macintosh computer in favor of another project, backed John Sculley’s ouster of Steve Jobs in 1985, and then Sculley’s ouster in 1993. Markkula remained Chair until 1997, when Jobs returned to the company, and a new board was constituted. His devotion was to the objectives of the company, its employees, and its stakeholders, not to the founders.
My point is that although Jobs is now, in retrospect, seen as the archetypical visionary and entrepreneur, he grew into that role, and his path, and Apple’s, overlapped but were not the same. Jobs hired people to serve over him when he lacked the necessary skills, and although his story ends with him as the shining exemplar, the ultimate entrepreneur, what made Apple the world-shaking organization it became involved more than just Jobs’ leadership, crucial though that was to the company’s eventual success. Fortunately, Jobs and Wozniak were smart enough to realize early on that they needed to follow someone who was more experienced than they were – and that may be the greatest testament to their leadership abilities.
So, to sum up this principle: a true leader is one that is truly committed to leading towards the organization’s goals, even when her personal goals are overridden by those of the organization.
Principle 4: A leader must promise success, and achieve it.
In many ways, this is the most important of all the five principles. If a leader doesn’t promise victory, either implicitly or explicitly, or his followers don’t believe he can deliver victory, they won’t follow him. Success in the agreed-upon goal becomes the ultimate test of leadership, and the ultimate reason why people will follow you.
There are many examples of this, but one of the best is a British general from the Napoleonic Wars, Roland “Daddy” Hill, who became the 1st Viscount of Almaraz. The fighting men of the British army at that time were described by Lord Wellington as “the scum of the Earth” because they were largely convicts who chose to enlist rather than be executed for their crimes. (He also added that they were the greatest fighting men in the world, which Napoleon found out the hard way.) Discipline was more than harsh, involving floggings or executions for what we would consider inadequate reasons, and so it was in Hill’s command.
Despite this Hill’s men loved him, and called him Daddy Hill, for two reasons. First, he looked after them, both en masse, and individually. Despite the differences in rank, he would personally thank messengers and solders who served him, and make sure they were well fed and well treated. He showed his men respect, in other words, despite the apparently enormous social gulf between his military rank and social station, and theirs.
But the biggest reason he was loved was that he lead his men to victory, sharing their danger, showing his commitment, leading from the front, and almost being killed during the Battle of Waterloo, when his horse was shot out from under him. He won repeatedly, sometimes against fearsome odds and in difficult situations. In one encounter, at Arroyo de Molinos in Spain, his force inflicted 1,300 casualties on Napoleon’s army, while his troops suffered only 65 casualties. He inspired fierce loyalty and affection.
In contrast, let’s return to Steve Jobs and Apple. Outside of Apple, Jobs was celebrated as a visionary, someone who both saw and shaped the future. But he was hell to work for, often running roughshod over the people who worked for him, showing no interest in their feelings, well-being, or position, demanding unreasonable results, ruining their personal lives, treating them like idiots, and sometimes taking credit for their successes. He famously inspired fear, not love, and was known to have fired employees for things they said when he met them in an elevator.
But he delivered results, and people fought to work for Apple for the prestige of working for a company that could make technology cool, and invent the future. His success was more important than the questionable grooming habits of his early years, his uncompromising, inhuman perfectionism, or his raw, take-no-prisoners, domineering leadership style. He successfully led people where they wanted to go – and they willingly, eagerly followed.
So if you want to lead, you must be able to convince your followers that you will lead them to success. And eventually, you have to deliver that success. Everything else, from leadership style, to personality, to social standing, to skill, is secondary.
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