April 01, 2008

Filling the Shoes of Your Predecessor

Question: Are you prepared to step up to fill your predecessor´s big shoes? When you get that opportunity, how will you stay focused on your True North and not get pulled off course by the pressures and seductions?

Answer: Stay grounded and never lose sight of your roots.

Recently, we have seen an ongoing succession of leaders self-destruct because they lost control over their egos – the latest being New York Governor Eliot Spitzer. These leaders think they are the institution, and they are the sole reason for their organization´s success.

In contrast, authentic leaders know who they are and where they come from. They don´t get caught up in their egos, nor do they think leadership is having legions of followers. They recognize their job is to unite their troops around a common vision and values and empower them to step up and lead.

Goldman Sachs CEO Lloyd Blankfein stepped into enormous shoes when Henry Paulson became Treasury Secretary. Serving on the Goldman board, I watched as Blankfein deftly took over the reins without missing a beat. In two years he has put his distinctive stamp on the firm, expanding its footprint around the globe and developing quality relationships with everyone from government leaders around the world to inside Wall Street players.

Son of a postal worker, Blankfein stays grounded by constantly worrying that Goldman´s enormous success today could lead to big problems tomorrow. That´s how he sensed early signs of the sub-prime crisis and shifted his firm away from its perils just as his competitors were expanding their risks.

General Electric CEO Jeff Immelt faced a similar challenge in succeeding “CEO of the Century” Jack Welch. Immelt says, “I had one good day as CEO – September 10, 2001 – before the roof caved in.” The attacks of September 11 impacted a number of GE´s businesses, yet Immelt was undaunted. Recalling earlier challenges in his career, Immelt said, “At times like these, you´ve got to be able to draw from within. Leadership is one of these great journeys into your own soul.” Immelt focused on making GE more innovative and more customer-focused and launched Ecomagination to unite GE´s energy-related businesses.

IBM CEO Sam Palmisano replaced an iconic leader in Louis Gerstner, who saved IBM in the 1990s. The down-to-earth Palmisano didn´t try to emulate Gerstner, but decided just to be himself. He transformed IBM into an “integrated global network,” focusing the company´s best talents on solving difficult customer problems. To unify his employees around this new vision, Palmisano engaged all 350,000 employees in an on-line “values jam” to create core values – dedication to customer success, innovation and trust. Palmisano´s efforts are paying off as IBM´s revenues and earnings are growing and its stock price soaring.

Target´s new CEO, Greg Steinhafel, is also taking over from an enormously successful predecessor. Target became the first retailer to compete toe-to-toe with Wal-Mart, making discount “cool” and the Target bulls-eye ubiquitous. Asked how his leadership differs from his predecessor´s, Steinhafel replied modestly, “This isn´t about me. It´s all about the brand.”

Xerox CEO Anne Mulcahy stepped into very different circumstances when her predecessor was forced out as the company facing possible bankruptcy. With Xerox´ organization imploding, Mulcahy rallied her troops around “restoring Xerox to a great company.” As she endured incredible pressure from bankers, shareholders, and the SEC, former CEO David Kearns asked her, “Do you believe those lies about you in the media?” “No, David,” she replied calmly. “Good,” he said. “Then don´t believe it either when they call you the savior of Xerox.” In spite of Xerox´ remarkable recovery, Mulcahy has never lost her humility.

In our research for True North, authentic leaders described the things they do to stay grounded:

1. Stay humble, and don´t get caught up in the perquisites of your office. The best thing we did at Medtronic was to eliminate all officer perquisites back in 1993.

2. Don´t lose sight of your roots, and remember your life´s most difficult times. We learn a lot more from our failures than our successes. Starbucks´ founder Howard Schultz still visits Bayview Housing Projects to show his daughter where he grew up in Brooklyn.

3. Build your support team, starting with your spouse. Throughout my career my wife Penny has been invaluable as a counselor and supporter. So has my men´s group that has met weekly for more than thirty years.

4. Don´t lose sight of your intrinsic motivations. Money, fame, and power will never bring you the satisfaction that making a difference in the world does.

5. Lead an integrated life: be the same person at home, at work and in your community. As Jet Blue founder David Neeleman said when he stepped aside as CEO, “Never lose sight that your family is what´s most important.”

6. Remember: leadership isn´t about you. As GE´s Jaime Irick says, “You´ve got to understand leadership is about serving the folks on your team.”

Bill´s bottom line: staying grounded is the best way to keep focused on your True North.