John Maxwell on Raising Your Level of Leadership

The author of 47 books—including The 360 Degree Leader and The 21 Irrefutable Laws of Leadership—John Maxwell discussed what he terms the five levels of leadership, which are taken from his book Developing the Leader Within You.  (Courtesy of Knowledge@Emory)

Maxwell says it’s easy to tell a company characterized by Level One leadership, the lowest level, where the corporate ethos is this: We’re the boss and you’re not.

“People follow because they have to,” he told students and faculty at Emory University. “If quitting time is 5 p.m., all the desks are cleared at 4:30. At 4:55, employees put on their gym shoes because they want traction. They wouldn’t want to slip on the way out and spend an extra minute there. At 4:59, they’re waiting for the gun to sound, and at 5 o’clock, they’re gone. It’s like a fire drill.

“In an organization high on positional leadership, the employees (think), ‘How little do I have to do, how little do I have to commit, to keep my job?’ ”

By contrast, effective leaders learn and grow, extending their influence and rising to the other leadership levels described by Maxwell:

• Level Two: People follow this type of leader because they want to. Leaders on this level—a quantum leap from Level One—are likeable. Relationships develop; people begin to feel passionate about their work; and energy grows within the company. Employees don’t put on their tennis shoes at 4:55 p.m.
        
• Level Three: People follow because they realize what the leader has done for the organization. Momentum builds. “All leaders know that the most important thing they can do for their company is to create momentum. When you have the ‘Big Mo’ going for you, everything gets easier,” observes Maxwell.
        
• Level Four: People follow because of what the leader has done for them. Such leaders develop the employees around them, which promotes long-term growth. “Loyalty kicks in at this level because you’ve made the people around you better. They’ve become loyal to you.”
        
• Level Five: People follow because of who the leader is and what he or she represents. Leaders on this level have spent years developing employees and building the organization. “Go through the first four levels and one day—guess what? —your people will put you on Level Five.”

Trouble is, many bosses never advance beyond Level One.

“Nothing wrong with it, just that it’s the lowest level,” says Maxwell. “What’s amazing is that nine out of 10 people think it’s the ultimate level. Many people get to this level and think, ‘OK, now I’m a leader.’ But that doesn’t make you a leader, it just means that you have a leadership position. The position doesn’t make the leader, the leader makes the position. If you have to tell the people in your group that you’re the leader, you’re not.”


“I came to the conclusion that people can do four things well and be highly successful, regardless of what their career would be,” says Maxwell.

Namely, successful people get along well with others; develop teamwork in the organization; maintain a good attitude, especially in the face of adversity; and lead effectively.

“People won’t go along with you unless they get along with you,” notes Maxwell. “Every one of you has worked in an environment where relationships were not what they should or could be. People lead people, not companies. When there’s a change and transition within a company, it’s almost always a people issue. After a while, they say, ‘Hey, I don’t need to work in this kind of environment.’ ”

Indeed, the ability to connect with people is absolutely critical to a leader’s success, he says. “Very few times do you see a highly successful person who has made a habit out of having bad relationships. Interestingly enough, I have three degrees, but I’ve never had a course in how to understand people.”

In addition, successful people are able to overcome adversity, often experiencing financial difficulties — even bankruptcy — before hitting their stride, he notes. “They have all kinds of issues in life. Anybody can have a great attitude on a good day, but (what counts) is when you’re in a corner and have to think creatively. The greatest gap between successful and unsuccessful people is the thinking gap.”

Added Maxwell, “Attitude isn’t everything—it won’t substitute for competence—but it’s the most important thing in your life. Successful people have a (good) attitude, especially about adversity, that really sets them apart.”

Maxwell cited two laws from his book The 21 Irrefutable Laws of Leadership. The Law of the Lid states that leadership ability determines a person’s effectiveness. The Law of Influence holds that influence is the true measure of leadership.

“Your business isn’t going to grow beyond your leadership (skills),” says the Amazon.com Hall of Fame author, whose books have sold over 12 million copies. “Leadership is influence, nothing more, nothing less. The person who has the most influence within a given group at a given time is the true leader of the pack.”

A corporate executive once asked Maxwell for help in resolving a ticklish dilemma. Three employees were in the running for a leadership position. Which one to pick?

Replied Maxwell, “Put all three in some community volunteer project, where people don’t have to follow them. In six months you’ll know who your best leader is because the leader will be the one who can get people to follow who don’t have to follow.”

Maxwell says leaders need to grow and develop themselves, so they can then develop the people in their organization. To do this, they must understand what it is that their employees value.

Developing an employee’s strengths and not correcting his or her weaknesses is a good place to start, Maxwell says. Even with great effort, he adds, someone lacking in talent in a given area can become only average at best. “Nobody wants to pay for average. When you’re developing people, find their strength zone and develop that.”

To add value to people, leaders must first value them, he says. “The Achilles heel of most leaders is that they don’t value people like they should. The first sign is when they start manipulating them—moving people for (the leader’s) own advantage —which is always wrong.”

Building teams and developing the people around them, is the essence of leadership, adds Maxwell. “They understand that the only way you can compound influence is to put a team together. One is too small a number to achieve greatness. To make an impact, you have to do it with other people—through partnerships, relationships and team-building.”

That Certain Special Something...

As I’ve said many times before, ‘customer satisfaction’ is not my favorite term. It implies that your goal is for people to walk away feeling ‘OK’, but not amazed… Satisfied, but not so excited they want to tell all their friends. If you really want to take a leap to the next level I urge you to go for the ‘wow factor’ and look beyond simple satisfaction.

The Virgin Group, launched 40 years ago by Sir Richard Branson, has become one of he most powerful and iconic organizations on the face of the earth by adhering to one simple principle – let’s give the customer some FUN! That lighthearted commitment to joy and unparalleled quality, as well as the less tangible elements of surprise and genuine concern for people, helped Virgin hit $1 billion in sales faster than any other company ever launched.


How can you leverage the ‘wow factor’ to build your own business? Understand a few basic principles and you’re well on your way:

Mediocrity is bad. The middle of the pack can seem like a safe place to be. You play off of your competitors, mimic other products and services, match your pricing to the market and try not to stand out. The problem with that strategy is that customers won’t see you as any different from the next guy. They won’t pay attention to your brand, respond to your promotions or tell other people about you. Today’s competitive climate is fierce, and if you choose to play it safe and accept mediocrity someone more memorable will easily edge you out.

What you like doesn’t matter – what your customer likes does! Most business owners get hung up on their own agenda and preferences. It’s human nature… ‘I love the color fuchsia –let’s use that!’… ‘Who wouldn’t want a lipstick dispenser in their car?’… ‘We all shop online so a retail presence is pointless.’ Take the time to get to know your customer intimately and to give them what they want. Go a step farther and think beyond their conscious desires to create amazing experiences and exemplary products that they would never even have thought of.

Take the ‘wow factor’ to the front lines. If you know and adhere to your customer commitment religiously and your staff, distributors and vendors don’t, you’re setting yourself up to fail. In order to create a truly stellar customer experience, you have to pull everyone into the vision. From the receptionist who answers your phone, to the sales staff, to the retail clerk, to your distribution channels… everyone has to understand the power of ‘wow’ and work hard to exceed customer expectations. At the end of the day, companies are just big groups of people working together towards a common aim. Make sure your team is all about ‘wow’!

Respect the value of loyalty. All a business really has to bank on is its customer base. You may have intellectual property you’ve created, but if no one buys it - who cares? You may have a highly educated staff, but if they can’t make money and you can’t pay them – who cares? You may have a beautiful facility, but if no ones comes in – who cares? Your customers are the lifeblood of your business and everything you do must revolve around their experience with you. Share your vision with customers. Communicate with them. Offer opportunities to interact. And never, ever break your brand promises.

Quantify the promotional power of ‘wow’. That certain special something you create is a very valuable commodity in your business world. Competitors can copy your products, offer similar services, mimic your ads and raise more capital, but the one thing they can never steal from you is your ability to deliver an exceptional experience to your customers every time. They cannot usurp your relationship with people who are passionate about your brand. The ‘wow factor’ negates the need to pay a pretty penny for marketing, it keeps your staff happy, it helps you innovate without endless investment in R&D, it keeps people coming back and talking about you. Make no mistake… wow is not fluff – wow is priceless.

The Enlightenment of Richard Branson

By: Alan Deutschman

In a world where companies routinely bedevil customers, the Virgin chief is an angel, because he truly puts customers first.

Sir Richard Branson still remembers how he was first received by the establishment powers when he started Virgin Atlantic Airways 22 years ago. "The head of American Airlines said, 'What does Richard Branson know about the airline business? He comes from the entertainment business.' But that was exactly what the airline business needed."

He has been right, of course. With the exception of Southwest, all of the look-alike U.S. carriers wound up filing for bankruptcy or going belly up. Meanwhile, Virgin, with its fun-loving flight attendants who seem to be hosting a party, is still thriving.

What Branson understood two decades ago is just now beginning to be embraced by other corporate leaders: We should be having fun when we're spending our money. In a sense, Branson has never left the entertainment business, and that's why he's kicking off our third annual Customers First awards. As his empire has expanded - from a recording label and a chain of music stores to what became his fiercest passion, airlines, as well as an astonishing array of some 200 other eclectic ventures worldwide--his method has remained the same. He takes on intransigent industries that treat customers inexplicably badly and shows that he can offer not only a better deal but a truly entertaining experience. The approach has made Sir Richard a multibillionaire and Virgin a beloved brand--as well as a $10 billion-a-year operation.

Throughout Virgin's history, many of its most propitious ideas, small and large, have sprung from Branson's wants and needs as a customer himself. "The reason I went into business originally," he says, "was not because I thought that I could make a lot of money, but because the experiences I had personally with businesses were dire and I wanted to create an experience that I and my friends could enjoy."

On one trip, he recalls, "I wanted to talk to the pretty girl in the next aisle, but I was stuck in my seat the entire flight." Branson's frustration inspired him to introduce stand-up bars in Virgin's cabins. After his wife's manicurist suggested offering nail treatments and massages onboard, Branson didn't bother with market research. "Sounds like a great idea," he said. "Screw it, let's do it." Now Virgin has 700 therapists on staff.

Putting customers first is hard in a corporate environment that understands only cost, efficiency, and business as it has always been done. That was the case when Branson thought flyers would love seatback video screens that would let them pick the movies they wanted to see onboard rather than having to wait for whatever film the airline had picked. "Seatback videos are complicated, expensive things to do," he recalls. "The cost was around $8 million, and the airline was quite stretched at the time. I went to the bank, and they wouldn't give us the money. So I rang up the head of Boeing and said that we wanted to order some new 747s and could he give us seatback videos, and he said yes. We were able to borrow $2 billion to buy a new fleet of planes, but not $8 million for seatback videos."

Airlines are not the only industry where the big players exist in a weird state of mediocre parity because they put their own interests ahead of their customers'. Virgin Active, Branson's European chain of health clubs, lets members pay when they go rather than locking them up with a contract. Similarly, in the mobile-phone business, Virgin Mobile USA has attracted 4 million customers by offering prepaid cards mainly to young people who couldn't afford costly long-term service plans. The lesson: Don't rip people off, and they'll happily stay your customer.

A lot of executives consistently do what's easiest or cheapest for the business rather than the people paying the freight. Branson offers an alternative: Take a look at your business and ask yourself, "Is this how I would want to be treated if I were the customer?"

Correction: This article incorrectly implied that all the traditional major U.S. airlines have filed for bankruptcy or gone "belly up." American Airlines has done neither.

 

Can Marshmallows Predict Success?

Courtesy of www.sybervision.com, this study shows an amazing link between children's ability to delay gratification and their future success in the adult world.

Stanford University psychology researcher Michael Mischel demonstrated how important self-discipline (the ability to delay immediate gratification in exchange for long term goal achievement) is to lifelong success? In a longitudinal study which began in the 1960s, he offered hungry 4-year-olds a marshmallow, but told them that if they could wait for the experimenter to return after running an errand, they could have two marshmallows.

Those who could wait the fifteen or twenty minutes for the experimenter to return would be demonstrating the ability to delay gratification and control impulse.

About one-third of of the children grabbed the single marshmallow right away while some waited a little longer, and about one-third were able to wait 15 or 20 minutes for the researcher to return.

Years later when the children graduated from high school, the differences between the two groups were dramatic: the resisters were more positive, self-motivating, persistent in the face of difficulties, and able to delay gratification in pursuit of their goals. They had the habits of successful people which resulted in more successful marriages, higher incomes, greater career satisfaction, better health, and more fulfilling lives than most of the population.

Those having grabbed the marshmallow were more troubled, stubborn and indecisive, mistrustful, less self-confident, and still could not put off gratification. They had trouble subordinating immediate impulses to achieve long-range goals. When it was time to study for the big test, they tended to get distracted into doing activities that brought instant gratification This impulse followed them throughout their lives and resulted in unsuccessful marriages, low job satisfaction and income, bad health, and frustrating lives.

Create a Leadership & Accountability Culture

Eventually a growing company will expand beyond your ability to reach personally into every corner and crevice. In order to grow a business you have to build systems and mentor leaders, so that you can maintain your focus on the bigger picture. This article will help you create an organizational culture that raises up great leaders, rewards results, and makes it easy for people to do their jobs.

A one person company requires little management beyond self-discipline. A 5 person company is obviously much more complicated. And the need for leadership and accountability increases as the numbers rise.

A 10 person company is less complex to manage than a 25 person company, and a 25 person organization is less complex than a 50 person firm. With growth comes the demand for additional structure and an expanding ability to cope with people issues. At the same time, too much complexity will stifle growth unless it is effectively introduced and embraced.

Strong leadership and building a culture of accountability are both crucial elements to increasing your company’s capacity for growth.

“Leadership,” writes expert Peter Drucker, “is helping organization members see a bright and exciting future and collectively work toward it. It is the role of visionary, coach, cheerleader, pilot and listener all rolled into one.”

Bottom line… you have to champion the values, attitudes and behaviors you want to see in your team. People will do what you do – not what you tell them to do. Learn to act as the guiding star that motivates them to keep moving forward, accept more responsibility and improve their skills. And don’t be afraid to take on the role of advisor and ‘great encourager’ for everyone below you.

Once you’ve anchored yourself as a great leader and earned the respect and following of your staff, you can systematically implement a clear accountability structure that will sustain itself.

It is estimated that lack of accountability costs U.S. companies billions of dollars each year. The research also says that the majority of employees (85%) come to work each day wanting to be accountable. But only 45% continue to feel that way throughout the entire day.

So why the disconnect between employees intentions and the reality of the workplace? Building accountability in any work environment is a systems effort. It requires a clear definition of accountability that everyone agrees on, adherence to high performance, and a team mentality.

Five Critical Building Blocks of Accountability

1. Establish clear direction. Without a carefully crafted business strategy, you are essentially flying blind. A well thought out strategy enables you to properly allocate resources and clearly communicate your plans to employees, customers and other stakeholders.
2. Align people, process, and systems. Strategic alignment provides the ability to focus - through common processes, procedures and operating principles - toward the fulfillment of group objectives. It sounds complicated, but it really involves careful planning and coordination. Just think if each member of a precision marching band had a different idea of how to move across the field, or a different tune they wanted to play. You would have chaos and noise. Aligned, with everyone marching in the same direction and playing together, a precision marching band is a joy to watch.
3. Engage your staff. A study by ISR found that companies with high employee engagement improved 19.2% whiles companies with low engagement levels declined 32.7% over a one year period. People want to be involved in something bigger than themselves. You must allow group participation in decision-making and value staff input. Hire people who fit with your culture, know your vision, and have proven to be high-performers.
4. Lead the way. This one is obvious. Follow through on the demands you make of others. Exhibit the habits and traits you want to see in your employees. And when you make a misstep – admit it and openly return to accountability so that honesty and responsibility become the standard for everyone.
5. Monitor progress and evaluate results. Accountability by its very nature requires people to have ongoing information about their performance. And your initiatives will have no teeth if clear consequences and rewards are not attached to results. Be sure to support your staff and regularly review their results with them. Make life really wonderful for passionate, committed people who are willing to accept responsibility for their work - and make sure that lack of accountability is a bad place to be.

In an accountable workplace an "execution mentality" prevails. Activities, plans and effort are not enough. Instead, there must be an emphasis on measurable results and a ‘get-it-done’ attitude that is endorsed by everyone. People are expected to step up to challenges and they are given the guidance, tools and information to do so effectively.

By following these simple tips, you can enable your company to expand and grow while maintaining teamwork and high standards... as well as your sanity!

The Triumph of Web 2.5

The well-deserved success of Mint.com, and what other Web businesses can learn from it.

Courtesy of Newsweek

By Daniel Gross

Sep 18, 2009 | Updated: 5:20  p.m. ET Sep 18, 2009

Earlier this week, Intuit, the software company that owns the popular personal-finance software programs Quicken and TurboTax, agreed to pay $170 million in cash for Mint.com, a two-year-old startup whose free tools allow chastened customers to manage their personal finances online. Some critics, such as Web entrepreneur Jason Fried, view the deal as a defeat for upstarts: A wounded incumbent that charges hefty fees for its services is taking out a free competitor for a relatively small sum and increasing its market power. (Last year, Slate's "Shopping" column tabbedQuicken.com and Mint.com as the best online tools for keeping track of personal finances.) But the all-cash deal, which will provide a hefty payday for the company's founders and venture capital investors, represents a triumph of a new business model. Indeed, the sale of Mint.com may be the first big payoff for a Web 2.5 company.

The first generation of dot-coms burned through cash rapidly because they had to spend a lot of money building and running their businesses—marketing and advertising to get the word out, not to mention software, consultants, and programmers to run online systems and analyze the results. Thanks to Web 2.0, many of these costs have plummeted. Many of the basics are now essentially free, which means a business built on the infrastructure laid down by the first two generations of Web companies can gain scale on a shoestring budget, all while giving away its products and services for free. Call it Web 2.5.

Yesterday, at a panel I moderated in San Francisco, Donna Wells, Mint.com's chief marketing officer, stunned a room full of digital marketing pros by noting that she really didn't have much of a marketing budget. Mint.com has gone from zero to 1.5 million users in two years with no ad campaign, save a mid-five-figures sum spent on search engine terms. Rather than purchase traffic, it has pursued the same type of strategy that food trucks and online magazines do: Using free social media and piggybacking on popular new communications technology. Mint.com has more than 36,000 Facebook fans and 19,000 Twitter followers, a well-trafficked blog, and a popular iPhone application.

Mint.com, which advises customers on how to pinch pennies, does some penny-pinching of its own. It uses Wordpress (free) to run its Web site and blog. To analyze traffic partners, conversion rates, and other essentials of an online business that generates its revenues through lead generation, it uses Google analytics (free and sufficiently simple that Wells' marketing staff can use it without the help of software experts). Wells referred to a bunch of other services it uses to keep tabs on its site, such as ClickTale and Crazy Egg and Compete, as "virtually free"—costing a few hundred dollars a month. Mint.com's main market research tool is Zoomerang, which helps companies conduct online surveys and collect user feedback. The cost: about $700 per year.

Mint.com has benefitted from a cultural shift as well as a technological one. During the free-spending housing bubble, a Web site that encouraged people to manage spending, comparison-shop, and save was definitely out of step with the prevailing mood. But once the financial and housing markets tanked and the nation went into recession, the zeitgeist shifted. Shrinking top lines have caused people to focus on the bottom line, and the savings rate has spiked. Third homes and luxury goods are out; coupons and growing your own vegetables are in. Saving is the new borrowing. Thus considered, Mint.com, which launched in September 2007, timed the market perfectly. It hit the Web at a time when more Americans suddenly had the time, inclination, and motivation to manage their financial affairs more prudently. And it gave them a way to do it without having to spend a dime.

© 2009

Stand vs. Position

This weekend I attended a fund-raising seminar with Lynne Twist for a non-profit that I serve on the Board of (www.theothersideofeverest.org). One of the most illuminating points she made was the difference between taking a stand and taking a position.  I believe that this principle applies to business every bit as much as to money... so enjoy!  (www.soulofmoney.com)

"Great leaders know the distinction between taking a position and taking a stand.  Taking a stand creates a field where all positions are heard and respected and truth begins to have room to be expressed.  Archimedes said, 'Give me a place to stand and I can move the world.'" Lynne Twist

The very nature of taking a position invites opposition - and who wants that?  That's because a position is an opinion, an item of debate, a battle in the making.  A stand, however, is very different.  It can be nothing but positive - transcending simple arguments or opinions and coming from deep within.  Because it is a reaction to nothing, nothing can react to it.  A true stand based on character and deep belief is so honorable that whether you agree with the stand or not, you have to respect it.  Standtakers derive their power not from authority or influence or logic, but from pure authenticity.

The Democratic and Republican parties have positions on many issues, and those positions invite opposition and create strife and disagreement. Ghandi, Martin Luther King, Mother Theresa, Nelson Mandela... standtakers all.  And because their simple desire to make the world a better place contended with no one - no one could contend with them.

In business, it's easy to get lost in the competition and stress of day-to-day operations and forget about the big picture.  Why are you in business?  What do you stand for as human being?  What impact do you want to make on the world?  What are you committed to for your whole life and beyond? 

Even small companies can stand for something so authentic and powerful that people are compelled to sit up and take notice.  If your personal stand cannot find it's way into your professional life, the contradiction will suck the joy and impact out of everything you do.  Find your common ground and take a stand in your business so that work and mission are beautifully blended into something larger than just you.  By taking a stand for something that matters, a person or an organization can elevate itself above the fray... see everything, be seen and coexist.

I encourage you today to examine your life and decide what you truly stand for.  We live in the greatest age of opportunity and challenge that the world has ever known.  Positions will not guide us successfully into the future; however, if we all take an honest stand for what really matters, we might just have a chance.