Leadership in the Aftermath of Greg Smith

On March 14, 2012 Greg Smith, a Vice President in the London office of Goldman Sachs, resigned from the firm. The same morning an op-ed piece from him with a public explanation for his resignation was posted on Mr. Smith stated that he could no longer work at Goldman given the shift, in his opinion, from a strong customer orientation to concern solely for Goldman’s profit.

Reflecting on how you might respond to a similar situation is a good leadership exercise. I believe there are two facets, or angles, from which to view this situation—internal and external to your organization.

As a leader, I feel it would be crucial to reach out to customers as quickly as possible with a message describing your values related to customer satisfaction and providing specific examples where customer benefits were put before your own corporate profitability. As I have written previously, trust is an essential element of leadership. This message can be delivered without a reference to the op-ed piece, thus keeping Mr. Smith’s negative view below the radar if it had not surfaced at any given customer.

The second facet is more difficult. An important question is the accuracy of Mr. Smith’s views. If his views are a faithful representation of your culture then it is time for some organizational reflection and soul-searching. It may be important to ask yourself what cultural values you wish to promulgate and then make a concerted effort to assess leader behavior.

Your behavior speaks louder than your words. Maintaining awareness of your own behavior is frequently difficult although training in mindfulness can pay great dividends. Using a third party to gather qualitative and quantitative views of your behavior is a good complementary method of assessment.

While it may be easy to dismiss Mr. Smith as simply a disgruntled employee, an authentic leader will have the desire to dig deep within himself and into the organization for any lessons that may be gleaned from this unfortunate situation.


  • Embrace and quickly respond to any customer concerns related to publicly aired negative views of your organization
  • Take any negative opinions of your leadership to heart
  • Use self-reflection and mindfulness to become more aware of your own behaviors
  • Use a third party to gather qualitative and quantitative views of your behavior

Keywords: leadership, trust, culture, mindfulness


  • Hogan, R. J. (2007). Personality and the fate of organizations. New York: Lawrence Erlbaum.
  • Hogan, R. J. (2008, April). Leadership is a Hygiene Factor. In R. B. Kaiser (Chair), Unconventional thinking about leadership. Symposium conducted at the meeting of Society for Industrial and Organizational Psychology Conference 2008, San Francisco, CA.
  • Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109–119.
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Are You Raising Pay to Retain Workers?

Today’s Blondie cartoon shows an example where the tyrannical boss, Mr. Dithers, tacks up a motivational poster and wonders if it will improve the performance of his workers. This cartoon, coupled with the anecdotal reports of companies raising pay to retain high performing workers, brings me to write this post explaining the relationship of three very important variables all leaders should understand.

Looking at our first variable, most leaders want team members who consistently perform at a high level, that is, having high job performance.

This begs the question of the second variable—how to motivate workers to perform at that level. Roughly three decades of research from the 1960s to ‘80s have settled in on the concept of intrinsic and extrinsic motivation. It was found that a segment of workers is motivated intrinsically, that is by challenges, promotions, and creating compelling products. Think Steve Jobs and his concept of putting a “dent in the universe.” Individuals, such as engineers and programmers are generally intrinsically motivated. They desire to create the next breakthrough product or service. As for extrinsic motivation, we frequently hear of sales people being extrinsically motivated by commissions, bonuses, and year-end trips and parties.

An important element in your success as a leader is to understand how your particular team members are motivated—extrinsically or intrinsically. Some of the research has shown that extrinsic rewards can destroy intrinsic motivation. If you’d like to read more about that, check out my previous post on motivation here.

The third variable is job satisfaction. Factors such as pay, work environment, organizational policies, and relationship with superiors make up this variable. In general, low job satisfaction drives turnover and absenteeism. Strangely enough, high job satisfaction won’t necessary motivate workers to perform better.

Having laid this foundation, let’s turn to the concept of raising pay to retain workers. Will it work? Possibly.

If a worker is extrinsically motivated, the additional money will likely have an effect on his or her performance and willingness to stay on with your organization.

However, if the worker is intrinsically motivated it will depend on the level of pay commensurate with the pay at other organizations. If you are paying less than other organizations and the worker is being motivated by challenging work, promotions, or some other intrinsic rewards, then the increased pay will likely help.

If your level of pay is on par with other organizations and you have challenging work assignments for your intrinsically motivated individuals, then you probably don’t have to worry.

People and Job Dynamics

I frequently use the accompanying chart with organizations to explain the relationship of these three important variables. Looking at the bottom row, low job performance, we can see that low performing workers will either be dismissed or quit if their job satisfaction is also low. I’m not sure what it means if a worker has high job satisfaction but low job performance.

For individuals performing at a high level, if they are extrinsically motivated and not satisfied with their job they may stay and feel miserable or leave. Increasing the pay of these individuals may help greatly if that is one of the factors contributing to the low job satisfaction.

If the individuals in question are intrinsically motivated, and are suffering from low job satisfaction, raising their pay is unlikely to have any lasting effect. You need to find how out what motivates them and respond appropriately.

Bottom line: talk to your team members and find out what excites them. If it’s money, fine. Otherwise, determine where their passion lies and find creative ways to plug into that energy. That’s leadership.


  • Three variables are important when considering how to retain and motivate team members: motivation type, job satisfaction, and job performance
  • Additional pay is likely to retain extrinsically motivated individuals if they are otherwise reasonably satisfied with their job
  • Additional pay for intrinsically motivated individuals is likely to help only if they believe that they are currently underpaid and are otherwise highly motivated by challenging assignments, promotions, and other intrinsic rewards
  • Additional pay is not likely to help retain workers if factors other than pay are contributing to low job satisfaction

Keywords: leadership, motivation, job performance, job satisfaction


  • Amabile, T. M. (1997). Motivating creativity in organizations: On doing what you love and loving what you do. California Management Review, 40(1), 39-58.
  • Herzberg, F. (1968). One more time: How do you motivate employees? Harvard Business Review, 46(1), 53-62.
  • Judge, T. A., Thoresen, C. J., Bono, J. E., & Patton, G. K. (2001). The job satisfaction-job performance relationship: A qualitative and quantitative review. Psychological Bulletin, 127(3), 376–407.
  • Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68-78.
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Are You Giving the Gift of 5 Minutes?

Last week I was speaking at a women’s leadership conference and enjoyed the keynote speech by Maggie Jackson, author of Distracted: The Erosion of Attention and the Coming Dark Age. In her talk she related the story of a woman whose boss would never give her his full attention. He would continually look at a screen, whether a cell phone or computer monitor, while attempting to carry on a conversation with her. The pain in her face was obvious as she exclaimed to Maggie,”Five minutes. That’s all I wanted—five minutes.”

As leaders, many of us feel compelled to remain as connected as possible to the network in cyberspace so that we can maintain a pulse on our team, our projects, and requests from superiors. This compulsion may be due to a self-imposed drive or from pressure above.

Let’s contrast this urge to stay connected with the network versus the need for a strong rapport with subordinates. Giving every team member your full attention is good leadership for many reasons.

First, it signals to the team member that you value them and what they have to say. It also shows respect, one of the most fundamental desires for us humans.

Secondly, good communication is one of the foundations of successful teams and organizations. Not surprisingly, Rensis Likert discovered in his research that communication was a key component of successful organizations. In the most effective organizations (System 4) the superior “Knows and understands problems of subordinates very well” and the interaction is “Extensive, friendly interaction with high degree of confidence and trust.”

While I rarely see this behavior, I hear of it quite a bit. It’s worthwhile to ask yourself if you’re connecting with your team members and giving them your full attention—at least for five minutes.


  • Building a strong rapport with your team members shows you value and respect them.
  • Good communication is one of the foundations of successful teams and organizations.

Keywords: leadership, communication, distraction, rapport


  • Bass, B. M. (1990). Bass & Stogdill’s handbook of leadership (3rd ed.). New York: The Free Press.
  • Hersey, P., Blanchard, K. H., & Johnson, D. E. (1993). Management of organizational behavior: Utilizing human resources (6th ed.). Englewood Cliffs, NJ: Prentice-Hall.
  • Likert, R. (1967). The human organization: Its management and value. New York: McGraw-Hill.
  • Shapero, A. (2004). Managing creative professionals. In The Human Side of Managing Technological Innovation: A Collection of Readings (2nd ed., pp. 48-55). New York: Oxford University Press.
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The Collaborative Leadership of Scott Brown and Elizabeth Warren

On January 20th U.S. Senate candidate Elizabeth Warren and incumbent Scott Brown signed a pledge intending to stop all PAC (Political Action Committee) spending on their campaigns. The pledge states that for every dollar a PAC spends on TV or Internet advertisement for them or against their opponent they will donate half that amount of money to a charity of the opponent’s choice.

I find this agreement a breath of fresh air, setting an example of political bipartisan leadership as well as collaborative leadership. This model should serve as an example for all politicians to follow. Collaboration is about building something together. It is about remaining open to new possibilities.

Collaborative leadership is both unifying and fluid. Think of an evolving organism, one that is highly dynamic as it adapts and wends its way toward its ever-changing goals. While this may seem amorphous, or even wishy-washy, it is the nature of the universe. Physicists speak of the dance when describing particle physics. Leadership and the nature of organizations is exactly the same.

Conversely, hardened positions such as signing a pledge for no new taxes (a la Taxpayer Protection Pledge) takes flexibility and adaptability off the table. Charles Darwin explained all too well for us what happens to species that are no longer able to adapt. Hardened ideological positions are fine for religions but are no way to stay ahead of the curve, whether leading a nation or a private organization.

It is difficult to lead collaboratively. It requires time, patience, and skill. All parties must be committed to the goal of creating something new and building trust. They must be willing to enter a meaningful dialog to come to an understanding of each other’s values and goals so that this new creation may emerge. Begin by building on small achievements together.

So ask yourself how well you’re working with other leaders and other teams…


• What behaviors do you exhibit which build trust?
• How do you engage others in meaningful dialog?
• How do you get peers to buy into your vision and goals?
• What process do you use to understand everyone’s values, beliefs, and goals?
• What process do you use to build a common vision?
• How do you build upon early accomplishments?
• Are you willing to invest the time to lead collaboratively?
• Are you willing to invest the time and energy to upgrade your leadership skills if necessary?

Keywords: collaborative leadership, trust, dialog, commitment


Ansell, C., & Gash, A. (2008). Collaborative governance in theory and practice. Journal of public administration research and theory, 18(4), 543-571.
Chrislip, D. D., & Larson, C. E. (1994). Collaborative leadership: How citizens and civic leaders can make a difference. San Francisco: Jossey-Bass.
Mullen, C. A., & Kochan, F. K. (2000). Creating a collaborative leadership network: An organic view of change. International Journal of Leadership in Education, 3(3), 183-200.

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This is One Impressive Cat: The Leadership of Doug Oberhelman

Caterpillar is an unlikely darling. We all know that technology is where it’s at, not heavy industry. Don’t tell that to Doug Oberhelman, CEO of Caterpillar. Under his leadership the company has thrived through the current recession.

Doug led a team during a boom cycle in 2005 that put together a strategy on how to deal with a huge downturn in sales. While extremely unpopular at the time, it turned out to be exactly the right thing to do. In November 2008 sales plummeted and the strategy was quickly executed in order to stay ahead of the downturn. This prepared Caterpillar for the next up-cycle—one that is currently underway.

Under Oberhelman’s leadership, Caterpillar recently completed the $8.8B acquisition of Bucyrus, a manufacturer of complementary heavy machinery as well as several other smaller acquisitions. Determined to make the most of this recession, he’s investing in new plants, hiring workers, bringing manufacturing back to the US where the customers are, and scratching to gain market share while others sit on hoards of cash and continue to lay workers off. This takes courage.

If you listen to Doug Oberhelman’s words and observe his actions you’ll notice something—his forward-moving energy is palpable. There’s a lot we can learn from Doug. Let’s look at his behavior:
• Focused on the customer (he visits at least one customer a week)
• Is optimistic about the market and paranoid about competitors
• Maintains a good balance between people and tasks
• Communicates, communicates, and communicates even more
• Focuses on moving forward while learning from the past

Keywords: leadership, balance, strategy, communication

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Are You Leading Consumers or Creators?

I’ll be the first to admit that today’s topic may be overly simplistic, however, I believe it is worth discussing. Make a list of your team members in one column. To the right of that column make three more columns with the headings Creator, Consumer, and Other.

Creators are individuals on your team who take minimal care and feeding, and they produce a steady stream of innovative results. Give them a direction and they’re off. These individuals are generally bright, disciplined and passionate about their work. On the other hand, Consumers will take a disproportionate share of your time by asking questions, remain unsure how to proceed in most tasks, and continually check in to make sure they are on the right track. They will likely be more concerned about what they are getting out of their employment than what they can produce for your team and the organization. Others may be steady, heads-down workers or deadwood.

Now venture down the list and place a check mark in the Creator or Consumer column for each team member or enter a comment in the Other column. It should now be easier for you to determine your top contributors as well as team members you may want to consider moving out. You may also want to think about your role in each performer’s results. How are you motivating your team members? How are you rewarding your top contributors?

• How many of your team members are needlessly consuming the majority of your time?
• How many of your team members are continually churning out useful, innovative results?

Keywords: leadership, employee selection, creativity, motivation

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The Power of the Big Picture

Yesterday I was reflecting on the loss of a friend whose life was tragically cut short. For me, this contemplation stirred up the duality and power of such an event—and how that power can be utilized in your leadership process.

As we ponder this loss, we can easily get lost in the hollow ring of her soft voice and memory of her sweet smile. But the power in this picture is the role model she played for all whose lives she touched. When we step back and look at the big picture of her life we can see the lessons she taught us—the search for deeper meaning in all events, finding the gifts each person presents to us, and the courage to live a life of giving.

Similarly, when we focus on a single challenging event we can easily become mired in negative energy. If we stop to place the event into the bigger picture it almost always brings reflection and an uplifting sense of purpose. Think Steve Jobs and his idea of putting a “dent in the universe.” In doing so you automatically play to the intrinsic motivation of your team members.

So put the duality to use. Keep a focus on overcoming the individual, challenging event, but also put it into the context of your overall project and how it will move your project forward.

• Use the big picture to play to the intrinsic motivation of your team members
• Maintain a focus for each individual team member their part of the project and how it fits into the big picture

• Have you laid out the big picture, the vision of the project for your team?
• Have you discussed with each team member the importance of their individual contribution?

Keywords: leadership, motivation, vision

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Sovereign Debt, Happiness, and Leading with Difficult Conversations

The global financial markets have been on a roller coaster ride for the last several months, primarily due to sovereign debt issues in Greece and Italy. Observations of the leaders and populace in these countries illustrate two important lessons.

The first lesson is to have the courage to initiate the difficult conversations frequently required as a leader. In this case the conversation is about austerity. Greek Prime Minister George Papandreou has failed to clearly communicate to the general public the ramifications of their situation and the sacrifices all parties must take. While we don’t know that improved communication would have prevented the ensuing riots, it wouldn’t have hurt. Instead, Papandreou vacillated from issue to issue and hid behind the idea of a referendum vote to the general population, abdicating his leadership role. In the end his unwillingness to continue leading in a straightforward fashion cost him his job as Prime Minister.

Italy’s long-time, flamboyant Prime Minister, Silvio Berlusconi, has probably spent more time the last several decades defending himself against scandals than leading the country forward or handling Italy’s economic malaise. Similar to Greece, Italy is unable to continue to service its debt. Furthermore, Berlusconi has been unwilling to clearly articulate the country’s current economic situation, the sacrifices all parties must make to move forward, and a path to economic health.

I continually see similar situations inside organizations. The most frequent lapse is the inability or unwillingness for managers to counsel subordinates and give honest, less-than-stellar, performance appraisals. Few of us like to tell someone they are deficient in some way, but it is necessary in order to create a high performance team. Key elements are to be clear and fair. Explain the specific issue, provide a global context, and state specifically what you would like to see and how it will help the team perform better.

The second lesson we can learn from the recent sovereign debt issues is that it is very simple to give something but very difficult to take it away. The riots in Greece are a prime example. Protesters are upset with reduced pensions, lost jobs, and other government cutbacks. Had Greek leaders acted responsibly and provided only what it could afford, the current austerity measures would not have been necessary. The psychology behind this is quite simple, we become happy when we get something, but more unhappy when we lose it than we were at the outset.

• Gather the courage to have the difficult conversations
• You will generate more unhappiness when you take back something you have given

Keywords: leadership, communication, difficult conversations, loss aversion

• Darling, J., & Nurmi, R. (1995). Downsizing the multinational firm: Key variables for excellence. Leadership & Organization Development Journal, 16(5): 22-28.
• Mishra, K. E., Spreitzer, G. M., & Mishra, A. K. (1998). Preserving employee morale during downsizing. Sloan Management Review, 39(2): 83-95.
• Munger, C. (1995, June). The psychology of human misjudgment. Lecture given at Harvard University.
• Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. The Quarterly Journal of Economics, 106(4), 1039-1061.

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Winning with Wise Leadership

We often adore and reward the powerful, impressive leaders while those quietly toiling and continually producing solid results remain unnoticed. I’d like to highlight Ellen Kullman, CEO and Chair of the Board of DuPont as an excellent example of a wise leader who doesn’t find it necessary to flaunt achievements on the media’s center stage.

The seminal research of Dr. Fred Luthans from the University of Nebraska-Lincoln in the mid-1980s is a good backdrop for this discussion. Dr. Luthans showed that the most effective managers spent the largest portion of their time communicating with their team, ensuring all members are aware of goals, current status, what is expected of them, etc. and on human resource (HR) management. He compared the effective manager results with those of “successful” managers, those who rose quickly in the hierarchy of their organization, who spent the largest portion of their time networking with individuals outside their team. Managers who were assessed as both effective and successful had a good balance of communication, HR, networking, and traditional management activity.

This compares well with the results of leadership studies by the author of Good to Great, Jim Collins. According to him, the highest level of leadership, Level 5, involves “personal humility and professional will.” In describing leaders who propel companies to consistent profits he often refers to their humility and somewhat dichotomous will to press forward with bold initiatives that at times seem premature and perhaps foolish.

Circling back to Ellen Kullman, she became CEO of DuPont at the beginning of 2009 as the latest recession was well along its precipitous slide. Ms. Kullman’s consistently pragmatic and visionary approach has yielded steady growth for DuPont. She communicates clearly and often, articulating aggressive goals, while maintaining a healthy ego. She has eschewed some of the corporate perks, such as the use of corporate jets for personal travel and listens intently to all with whom she interacts.

We could all do well listening and watching wise leaders such as Ellen Kullman, learning lessons in content, quality, and style of leadership.

• Look for leaders in your organization consistently churning out new products, services, and innovations without heroics or grandstanding

Keywords: leadership, communication, goals

• Collins, J. (2001). Good to great: Why some companies make the leap. and others don’t. New York: Collins.
• Collins, J. (2001). Level 5 leadership: The triumph of humility and fierce resolve. Harvard Business Review, 83(7/8), 136-146.
• Luthans, F. (1988). Successful vs. effective real managers. Academy of Management Executive, 2(2), 127-132.
• Luthans, F., Hodgetts, R. M., & Rosenkrantz, S. A. (1988). Real managers. Cambridge, MA: Ballinger.
• Luthans, F., Rosenkrantz, S. A., & Hennessey, H. W. (1985). What do successful managers really do? An observation study of managerial activities. The Journal of Applied Behavioral Science, 21(3), 255-270.

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“Occupy” and the Need for Leadership

The Occupy movements have been out on the streets for a several months now yet their goals remain largely unknown to most of us. The reason for this is because they really don’t have any goals beyond generating awareness, and have eschewed leaders and leadership. This is a good lesson for us in the value of leadership.

Leadership provides the most value, and in fact some say is only needed, in times of crises or turmoil. An effective leader will work to create a compelling vision with powerful goals that will attract and align people toward those goals. The messages communicated by a vigorous leader will be crisp and compelling.

While I sympathize with the protesters and agree that we must focus on maintaining a strong middle class, I am saddened that their energy is not as channeled and productive as it could be. If the occupy protesters were to channel their energy into crisply crafted goals such as generating awareness on a widening wealth and income gap, calling voters to action to communicate with their legislators, and providing lucid messages for them to communicate they could become a powerful force.

Without this, they stand to appear as an unorganized, drifting tribe of mavericks, garnering a fraction of the publicity and effectiveness they could, and truly should obtain.

• Leadership provides most value in times of crises or turmoil
• A leader motivates and aligns individuals toward common goals, enhancing group productivity

Keywords: leadership, goals, communication

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