Gutsy Leaders Know Top Talent Is Key

Today’s guest post is from Bob Herbold, the former Chief Operating Officer of Microsoft Corporation and author of What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders (buy a copy now by clicking this link). You can read more about Bob at the end of this post.

In 1995, Canon was in deep trouble. The company had built up debt of $7.5 billion. Its many product divisions were described in the press as a bunch of warring, money-losing fiefdoms that plodded along year after year. For example, they still had an electric typewriter division, even though PC’s were making such devices obsolete. Nobody was making the tough decisions, resulting in the lack of a focused vision, bloated costs and minimal innovation.

Why do managers find it so difficult to make the tough decisions; often wimping out and simply protecting the status quo?

First of all, tough decisions have some very challenging characteristics. They typically don’t have an ideal solution. All the options have some negatives as well as positives. Additionally, there is a lack of data concerning the issue, and whatever decision you eventually make, you are going to disappoint some group of people. Lastly, such decisions demand a long term perspective, even though there may be a short term band-aid to make the whole thing go away for a while.

So… why do managers fail to provide gutsy leadership when faced with such decisions?

There are a bunch of reasons, such as wanting to avoid conflict, endlessly searching for more information in a vain attempt to make certain their decision is correct , or avoiding a career risk. In many cases it is just plain lack of self confidence or a lack of urgency. Maybe they are trying to protect their turf, knowing full well that their current job would change is they tackle the issue.

These kinds of human behaviors lead to operational complexity as the organization gets more and more bloated and complex, since nobody it being hard on cost and complexity. Even more damaging, it leads to a lack of innovation. Ideas that are distinctive get beaten down and compromise-oriented decision making causes the primary activity to be debating, leading to an ever-increasing number of meetings and massive e-mail overload.

To avoid such situations, you need courageous leadership. In my book titled What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders I outline ten principles that a manager needs to follow to provide the kind of leadership that will generate efficient operations and significant innovation. One of the most important of the ten principles is to staff for success; specifically put your top talent in the key jobs. But… how do you spot top talent?

Here are characteristics I think you should look for:

1) a consistent track record of always meeting goals
2) numerous examples of seizing bright ideas and making them happen
3) a very fast learner with good group and one-on-one communication skills.

It sounds easy, but managers tend to fog this up. They overestimate the value of experience related to the specific job opening. They worry too much about what others will think. Friendships get in the way. They put off the decision and leave the current players in place…hoping for the best.

Let’s go back to the Canon story. In 1995, the board of Canon reached into the organization and picked a consistently strong performer, Fujio Mitarai, to be the new CEO. Mitarai moved fast and with guts. He shut down 7 product divisions, including electric typewriters, and announced that Canon would be in only three businesses: copiers, printers, and cameras; and Canon would become a top global player in each.

His courageous leadership in eliminating struggling efforts, cutting out bureaucracy, exploiting robots in manufacturing, and building up R&D and innovation are legendary. In ten years, he drove Canon’s operating margins to 15%, three times that of other leading consumer electronics firms, and Canon emerged as among the global leaders in copiers, printers, and cameras.

The lesson is clear. Courageous leaders know that top talent makes a huge difference. Put such people in your key jobs.

– Bob Herbold is the former Chief Operating Officer of Microsoft Corporation and the author of three books on leadership. His latest, What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders was released February, 2011 by Wiley/Jossey-Bass. More on the book and Bob’s blog on leadership can be found at www.bobherbold.com.