Who serves who?

It's really hard to generate capacity, focus, and motivation when you are solely trying to serve your own interests.

Focus and motivation require considerable "other" focus if you are going to really get them right.

Even capacity requires as much focus on the people you are leading as on your own goals.

"Leaders" (I use the quotes to refer to people who are in formal leadership positions but aren't really leaders) who focus solely on their own goals often limit the capacity of their people (to hold on to their own power, etc.) and ultimately fail to meet their own goals because of it.

I see that play out at a micro level all the time. A manager or director will have some talented people on his or her team. Those people will get developed to a point to fulfill the manager/director's goals. Often these same managers hoard those people, keep them from moving to other parts of the organization to advance their careers, etc. After a while, the stars burn out and the leader stops meeting his or her goals.

On the other hand, the leaders who try to develop their people, encourage them to move ahead in their careers (even if it means leaving the department or company), and providing a lot of sponsorship, ultimately have success. While they might lose their top people, they wind up with a pipeline of people who want to work for them and strive to succeed. So, in the end, those leaders always have high performing organizations with a high throughput of "star power".

I believe that to really build capacity, focus and motivation you have to be committed to the other people's interests. And that is the coolest part of the model. Because when I become committed to their interest, they start leveraging themselves through me and thus the followers become the leaders.

Leadership, leverage, and exploitation

One reaction I get to my definition of leadership is that, on the surface, it sounds very exploiting. I don't look at it that way.

The idea of leverage is neutral. The outcome of that leverage is what we judge as evil, oppressive, greedy, good, self serving, or heroic. Ghandi leveraged other people's abilities to bring those people to a better place. Hitler leveraged other people's abilities to bring those people as well as a lot of other people to a much worse place. They were both great leaders. That doesn't mean they were both great people or that they both did great things. History judges the result of their leadership, not the leadership itself.

A friend of mine raised the question of whether Ghandi leveraged the Indian people or whether they leveraged him. Her point was a good one.

Ghandi didn't wake up one day and say, "Gee, I'd really like to get these British folks the heck out of here, I wonder if I can convince anyone else that we should do that?" However, like many other people, he had a specific idea and vision for how to make it happen and that is what he was able to rally people around. The difference is that he was able to leverage others to make his idea a reality. He didn't leverage the goal to be independent. A lot of people had that goal. He leveraged the people around his vision for reaching the goal.

That's why I like this way of thinking about leadership. It's about progress, advancing from the present. That's what Ghandi did. He helped them make progress in the fight for independence.

Could the people of India have done it without him. Probably. Someone else would have come along. But that's just the thing...it wouldn't have happened until someone "came along"

They were poised for it but they needed to be mobilized. I've seen a lot of instances on a much smaller scale of teams that are poised and motivated to do great things but never make it. They don't know how to best coordinate their abilities. I don't think there is only one right leader for a given situation like that. But, I do believe there has to be a leader and there has to be followers for progress to occur.

Leverage

The idea of leverage, as I'm using it, has to do with being able to significantly extend your personal ability (output) through others.

That's what leveraging human capital is all about.

If you are a supervisor and have two people working for you, but they basically are producing as much as you could on your own, you aren't leveraged and not a very good leader (this happens). If you are Ghandi and can get millions of people aligned in a peaceful revolution, you are leveraged. Imagine how successful he would have been if he had to apply all of the pressure and convince the British leaders all by himself.

I initially learned this from my own experience combined with reading about great leaders. Earlier in my career, I tried to do everything myself. I had a team, but was heavily involved in the day to day activity of every project. I found that I wasn't having much impact. That's because my impact became limited by the number of hours a day I had to spend on projects.

Then I started to really focus on investing in and growing my team (personally, not in number). I gave people more responsibility and freedom and I tried to provide more coaching and vision instead of a lot of the day to day work. My impact took off.

I was able to start getting my vision implemented because I was able to get pieces of it developed in parallel rather than serially. As I read abort other leaders, I started realizing that was the pattern. What makes a leader a leader is his or her ability to leverage his or her vision/ideas/actions.

A brief primer on leverage in physics, finance, and pharmacies (for those who are interested in more fully understanding the concept of leverage).

Think back to your high school physics class and the definition of a lever.

Suppose that you are trying to lift one end of a really heavy box but are unable to do so. You might put a rock in front of the box, wedge a 2 x 4 under the box and over the rock and push down. That's leverage in the physical sense. What's happened is that the rock and 2 x 4 have allowed you to actually apply more force to the box than your physical capability.

In a financial sense when you invest "on margin" you are leveraging your money. Buying on margin means paying a percentage of the total price for a stock. Essentially, you are responsible for paying the full price of the stock, at some point (and guarantee that via some type of collateral), but the broker lets you buy it at a discounted rate up front. Then if the stock appreciates in value you use the proceeds to pay off the original purchase price but now own the stocks at a higher value. For example:

Suppose you want to buy 10 shares of BillyBob's House of Barbecue. The current share price is $100 so the overall cost would be $1000.

Unfortunately, you only have $1000 to your name and don't want to tie all of it up in this stock.

Your broker lets you buy the shares "on margin" for $10 each for a total cost of $100 ($10 x 10 shares).

You now own $1000 worth of stock for which you paid $100. You also have $900 left to invest elsewhere.

Now suppose that you bought other stocks on margin at the same price with the other $900. That's leveraging your money. You are getting the benefit of having $10,000 worth of investment for just $1,000. (You aren't totally out of the woods, you still owe the $9,000 - but you've been able to invest as if you've had all $10,000.

OK, now for the real power. Imagine that at some point the price of the stocks increases in value by 25%. You now own 100 shares at $125 worth $12,500.

So, you decide to pay back the initial purchase price. You sell off $9,000 worth of stock, pay your margin, and have $3500 left over - a 250% return on your investment. Not bad! Getting a 250% return on a traditional investment of $1,000 is pretty tough.

OK, just for completeness here is the downside. Suppose the market crashes and that instead of being worth $100 per share, each stock is worth $50 per share. Your portfolio is worth $5000 (100 x $50). As often happens in a crash, your broker is losing money so they call your margin (make you pay the balance). You owe them $9,000 but only have a total portfolio of $5000. You wind up $4000 in debt for a return on your investment of -500%. This is why your hear stories of people jumping from buildings when the stock market crashes.

This is oversimplified but you get the point.

Now, let's shift from physics and money to people. Leverage relative to people is getting more output through others than you can get on your own.

A non leadership example would be the ways that pharmacies work now. In the old days if one pharmacist could fill 10 prescriptions a day and your pharmacy sold 20 prescriptions a day you'd hire two pharmacists. This worked pretty well when there were small, mom and pop pharmacies that didn't have a lot of prescriptions. Once the mega pharmacies started coming of age, they quickly realized that a linear payroll cost tied to prescriptions was going to put them out of business. So, they invented the pharmacy tech. The pharm tech performs about a lot of the transactions actions that the pharmacist used to perform - takes order, enters order, deals with insurance issues, fills order, delivers order to patient, rings up order. The pharmacist typically only checks the prescription for interaction issues (although a lot of pharmacy systems do that automatically), confirms that the stuff that the tech put in the bottle is actually the stuff that should be in the bottle, answers patient questions about the medication, etc. They probably also handle the most complex prescriptions.

So, suppose the pharmacist now does 25% of the process. One pharmacist and four techs can have the output of four pharmacists. Given that a pharmacist's salary is considerably higher than that of a tech, you can quickly see where the "leverage" comes in. You can get the output of four pharmacists for considerably less cost.

Of course, just like with the stock market crash, poor leverage with people can also be disastrous. Unless those people are able, focused, and motivated, their output could drop and suddenly you are the owner of a very large, very costly hole in the organization.

What is leadership?

My definition of leadership is actually quite simple. An individual's leadership ability is the difference between what they alone can accomplish and what they can accomplish through others.

Leadership is about leverage. Sometimes that leverage is for the good, sometimes not. But, if you are leveraging yourself you are a leader. The more you are able to leverage, the greater a leader you are.

This definition allows for both Martin Luther King Jr., and Bill Gates to fall within the same category. We can debate the merits of the ends to which both leveraged, but what made both of them leaders is that they are able to accomplish more through others than the rest of us.

So, how do you create leverage?

There are three drivers of leverage: capacity, focus, and motivation. And, these three drivers are multiplicative not additive. A well focused and motivated group of 10 can outperform a poorly focused group of 30. Pizarro, with an army of 169 defeated the Incas who had about 80,000 warriors*.

All three drivers are important yet many people miss the power of the last two. When performance is down, a lot of people try to add capacity: they train people, add more staff, buy more equipment, etc. This generally is the most expensive and most time consuming of the three options. Yet, that is the one that I've seen people go to most often. The great leaders actually know how to build capacity, but they are experts at focus and motivation.

Resources

* For a more complete explanation of how Pizarro used capability, information, and motivation in defeating the Incas, check out Guns, Germs, and Steel by Jarred Diamond)

If being a leader is "good", then is being a follower "bad"?

I've struggled with the notion that you can't define a leader without defining a follower. However, I've come to think of that differently. It is true that you need both. However, I think that the notion of "follower" has turned into something bad. Perhaps it is because of all of the emphasis on becoming a leader. But, being a follower might not be all that bad.

In fact, I like the idea that leader and follower require the other in their definitions to have meaning. It shows a symbiotic relationship. They can't exist without each other.

I think that we need leaders because without them nothing will progress. That's what leaders do. They enable you to progress.

However, leaders can't actually make anything progress without followers. Therefore, the follower is just as important in the equation.

Without leaders I think that people would ultimately just drone on until they became obsolete or extinct. I think this is true at the individual, organization and societal level. On the other hand, without followers, there would be all of these great ideas for what's next with no way of getting there. Inevitably we'd still drone on until we became obsolete or extinct. I guess the main difference is that in the first case we'd fade away quietly and unknowingly whereas in the second case we'd be really frustrated while it happened. But, it would still happen.

I see this playing out in part in the difference between Academe and Business. Academe, in my mind, has mostly leaders. Innovation sometimes takes longer there. Business, however, has leaders and followers so things progress more rapidly. Now, that's not to say that Academe will "drone" on to obsolescence. At a high level, Academe is the big leader and business, as an institution, a follower. Therefore, Academe does continue to progress on a more macro level.

Given this definition, I think that both the leader and the follower play an important role in ensuring progress. I've actually suggested that people need as much training in followership as they do in leadership. Following well is hard. I don't mean the lemur off the cliff type of following. I mean the kind of following that actually does propel us forward.