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"What makes a great leader?" Episode 132

with Don Schmincke

“What makes a great leader?” with Don Schmincke Episode 132

What makes a great leader is the topic of today's episode and our guest is Don Schmincke, the renowned organizational strategic development consultant.

Don is a former MIT and Johns Hopkins Institute researcher turned organizational, strategic development consultant and known as the guy that CEOs bring in when the experts fail. Don has written two best-selling management books “High Altitude Leadership” and “Code of the Executive”. He is an in-demand speaker with an impressive roster of clients. In this interview, Don and I will discuss what makes a great leader.

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Highlights from Episode 132: “What Makes A Great Leader” with Don Schmincke

How does an MIT planetary physicist end up training CEOs?

It was a long, unusual journey. I began doing a lot of different things when I was at MIT. Planetary physics was fascinating to me as I looked at how things develop in the universe. But I got involved with some biomedical engineering and ended up automating the Harvard MIT biomedical lab. This is when I got interested in humans and humans became more fascinating to me.

When I ended up at Johns Hopkins, I did my graduate work there and I started looking at human corporate behaviors and how we organize. That’s when I ran into a lot of CEOs who were complaining about high failure rates and management theory. I began doing some research on that and discovered they were right. There are four million scholarly papers published on things not working out.

I was asked to research this to see if there could be some biological components to it, like how our species evolves, why do you lead the way we do? And I thought it was a fascinating study, I had such a ball doing that, I pulled together some anthropologists and archaeologists and evolutionary geneticist and we discovered some amazing things and then I started teaching that and they loved it.

Then they started seeing their sales grow two or three times in their companies. With revenues increasing and performance increasing, they asked me to write some books and start lecturing. So today, that’s what I do a lot of, we work with companies now, using these models that are somewhat unusual but they seem to produce results. It’s how I got here.

Can you give me an example of those failures and how you’re able to turn them around and implement them into the C-Suite?

There has been an interesting series of publications around this one. The one guy that got me started with Mike Beer who’s published the Harvard Business Review paper “Why Change Programs Don’t Produce Change”. There’s a bunch of case studies in that area. Then Pascal at Stanford University published some interesting research years ago on the life cycle trends of these management theories. Then there is this graph where you just see the birth and death of all of these theories as they hit us.

When I started looking at that I was wondering why would so many things not transfer? Why would a great idea not transfer into action? Why would there be so much frustration in the organizations by the next new change theory or the next thing management theory? When we were doing our research I just ran into a lot of employees who just couldn’t wait for their boss to read a new book.

We started doing a lot of autopsies on dead companies. I was doing research with NBC, for my K2 book with Chris, my co-author. We were studying humans and deaths in extreme environments. As he was pulling the dead off of mountains, they were all clutching at tools. And when I was studying the autopsies of dead companies, I saw them clutching their tools, as well. You know, they all have their quality programs, their CRM and sales programs, and their culture change programs. And they had all the stuff, but they were dead. I was curious as to why do we die with so many tools around us and that’s what started the journey and we discovered some fascinating things. Here we are today.

How did you analyze all that information employees gave you? What results did you come up with?

When we stopped studying successes because every year, we have these great company books, and we have the list of all these great companies. What I noticed is that the list they had in these books ended up changing in about 18 or 36 months. I was curious. Why these great company books had a list that wasn’t that great after few years?

In researching that and doing the autopsies, we found out that what we’re selling each other are tools for getting better results in our companies. But people, as I mentioned before, were dying when they were grasping the tools? What was missing? What we found out was missing is we throw a lot of tools at our problem, but if it fails to alter human behavior or human decision, it’s been a waste of time.

That’s when I began to work with about, 15,000 CEOs, to sort of look at all these problems and issues, you’re trying to address. Does it really come down to human decisions? In other words, can every executive’s problem be that the humans that they’re trying to lead aren’t making the decisions that they would want them to make? If everybody made the decisions we wanted them to make, we would have a lot happier time and not have a lot of issues in our companies, but they don’t, they make different decisions. They have different behaviors. This misalignment of decisions and behaviors to what we want was really causing the chronic problem.

We went in to look at how do CEOs alter the decisions of their humans. We started looking at CEOs like Alexander, Cleopatra, Gandhi, Hannibal, Caesar, Genghis Khan, because some of these CEOs dominated the world in their lifetime. We began to see is that the great leaders altered the beliefs of their humans. It’s the one course that we don’t teach in our business schools, that we don’t have in our best-selling books: how we altered the beliefs of human? We began doing a lot of research and that made all the difference: that turned the 90% failure rates to 99% success rate, that turned the sales higher.

That’s what I do now. We train about 700 CEOs a year in these techniques. And then we work with dozens of companies in making it happen. It is a fascinating journey because we never really knew that – at least it wasn’t obvious to us – that belief management is the missing link and that explains why we’re publishing 35,000 business books every year, but we’re not getting the level of results we want. It’s not shifting that.

Is there a consistent theme throughout history that you can pull through today and pinpoint one big failure or gap?

The one gap, and there are a lot of gaps that come to mind, especially today is a lot of companies today don’t do the patterns or they don’t consistently anyway that we saw throughout history. In other words, the winning organizations always had a strategy for winning and they made all their decisions around executing that strategy.

Today we talk about culture change, we talk about structure, we talk about sales strategies, we talk about all these things. But when we get to look at, well “What’s the strategy for winning?”, a lot of times that’s an empty conversation. Because they can’t answer. In other words, we get seduced by having plans that are more tactical than strategic.

That was one of the reasons we found the high failure rates to strategic planning and it’s mostly designed around analytics. So, we have all these analytical models and SWOT analysis and market analysis, and this and that analysis, but when we looked at how does a company start off violate expert opinion, violate what the thought leaders say they should do. And yet they end up dominating their markets in their lifetime, very rapidly.

That was a question that I struggle with. So I’m sure a lot of your viewers have seen this happening, a company come in, violates everything that everybody’s doing, and ends up dominating the market within the next 10 years? It’s a very good question. What we found out was that everybody’s doing strategic planning wrong, their analytical planning versus using intuition. Because the ones that can outmaneuver or out-intuit their enemies seem to be the ones that dominate the field.

This was an amazing breakthrough. We ended up changing how strategic planning is conducted and it ended up working. I think we kind of lost that. I think we in “High Altitude Leadership” when my co-author Chris was pulling the dead and they were clutching their tools, I think we grabbed onto the tool of analytics and we forget that all this going to get us is maybe parity or just catching up.

This does not allow us to leap ahead and that’s why we realized we couldn’t use industry experts anymore for strategy because experts only know what is already known and that doesn’t help because the ones that win steamed outmaneuver what the experts know. That was interesting but once the strategy was clear and the company had it, it was much easier to answer the other questions. What culture do we need? What structures should we have in this organization? How do we do our planning and execution? How do we message who we are to our people and markets? All those things got easier to address.

In your book, you refer to the samurai, as a great example of being great leaders and very consistent for thousands of years, as well as a group. How much do those kinds of samurai insights help influence our CEOs and leaders of today? How can we apply the ancient practices to our modern ways of doing things?

That’s a good question because back in the ’90s when we began experimenting with this, the samurai did have the strategic mindset. In fact, there’s a great quote, that goes something like: “When you leave your gate in the morning, act as though an enemy were in sight”. I thought that was interesting. Wouldn’t it be great if the management team thought like that? When they showed up strategically thinking, constantly, about you know, who the enemy is, and do we have the right enemy identified and how do we have a new rhythm?

That innovative thinking process was part of that day-to-day work versus just showing up and just doing work, then going home. That was one of the elements, but I think the more important element when we started looking at this research, because it, this came out, Oxford University gave me the permission to use this ancient manuscript, and I was able to go through and see how were they thinking, and try to reorganize this, so we can apply it today.

One of the elements I found out was that a lot of companies have so much wasted time and dysfunctional behavior. But what I mean is that, well, you’re probably heard of a very popular comedy show which was “The Office”. That was one of the biggest hit television series, which people think is a comedy, but I think it’s a documentary!

All these behaviors, the politics, the blaming, the avoiding accountability to cover your butt. It’s all these things end up sucking so much time. I did an experiment. I took over 15,000 CEOs in my workshops, I ended up asking them “How much time is sucked up in your organization with these dysfunctional behaviors?”

Like “How many times have you had a 15-minute meeting that took an hour or a project took longer than it should?” or maybe internal procedure or process just taking too much time? They started thinking about it and I started collecting this data and they would submit to me anonymously on a piece of paper, their number, right? So, I’ve collected thousands and thousands of data points, and generally, the range is from 20 to 80 percent. So, it’s a wide range but the middle point, the average was always around 50. So, in other words, it began to realize that on average, companies waste half their time in dysfunctional behavior. So, that was interesting.

Show Notes

Learn more about Don’s work at sagaleadership.com.

Connect with Don on LinkedIn.

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