Rosabeth Moss Kanter is one of my most favorite management thought leaders.  In her new book “SuperCorp”, she argues that capitalism is near a crossroads.  The old way of doing business no longer works.  Traditional leadership roles are breaking down.  The time is ripe for a new corporate model, driven by a new type of business leader, where creating business value also means creating value for society.  There are “vanguard” organizations all over the spectrum that are adopting this view.  Vanguard means ahead of the pack, the leaders, the ones who show the way.  In this case they are leading the parade toward being values-based, led by principles and by the sense of purpose at the heart of the enterprise.  They are dealing with the crisis of capitalism by offering a new and different model.

Recently I was able to spend some time thinking about leadership.  My thoughts were mostly provoked by many of my clients, who consistently identify a widening leadership gap that exists in their organizations.  Surprisingly, I have uncovered that most organizations that need new leaders are unable to clearly articulate the kinds of qualities that they are looking for in these individuals.  Instead of scanning through piles of available employee survey data, I decided to provide a personal reflection on the very caliber, capacity, merit and spirit that I am looking for in a true “leader 2.0”.  Are you ready? This, ladies and gentlemen, comes from the heart…

First and foremost, in a vanguard company, leaders instill a strong sense of purpose into their team.  There have been signs for the last 10 or more years that the companies that were going to succeed and prosper needed to manage risks better, have a stronger sense of purpose to motivate their employees, and satisfy a public already agitated about scandals such as Enron in the corporate world.  Good example is In Brazil.  Banco Real has grown in 10 years from a small behind-the-pack bank to the second largest and probably the most highly admired bank.  They differentiated themselves in the marketplace by centering their strategy around social and environmental responsibility.  Leading with a sense of purpose was key to their success and their competitors are not trying to copy their management model.  It is amazing how much we can accomplish by simply inspiring our organizations to believe in a calling – one employee at a time!  How do you inspire, you might ask?  It’s not the words – it’s the conversations that matter.  Leaders must engage employees broadly in discussions of what these principles should be and how they apply.  In the new world of strategy, nothing happens without a buy-in!  Sam Palmisano, as a fairly new CEO at IBM, led a conversation in which all 400,000 employees could participate in a web chat over three days about what the company’s values should be for the 21st century -  a “values jam.”

A.G. Laffley, the chairman of Procter & Gamble, and Bob McDonald, now the CEO, would go around the world and talk about P&G’s “PVP”, or Purpose, Values, and Principles.  Bob McDonald announced in August that P&G’s growth strategy for the future is “purpose-inspired growth”.   Decisions get made in the company that can be tied back to the purpose—that is, you can see that the company makes decisions that would not have been made been made on purely financial grounds.  It’s like P&G’s Children’s Safe Drinking Water program. When P&G could not make a commercial market out of water purification powder, it created a nonprofit and gave it away. That told P&G employees that their company is serious about serving society.

One could take away from this that leaders must contribute to compelling mission statements and that those statements in itself will solve the problem.  Wrong!  Many companies have a mission statement or statement of principles. The words sound pretty much the same. They have something about customers, something about employees, something about shareholders. But the words (in vanguard companies) are a little different – they don’t just talk about creating great value.  The statement of values will address looking broadly outside the company to the needs of society. One of IBM’s values from its Values Jam chat was “Innovation that matters for our company and the world”.  The addition of those words “and the world” opened the walls of the company. There are IBM employees I’ve interviewed all over the world who actually invoke that phrase in conversations. They say, “I look at what my community or state or country needs, and ask how the capabilities of the company can contribute to that.”  P&G’s statement of purpose says they “improve the lives of the world’s consumers”.  More recently they added “now and for generations to come”.  Adding these words focused people on the long-term impact, so disposable products need to be more environmentally friendly.   Again, it’s not the words, it’s the conversation.

So, are you a vanguard leader?  And is there any other leadership that truly matters today?

Tags: connected corporate community, innovation, leadership, talent management