Article originally published in the Philadelphia Business Journal on March 29, 2021.
What are the leadership traits of successful people? In my experience as a CEO and board member observing other leaders, I believe there are seven primary traits:
1. Sets the right tone at the top and nurtures the right culture within their organization.
Tone at the top and organizational culture are mission critical to the success of all businesses. Tone at the top reflects the ethical compass of the company. Culture is the environment in which employees are treated and interact with each other, as well as how they interact with customers and clients.
Wells Fargo suffered significant legal, financial and reputational damage when they were caught setting up phony customer accounts in bank branches to drive bonus payments. Some employees who reported the fraud to the bank’s ethics hotline were fired.
Volkswagen experienced the same fate when they were caught falsifying emission test results for their diesel cars. The common failure at both companies – poor tone at the top and poor culture.
2. Are effective communicators.
Successful leaders communicate the mission and vision of the company and the roles that various groups of employees play in achieving them. Successful leaders are good listeners and encourage direct reports to share what they think, not what their leaders want to hear.
Being personally visible is an important part of effective communication. Successful leaders provide forums for employees to express their views. One of the best ways to accomplish this is to conduct town meetings with groups of employees to talk about the status of the business and address questions.
3. Creates an environment in which employees have fun exceeding their goals.
As I rose up through my company, it was challenging to meet the stretch goals set by the CEO each year. We often fell short of these goals and needed to cut expenses, which adversely impacted morale and growth initiatives.
When I became the CEO, we changed our approach to goal setting. We set realistic financial goals with the objective of blowing through those goals by the greatest extent possible. We increased bonus payments for significantly exceeding those goals. Employee morale immediately improved.
During my five-year tenure as CEO, we moved from fourth quartile financial performance to first quartile performance measured against 17 public peer companies within our industry.
4. Listens when their direct reports challenge paradigms.
Paradigms are established ways of doing things. When a new approach is suggested, the wrong response is, “We have always done it that way.” Former Australian Executive Woman of the Year Catherine DeVrye has called these “the seven most expensive words in business.”
Challenging a paradigm and thinking “out of the box” is crucial for achieving breakthrough results and building competitive advantage. Employees who challenge existing paradigms are your change agents. Listen to them.
5. Doesn’t hold business unit leaders accountable for what they do not control.
At companies in multiple lines of businesses, business unit leaders are responsible for achieving P&L goals of their businesses. On P&L statements are corporate staff overhead charges that frequently change as staffing within these units change. Business unit leaders do not control these costs, which impacts the ability to achieve their goals.
At my company, we held corporate charges to our business units constant (plus inflation) for three years and then updated them. Increases and decreases in staff unit personnel and other costs were reflected in a corporate holding company account. This allowed the business unit leaders to focus on what they did control to achieve their P&L goals.
6. Encourages employees to develop a feeling of ownership for their area of responsibility.
This was a lesson taught to me when I was president of my company’s Canadian subsidiary. We empowered the operator of one of the production units at our Toronto plant – an hourly employee – to develop the scope of a capacity expansion, a job certainly outside of his normal job responsibilities. After he successfully completed the assignment, he developed ownership in the unit and how well it performed.
Developing a feeling of ownership by our employees in what they do was the foundation of our philosophy of continuous improvement that lowered costs and improved our competitiveness.
7. Recognizes the brutal facts of reality.
This is one of the worst things a leader can fail to do. You would think that the lesson of facing the brutal facts of reality would not need to be relearned over and over again. Examples include the Flint, Michigan water scandal, the Chernobyl nuclear power plant catastrophe and the Challenger Space Shuttle disaster.
In all three cases, leaders ignored the brutal facts of reality and failed to listen to those who warned about impending doom.
Develop these seven leadership traits. They will help you and your organization succeed.
Stan Silverman is founder CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at Stan@SilvermanLeadership.com.