Transcript
Speaker: How can you be more effective as a leader? We asked an expert, and she's given us four tips for more effective leadership on the next episode of The Market That Moves America. Welcome to The Market That Moves America, a podcast from the National Center for the Middle Market, which will educate you about the challenges facing mid -sized companies and help you take advantage of new opportunities.
Speaker: Today's podcast is about how to increase your leadership impact, what it means to have more impact as a leader, what it takes, and what you can do to improve your skills so that your leadership packs a more effective punch.
Speaker: I'm Tom Stewart. I'm the executive director of the National Center for the Middle Market at the Ohio State University Fisher College of Business. We are the nation's leading research group focused on mid -sized companies which account for a third of private sector employment and GDP and the lion's share of economic growth. It is indeed the market that moves America. The National Center for the Middle Market is a partnership between Ohio State
Speaker: Grant Thornton LLP, Cisco Systems, and Chubb. With me today is a special guest, Kathy McCullough. Kathy is the co -author of a book called Predictable Results, and she's a consultant at Rhythm Systems, where she focuses on company growth and corporate culture. Kathy, welcome to the market that moves America. Well, thank you so much, Tom. Glad to be here.
Speaker: Kathy, tell us a little bit about your own background and how you got into the study of leadership and its effectiveness. Well, it started many years ago, let's just say 25 plus years ago, working with mom and pops, with people that have that American dream to start a business. And from that, I got into working with
Speaker: middle market type companies that are very successful and I was working primarily at the c -suite level with with executive officers just trying to figure out the puzzle of how to make a great company and grow a great company and you know have my bachelor's in psychology a master's in organization development and leadership and have just spent you know certifications and executive coaching etc and
Speaker: I love and have a passion for the world of leadership and what it can do to transform an organization.
Speaker: One of the things I heard a guy in Canada a few years ago talking about his own story, and he was talking about the moment when he realized that he couldn't be an entrepreneur, he needed to be a leader, and that it was a different thing that if he wanted to continue to grow his company and to enable his company to grow,
Speaker: He sort of had to put on a different hat from the one he had very successfully been wearing, starting up his company and bringing it to a certain level. Do you find that same sort of mindset transition when you sort of wake up one day and say, gosh, I'm a boss, I'm a leader, that's a little different from what I thought I was?
Speaker: Absolutely. And I think as a company grows, the complexity grows. And so a leader's primary job for the people around him or her is to simplify complexity. So we're looking at an entrepreneur is starting out and it's very different when when things are small, and we can kind of just make decisions by, you know, huddling up and just talking about it moving forward. But as things become more and more successful,
Speaker: the environment becomes more complex. Now we're leading a lot more people and we have to shift our thinking without still though losing that entrepreneurial spirit. And that can be a difficult shift for a lot of entrepreneurial minded type people. Starting an organization and laying the seeds for that and watching it grow in the beginning is very exciting and there's a lot of adrenaline rushes with that. But as it grows, it gets into other
Speaker: into balancing opposing forces and then identifying and clarifying to more people what it is we're trying to do and to pull them into that journey with us. What you're saying maps beautifully to some research that we just finished in a report that we call Strategic Planning for Growth in the Middle Market. One of the things that we learned in that research, first of all, it's based on
Speaker: a fundamental finding that if you actually decompose the elements of growth in middle market companies, you can ascribe 14 -15 % of growth to a company's ability to plan and have a formal growth strategy and carry it out. That's sort of whole planning operation or action.
Speaker: And one of the things that really stood out in this study where we focused really in on the strategic planning thing is that the success of a company's strategy depends hugely on what you just said on the process being open and inclusive, not just me going up on the mountain and coming down with a 10 -point program for growth, but actually an inclusive process that includes input from
Speaker: the rest of the organization, input from the market, input from customers, and so on and so forth, and that that same inclusiveness was critical for execution, that you can't develop strategy alone and you can't carry it out alone.
Speaker: Well, I think part of that is a, you know, a leader's job to, you know, sometimes the market doesn't know what they want. You know, Steve Jobs is famous for, for pointing that out that, you know, you can go ask customers all day, but there was a point in time when they wouldn't have known that they would really like or want an iPod, you know, for instance, because it hadn't been before. But I think what, what, what has to happen is a couple of, is some opposing forces, like leaders have to sit down. They have to slow down.
Speaker: and think, do the strategic thinking now that it's more complex, now that we really have something that's growing or we're wanting it to continue to grow, it's successful. But it's mostly as I work with that, they feel like they're not accomplishing anything because they don't feel as busy when they're sitting down either with themselves or with their team to create the strategies needed.
Speaker: And today's environment is basically, it's a perfect storm for distraction. Emails, cell phones, social media, meeting after meeting after meeting that really aren't accomplishing any strategic intent. So it's important for leaders to sit down and create, what is our mission here? And why are we even doing what we're doing? What's our strategic direction? Where are we headed? What's our vision?
Speaker: all of that, you have to slow down and think about what those three to five year winning moves are that are going to propel us and sustain our growth. So what are we going to do this year to accomplish that? So that's one side of it, what you just said, but the other side, the opposing side of that is leaders have to then be able to implement that strategy. And that's where most strategic plans, so to speak,
Speaker: fall apart because what you just said, there's no transparency, first of all, and the progress we're making or not on a given strategy or initiative. Therefore, our meetings become really watered down over time and we're not talking about what is it we said we wanted to do and how are we doing on that? And we can't work with speed if we don't have empower people involved and get a sense of team orientation,
Speaker: giving people the tools and resources they need. If they aren't engaged in the process, they won't be engaged employees.
Speaker: You sort of get that sense that if you're my leader and I have any sort of independent mind at all, first of all, I want to know why we're doing something and where we're going. I'm not just going to say, if you say, walk at four miles an hour, I want to know why and in which direction. But the other thing is, and this I think becomes an issue as companies scale,
Speaker: increasingly leaders have to rely on the ability of employees to make decisions on their own without constantly checking back. And so if I don't know where we're going, then I can't make those day -to -day decisions that are aligned with our strategy and our objectives. Well, and I think that's the number one hurdle that frankly, I see most leaders struggle with is they think many of them really do intend
Speaker: to empower people to do just what you said, make those decisions day -to -day and to make them well and be able to justify, hold themselves accountable. But the fact of the matter is most leaders struggle with how to delegate. And people as a result, people can sense that hesitancy. So they're hesitant. The group norms really are what they are.
Speaker: And many times leaders don't realize that their presence matters. So they walk into a meeting and they just kind of want to be there to, you know, I'm here just to help out, throw out some ideas. They forget that when they throw out an idea, somebody in that room is probably going to say, well, that's a mandate. I'm supposed to leave here and go do that. And so everything creates, there's a little bit of confusion sometimes when, so I think leaders should be very aware of their presence.
Speaker: and when to insert themselves, even on a casual basis, in a medium, and when not to, and how to best maximize their time in a way that they can be a resource for their people versus the go -to person to make the decision. I always share with leaders that one thing, one of the best catalytic mechanisms you can create for your people
Speaker: is to help them think strategically. And you don't do that by constantly inserting yourself in meetings or making decisions for people or giving the clarity around the intent. Here's what we're doing. Here's our vision. Here's where we're headed. Here's why. And then here's our strategic direction. So now, as we cascade this throughout the organization, what are some things that each level
Speaker: that you think you should do? What's your role in that? How can you continue to support the infrastructure of this company so that together we can accomplish these great things that we want to accomplish? And the best way of doing that is to elicit those ideas about how you can support rather than impose those ideas. Here's how you can support.
Speaker: Yeah, mandates rarely work. I was also struck by what you just said about leaders underestimating their impact and how the fact that their smallest hypothetical might be taken too seriously. I once had a boss who said that talking about somebody who worked with him, he said the problem was whenever I burped, he would try to bottle it, to study it, to see what it meant.
Speaker: And there used to be an old joke around, you know, one Fortune 500 company, there was an old joke, said the CEO had better be really careful because if he asked for a cup of coffee, somebody might go out and buy Brazil.
Speaker: So Kathy, one of the things that you've done as you've sort of developed some ideas of four ways, four tips, I guess, for leaders to maximize their impact. Can you, I mean, I imagine we've been talking about them, but can you perhaps tick them off? Absolutely, I'd be happy to.
Speaker: Well, and leadership is complex. So like I said, it's learning as the organization grows to balance two sides, the side of an organization that has to remain entrepreneurial and flexible, because that really is what's going to propel a company into longer term sustainability. But it won't get there if it doesn't have the opposing side of some stability built in that's going to help the organization kind of stay grounded. So to share with you,
Speaker: The four areas, one I would say is just what's your strategic intent. Let's get that really clear. Let's slow down and do the strategic thinking we need to do around what it is we want and hope to do and to accomplish. All right, so once we have that, I think the second area would be, so how are we going to engage people and involve them in this ongoing process? So people actually come to work every day, desiring to do and excited about doing what they do best every day.
Speaker: How do we empower them and are we empowering them? Do we have a whole sense of team orientation throughout the organization? Not just us at the C -suite level, we're all in. But how are we gonna work with speed? So that's that involvement piece. So mission is first, involvement and how we go about empowering people to do the work we need them to do, to engage them in the process is second.
Speaker: Then I would say thirdly as well would be, how do we continue to stimulate progress? And that's ongoing learning. You alluded earlier to something that jolted my thinking. And you're so right. There has to be transparency. We have to have a culture of transparency if we're going to stimulate progress. So the third area is how are we going to do that? How are we turning on a dime? What's our ability to do that? Are we learning as we go along?
Speaker: At Rhythm Systems, we say every annual initiative we have basically is a 13 week race. What are we doing each quarter, that 13 week race, what are we doing each quarter to make the strides toward where we want to be by the end of the year, which is in turn going to propel us to our three to five year winning move. So we have to have that sense of adaptability for going to stimulate progress.
Speaker: And the fourth area would be a sense of consistency to balance that progress. What are our core values? What's, you know, Jim Collins says, how are we preserving the core? How are we going about agreeing to be with each other each and every day within the walls of this organization? How do we solve our difficult problems? How do we get over the hurdles and create coordination and integration so that the right hand knows what the left hand is doing?
Speaker: So those are the four key areas that I see need a great, they're opposing forces, but they need a great sense of balance from leaders within organizations.
Speaker: You know, my inner PowerPoint maven or consultant or something like that just drew a circle with arrows. And in my circle with arrows, you start with this, figure out who we are and where we're going, that sort of mission slash strategy. This is the lighthouse we're trying to navigate to.
Speaker: The second arrow going around this circle is then involve people, engage them, and empower them to go there. This is where we're going to go. This is what your role is in it. I want you to be part of it. The third arrow, now we're three -quarters of the way around the circle, is decomposing this into milestones and progress
Speaker: And so that we know that we're getting there, because it's never going to be a straight line, but we want to see that we're making progress. And the fourth is keeping true and is what's our core business, what's our anchor. And that fourth arrow comes right back to mission. So in a sense, it refreshes it. And as you go around in that circle every time, your mission and strategy evolve, because of course,
Speaker: You have some wins. So your five year plan is going to be different after two years. It's going to evolve presumably because you've had a couple of victories and met a couple of obstacles. So you get this circle of strategy, engagement, milestones and anchor and keep going and keep and that wheel keeps those caissons keep rolling along. Well, and this is what really helps leaders who are you
Speaker: to go back to your original question about the entrepreneur growing into growing an organization now suddenly you know I'm a leader of a lot more people you know we want to not lose that entrepreneurial spirit what we want to do instead is foster it in the right way within the walls of our organizations so that's how you can't do that though if you're not adaptable and willing to learn that's why you stimulate progress you can't
Speaker: Do it without involving people and that's how you work with speed and both of those things are really feed an entrepreneur spirit Just that stimulating progress and working with speed So those are the cultural elements that have to be in place to catapult an organization into the future with sustainability but we also have to do the opposite we also have to slow down and think
Speaker: and we also have to preserve the core, but before we can preserve the core, these are the two, slowing down and thinking and getting the strategy right, and then preserving the core around how we're gonna go about being together within the walls of this organization. Those two things are gonna provide stability that the entrepreneur needs as anchors to anchor that company into the future.
Speaker: Let me ask you a question, Kathy. You've worked with a lot of CEOs, and I imagine that sometimes these CEOs come to you almost the way a patient might come to a psychiatrist with, oh my god, I've got a crisis. I've screwed up. I need help. And sometimes you work with people who don't have that crisis because they've caught on to it early. What's the, how do you, I guess my question is,
Speaker: First of all, what's the typical crisis a CEO has, but also what's the best way to avoid that crisis so that you actually do make that transition from entrepreneur to leader without having the organizational panic attack that some people have? I think there's two answers to that. One, I think, would be
Speaker: to make sure you're following a given methodology for how you go about just the rhythm, so to speak, of how this organization tends to work. I always like snap my fingers just because this is the way an organization needs to work because the routine of how we work is what will really allow, give us the freedom we need to be entrepreneurial while also being strategic.
Speaker: And so it's defying that strategic intent. And then getting a dashboard and a rhythm systems, of course, we have one that helps leaders track and it gives line of sight to what it is we're doing. What problems do we need to solve? And what are we learning? Did we overestimate? Did we underestimate? So just some way of tracking and creating a culture of transparency so we can talk about things in real time versus after the fact.
Speaker: Secondly, the flip side of that would be how is our culture doing? Tracking the strategy is one thing, but we've got to track the culture. Remember that, are we empowering? Are we creating team orientation? Are we stimulating progress? Are we preserving the core? And that can be done in one of two ways. I work with leaders to do Leadership 360, which I encourage every leader to do, because that way you can see the degree to which your own leadership is impacting
Speaker: the health or not of the organization and the implementation of your core priorities. You can also do a culture survey, just an overall culture survey.
Speaker: And it depends on the situation as to which one I might recommend, but either one of those will give you line of sight into the health of your organization. We're just completing a culture study too, Kathy, which fits neatly with that. And one of the realizations is that leadership and strategy gets supported by culture, both in two ways. One is just having a culture that is alive and that is
Speaker: palpable that people sense, but the other type of, the other thing, of course, is what type of culture it is. And, you know, an innovative entrepreneurial culture is a lot different from, you know, a parsimonious efficiency -oriented culture. They can both work, but you want a little, cultural clarity is really important, and then cultural type is really important.
Speaker: And that gets back sort of to our theme of amplifying, I'm a leader, I can only do so much myself. Culture is the water we all swim in and that nourishes everybody in their decision making. Absolutely. Well, you've probably heard the saying, culture can eat strategy for lunch. I've heard breakfast and dinner too. Yeah, exactly. And it's basically because that's
Speaker: Within the walls of the organization, a culture exists. Whether it's healthy or not, it is what it is. And it's assigned by certain values. And whether we define them or not, they're there. But the question is, are they the ones we want? And do those values, and are we teaching our people to think strategically, et cetera, and give them freedom? And it's freedom within a framework. But if we haven't even defined the framework,
Speaker: It's very difficult to really grow an organization in a healthy state.
Speaker: So Kathy, what I think I've heard, and if I can try to summarize this, is that the impact that a leader can create comes, first of all, from his or her role in helping to define a strategy and how it executes and how we track our progress toward it and how it fits with our core vision, that circle that you described. Second of all, in having
Speaker: a process, and accepting a process, by the way, a rhythm by which we manage this company, things we look at and the way we, sort of the process by which we do things around here.
Speaker: And third, by having a hand in making sure that there's health in the culture, which people also describe as the way we do things around here. So there's the formal and the informal ways we do things around here. And if you do those two things, you're going to be able to get a lot more leverage from those activities in that wheel we described and really increase your impact as a leader.
Speaker: Absolutely. I think if we had to sum it up in the four key areas would be the strategic intent of what we're doing, involvement, how are we involving people to help us implement our strategic intent, being adaptable, you know, creating change along the way, learning, are we a learning organization, and fourthly just
Speaker: How do we work together internally? How do we preserve the core? Just that sense of consistency within the walls of the organization.
Speaker: So Kathy, this has been a great discussion and very illuminating, and I want to thank you for joining us. And to all of you out there in podcast land, you can learn more about Kathy and her work at the website of her employer, which is Rhythm Systems. That's rhythmsystems .com. And she is the co -author of a terrific book with some of her colleagues there called Predictable Results, which you can learn more about on their website.
Speaker: And you can learn more about us, about the National Center for the Middle Market, from our website, which is middlemarketcenter .org. So thank you all for listening to The Market That Moves America. Never miss a new episode. You can subscribe to the podcast on iTunes, Stitcher, Google Play, or wherever fine podcasts are found. Or as I said, you can subscribe to the podcast and learn more about us at our website, middlemarketcenter .org.
