Friday, October 7, 2011

Why Good Leaders Pass The Credit And Take The Blame

A few years ago my colleague Flemming Norrgren and I asked a long-tenured European CEO how he came up with the idea for his company's radical and new strategic direction. "Oh, that's an interesting question," he said. "I never thought about it in that way. Certainly it was not only me. I had a big role, but it was not me, me, me. This is not an American organization."

Flemming and I (both Europeans) laughed, and the CEO talked more about why leaders should praise their team instead of themselves.

Later, as I reviewed the heaps of interview transcripts from our Higher Ambition research, it struck me that the American and British CEOs, in general, tended to talk about themselves more than the team — they used me much more than we (or related words). This seemed to reinforce the European CEO's stereotype. The opposite was generally true for the CEOs from the rest of Europe and India, who tended to use we more than me (I tested this quantitatively).

But when I looked more closely at the challenges these "me" CEOs were confronting, I realized that the truth is actually a bit more complicated, and a whole lot more interesting than simple geography. As it turned out, a CEO's tendency to stress me or we related to whether or not he or she was dealing with a turnaround situation (and there were more turnaround cases in the American/UK sample).

It's no big news that leaders in turnaround situations tend to play a more prominent role in their companies than leaders in business-as-usual scenarios. What's interesting is, in interviews, the CEOs who had led turnarounds took personal responsibility when things went wrong and did not hesitate to share the credit with their teams when things went right.

These types of higher-ambition CEOs acknowledge the role they must play as exemplars. They see the willingness to accept personal responsibility — especially during tough times — as critical to winning the trust of employees and other stakeholders. Leaders, in their view, need the endurance and stamina to lead their organizations through thick and thin. They also need to contain the anxiety of their employees. A leader who spreads the blame, who fails to accept that he or she is ultimately the one in charge, increases the insecurity of their people and lessens the likelihood that they'll take ownership of initiatives.

A leader's individual focus, in other words, is what allows the collective enterprise to flourish. Take Carl Bennet, primary owner and chairman of Getinge AB, a global medical-technology company based in Sweden. In the late 1980s Bennet and his colleague Rune Andersson bought Getinge — which they saw as a diamond in the rough — from Electrolux, a white goods manufacturer. Getinge was losing money by the day, but both Bennet and Andersson invested their own money, each taking on millions of dollars in personal debt. Within six months, Getinge had lost half its value and the banks were knocking on the door.

Today, Getinge is valued at more than a hundred times its original purchase price, but Bennet downplays his role in the company's turnaround. "Anyone could have done it. It was a great company just waiting for somebody to care about it." The key to Getinge's turnaround, in his view, was how he unleashed the power of his employees by letting them do what needed to be done. Bennet jump-started some initiatives, but for the most part it was his employees who saw where the needs were and decided how to address them. Bennet also stressed another key element to Getinge's turnaround: He let his people know that he would stay "lashed to the mast," even when the wind blew hard. The CEO would not abandon ship.

However tempting it may be to assign cultural stereotypes, the truth, at least for the 36 companies we studied, seems to be that higher-ambition CEOs assume personal responsibility when things are bad and they give collective credit when things are good. These companies exemplify elements of both strong collective and individual leadership. Both — when used in the right situations — are essential for creating economic as well as social value.

Tobias Fredberg is Associate Professor of Management at Chalmers University in Gothenburg, Sweden, and a fellow at the TruePoint Center for Higher Ambition Leadership. He has researched and consulted across many industries on strategic change and the management of innovation. He is co-author with Michael Beer, Russell Eisenstat, Nathaniel Foote, and Flemming Norrgren of a new book, Higher Ambition: How Great Leaders Create Economic and Social Value.

Thanks to Tobias Fredberg / Blogs HBR / Harvard Business School Publishing
http://blogs.hbr.org/cs/2011/10/why_good_leaders_pass_the_cred.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

 

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