How do you create a leading up culture?
Leading up is taking the skills required for downward leadership and turning them upside down. So if downward leadership puts a premium on communicating strategically and acting decisively, leading up sees the people who are subordinates apply those same skill sets to the people above.
In creating a culture of leading up, the first step is just an act of will on your own part to engage in upward leadership with the people above you. In my view, you just have to decide to do it and then do it. You need to be courageous in taking it on and you need to be mindful of the fact that some bosses aren’t going to be prepared to let you do it. But taking that as a kind of boundary condition…and this is a calling in my view…you just have to decide that this is why you’re here. You’ve got to take this notion of upward leadership to heart.
Now for the people below you, you want them to do the same thing of course vis-à-vis yourself. For that to happen, you have to be very encouraging of such measures on their part. So you don’t want to cut them off at the knees if they have a critical suggestion. You need to explicitly draw them out even though they may be shy about expressing themselves or a little bit intimidated by your status or your power over them. It is a matter of preparing a mindset, of creating a culture that simply tells people with a good idea to have everybody take their great notions and their new insights to the people above them before it’s too late. In a period of uncertainty, that’s extremely important.
What is the biggest mistake that CEOs commonly make in managing uncertainty?
I don’t know if there is a common mistake, but there certainly are pitfalls. Number one would be CEOs failure to appreciate just how important their actions as a leader are. If the environment is uncertain, you’ve really got to step up to the plate. A lot of people underestimate how important their presence and leadership are in such a time.
Number two is that you must anticipate that the uncertainty will intensify. You must prepare to manage it. For example, you may want to simplify your plans, or at least create scenarios and work up your strategic planning by making fewer assumptions.
I think you’ve also just got to be quicker to change. In fact, some companies have given up long-term strategic planning on the discovery that it doesn’t do much good because they really do have to revise their plan so often.
The third element under this basic idea of preparing for uncertainty is that you’ve got to become more explicit about your plan and intentions, and communicate that to everybody, so that when things go a little haywire, everybody out there has a pretty good fix on what to do.
For example, consider Verizon, the phone company that lost only lost 3 people in the collapse of the World Trade Centre. Top management had been long stressing the company’s values and the basic purpose of their agenda. When things went nuts in those early hours on September 11, you had 2,500 employees who were ready to act without having to really ask the boss. They already knew what to do and they did it. They worked like crazy to restore service and they did.
You must also work really hard to reduce the uncertainty to the extent that you can. In the first instance, that means having great real-time data on what the world around you is doing. In the second instance, it’s a matter of putting in place people and methods to determine what the data mean for your stakeholders and competitors. Thirdly, you must force yourself to become decentred. You need to view the world not only from your own footprint but also from the shoes of other groups on whom you’re a little bit dependent or reliant. You need to appreciate what they are thinking, what their likely response will be. So, decentring helps you reduce uncertainty because you have a better fix if you think about what the world around you is doing and what responses others may have when you make your own moves.
Uncertainty calls on a CEO to manage various stakeholders somewhat differently than in a time of certainty. What must a CEO do to manage, first, employees, and then shareholders, in uncertainty?
I’d certainly take them both on because I think it’s a nice example of the critical combination anybody needs to lead down and up at the same time. Down, in this case, means working very effectively with employees, and leading up in this case means working very effectively with your ultimate boss, the stockholders of the company. In fact, a side note on that: Your ability to be effective with your employees partly depends on how good you are in leading up with your stockholders, and how good you are with your stockholders depends in part on how effective you are in mobilizing and aligning all those people who work for you. So there’s a kind of a synergy between leading up and leading down.
To lead effectively, you have to be much more tolerant of working with uncertainty. You need to be better prepared for living with ambiguity and making decisions with far less certainty in your own mind.
You’ve also got to be quicker to make decisions that affect both stockholders and employees. You effectively have to be more decisive with greater uncertainty. You also need to be extremely steady yourself, at least outwardly. If it looks like there’s high anxiety, even signs of panic on your part, everybody around you will panic. So, remaining cool and confident without being overly optimistic is absolutely key.
The second thing I would stress is to take measures to instill calm and confidence in the future among everybody on the Street and in your company’s corridors. With the Street, you can do that with the 20 analysts that follow the company and maybe the 15 or 20 biggest stockholders. It’s harder to be that personal with employees, but a video conference or an all-hands meeting where you get everybody together in a large venue is a very good idea.
As chance would have it, last night I was in a room with a bunch of chief executives talking through some of their experiences after September 11, and one made exactly this point. In the hours after September 11 he made a valiant effort to be in front of as many people as possible through email, through memos, through personal visits—to provide that sense of security, a sense of confidence that the company and everybody who works for it would get through it and the shareholders won’t suffer ultimately for it.
How do you sustain your belief in a particular strategy in a time of deep uncertainty?
Even before you have a strategy, you need to have in place an underlying vision and the principles that describe who you are and what you stand for, the unshakable, enduring concepts that really define everything about you and your company. One company that has long put a premium on that is Johnson & Johnson. It has what is famously called its credo, and in five paragraphs it has set forth in very general terms the basic operating principles that J&J has followed through thick and thin. The credo was in place during the Tylenol crisis during the early ‘80s, and it has remained unchanged through more recent recalls. The company has insisted that everybody really focus on it to ensure that the basic underlying values and principles are understood by all.
Having said that, the obvious thing that anybody in a responsible position has to do is have a pretty good strategy for getting from here to there. In a pretty fast- moving or unpredictable market, the strategy has to be an evolving one, a kind of a living strategy. That in turn puts a premium on concepts such as upward leadership, where the people below you who have a feel for the market or touch the customer have their own kind of front-line appreciation for what’s changing out there. They are very quick to let you know about that; they are kind of leading up in that sense. Thus, you’re prepared to make those shifts quickly. And coming back to uncertainty, you must view your strategy as constantly evolving, because whatever the market is today, it’s probably going to be somewhat different tomorrow.