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Chapter One: Business Acceleration (Continued)

Leaders must adapt to the intense pace of a society that is linked together in this way. Instead of just telling others what to do, leaders listen more, discuss their vision and participate in the management and motivation of people. Executive coach and author Marshall Goldsmith describes it this way: "The great achiever: It's about me. The great leader: It's about them."

So, the good news is that there is success to be had in this era of organizational acceleration. Those leaders that are trying to survive by doing business the way that they have always done can become the next Meg Whitman of eBay or Jeffrey Immelt if they leave the status quo behind. Great leadership always involves a change in the status quo and a willingness to take risks, and both of these company leaders have kept their organizations in the forefront of success by constantly seeking ways to build on their successes, yet not being afraid to shed a familiar piece of the business if necessary.

For example, Whitman has successfully overcome strong competition from Amazon.com and Yahoo!. She addresses and solves problems quickly and works to weed out fraudulent items and offers on her site. As a result, eBay has posted a consistent flow of profits, making it the world's most valuable Internet brand. Whitman does not rest on her laurels; instead, she continuously seeks to add services and improve the eBay experience. Recently, she negotiated the acquisition of Skype Technologies, a company that offers high-quality voice communications to anyone with an Internet connection anywhere in the world. This acquisition was met with curiosity; some analysts questioned the reasons for it.

Those familiar with Whitman and the Skype product, however, have recognized the ingeniousness of the purchase. The Skype software is easy to download and install and enables free calls between Skype users online. After it is integrated with eBay, Skype is expected to streamline and improve communications between eBay buyers and sellers because buyers will be able to talk to sellers in real time, thereby quickly getting the information they need to buy. Sellers will have a faster method for building relationships and closing sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles. With this acquisition, Whitman has recognized that speedier service is essential for eBay.

As for Immelt, many wondered if he would be able to fill the gigantic shoes left by Jack Welch, who, for years, has been hailed as the corporate leader to emulate. Immelt has startled the world by not trying to be Welch, but instead turning GE into an innovator, full of new ideas and channels. Immelt has definitely grasped the concept that a company will not be successful in the early decades of the 21st century if it maintains the status quo. His goal is to spur growth far above the company's current 4 percent growth rate without losing their productivity edge. He had devised a six-part growth model, and company leaders are not only charged with applying initiatives to it but also are using it to explain new initiatives. In addition, he has sold divisions of GE that have not been very profitable (such as insurance) and pared down slower-growth, small-margin divisions like small appliances. At the same time, GE has acquired businesses that allow the company to establish itself in such hot areas as cable and film (Universal Studios, Telemundo, and Bravo), biosciences (Amersham), and security (Edward Systems).

But that's just the tip of the iceberg. Immelt believes that the best way to achieve sustained organic growth is through innovation. One of the first things he did when he took over in 2001 was invest $1 billion in research and development. Immelt has also instigated "Imagination Breakthrough" requirements for the company's leaders -- each must submit at least three proposals to a council Immelt established that will change GE's direction or alter its brand image or perception in the public eye. He has also restructured the way products are made for countries other than the U.S. He decided that taking a product and removing features for countries outside the U.S. wasn't working. The result of that decision was the formation of a team of 25 people to change the philosophy from removing features to learning what customers in other countries needed and building products for them. So far, these changes have been very successful; in October 2005, GE announced that its third-quarter earnings would meet the high end of earlier projections.

The lesson to be learned from Whitman and Immelt, along with other movers and shakers like Jeff Bezos of Amazon.com, Bill Gates (love him or hate him, he is still a visionary), Michael Dell, Sam Palmisano of IBM, the triumvirate at Google (Eric Schmidt, Larry Page, and Sergey Brin) and more, is this: Leaders must not only be bold if they want to thrive today, but they must also develop bold companies -- encouraging boldness in all aspects of the organization.

Becoming Bold

Exactly what does it take to be bold? In the 30 years that I have been helping clients, I have been pondering the answer to this question. At first, I thought that extraordinary leadership was the answer. But, once I started examining the concept of leadership, I realized that being a bold leader is not enough. A bold company also requires boldness in every level of the organization, from management to support staff. Leaders must therefore teach others how to be leaders. Their strategies must be flexible and innovative. They must challenge the established view of a leader as someone who leads and demonstrate that leadership means inspiring others to lead. They must have the courage and spirit to move from wherever they are to further their abilities to lead others into getting extraordinary things done. In other words, these leaders must practice Inspirational Leadership. And this is why I have devoted the next four chapters to this most essential type of leadership that fuels boldness throughout all organizations.

Having courage and spirit, which is at the heart of being an inspirational leader, is important. This is because bold and inspirational leaders must understand and help others understand that the company will have to make significant changes to the way it is doing business so that it can grow and thrive in an accelerated business environment. This means looking at the big picture and searching for the parts of that picture that are just filling up canvas and not adding value to the subject.

Actually, it is not enough just to look at the big picture. If your picture is in a frame, you need to look at the frame too. Is it possible that the frame is the important part and the picture inside it needs to be changed or removed? In other words, are you better at supporting the products your company makes than making them? Or is the frame that holds the picture rotting or overpowering the picture so that it is totally lost? That is often the case -- CEOs and other company leaders are spending so much time repairing the parts of their companies which support their core competencies that they have lost sight of the competencies themselves. Basically, companies must critically examine themselves and determine what their core competencies are. They must also make sure they are concentrating their energies on the actions that will bring them success in their core competencies. To do this, everyone must understand their companies' goals and have contributed to putting a strategic vision and plan in place.

After the core competencies have been identified, they can be subdivided into primary and secondary cores. This is analogous to separating the apples to put in the bag from those to keep out of the bag. Bold leaders and companies can then take steps to make sure that leaders and managers are concentrating the right amount of their precious time on those core competencies by letting others handle everything else. If leaders do this, then the company has a much greater chance of success. So many organizations have failed because not enough executive time was spent handling core competencies and executives were bogged down in the minutiae of physical expansion or antiquated IT systems that required constant maintenance and expenditures. When those worries are removed from the company leader's shoulders, the leader is free to focus on what is really important.

Of course, once you have identified core competencies, then it is time to look to other companies outside your organization to do the work that you have decided takes too much time away from focusing on your core. In other words, you must have an outsourcing plan and you must find organizations that have the experience to help you make your plan a reality. This is somewhat related to identifying core competencies, but it goes well beyond. There is no way, in this day and age, that companies can do it all. Outsourcing has taken on unnecessary negative connotations fed by analysts who say we're going to lose all our jobs to India, Mexico, and China. But in reality, outsourcing is the smart thing to do. If your company has decided to expand into a new market as part of its bold program, then it makes sense to seek out others who may know that market and work with them to ensure that your expansion is a success.

Not long ago, I would have told you that if you had a company that practices inspirational leadership and has taken the time to identify core competencies and outsource, then that company has an excellent chance of thriving in today's business climate. However, recent events such as 9/11, the Asian Tsunami, Hurricane Katrina and other disasters -- combined with the increasingly complex yet fragile supply chains that have been created to support globalization -- have led me to realize that being bold also means elevating business resiliency from contingency planning to a critical business strategy. If you do not know what will happen to your company after a natural disaster, a major power outage or even a terrorist attack, then your company does not have much of a chance of surviving should something like that occur. Your company must know exactly what it will do to recover from a disaster. Moreover, it is not enough to just know what your company will do; to be bold, you must also know what your supply chain partners and outsourcing providers will do.

"The supply chain is getting leaner, with less buffer and more inventory being held in other countries," observed Steve Phillips, CIO, Avnet Inc., a distributor of electronic components and computers, in a recent IndustryWeek interview. "This means there is less ability for the supply chain to soak up the shocks that occur." To counteract this, a bold organization invests in technology and relationships that provide them with visibility into the whereabouts of parts and materials shipments, as well as the critical paperwork that must accompany them.

So to be bold, a company must excel at three things: inspirational leadership, core competency and business resilience. The purpose of this book is to show you how to create inspirational leaders, how to determine your core competency or competencies, and understand what it takes to be a resilient business. When you have them all down and recognize that you must never stop growing or evolving, then you will truly be BOLD.