Leadership Lessons from Bernie Sanders

The current U.S. Democratic and Republican nominee races are, if nothing else, entertaining and unexpected. Yet independent of political platforms, leadership fundamentals can explain much of the phenomena we are witnessing; in particular, the (what the media calls ‘surprising’) success of Bernie Sanders campaign. When examined under the lens of leadership, it was almost predictable.
In a research survey conducted globally and multiple times since 1987, respondents were asked to select seven qualities they “most look for and admire in a leader, someone whose direction they would willingly follow.” The top four, (which never changed throughout repeated surveys) were: Honesty (always scored highest), and in this order, forward-looking, competent, and inspiring. (1) As long as people believed a leader possessed those traits, they would willingly follow that person.
A quick look at Sanders history shows not only strength in each category, but unusual consistency of policy, ideology, and voting record over his 40-year career. Agree with him or not, he cannot be accused of flip-flop tactics, or of acting contrary to his stated beliefs, which lends great credibility to his messaging, and has inspired formerly disconnected and cynical voters back into the fray. With Congress’s favorability rating in the low single digits, it is not surprising that disenfranchised voters would fall in behind a Beltway outsider; so far over 2 million of them, making 6 million small donations averaging $27.00.
Similarly, Stanford lecturer Jim Collins wrote about what he called Level 5 leaders, the most notable characteristics of which are, paradoxically, intense professional will, and deep personal humility. (2) Sanders campaign from the outset announced that there would be no attack ads; that they would take the high road of setting the agenda around really important national issues, and focusing only on them. His approach with all people, including the media, has been respectful and courteous, displaying a humility unusual at that political level. In fact, he has even cautioned Americans that neither he, nor anyone else elected President, will alone be capable of resolving the monumental challenges currently facing the country. He advises that only a collaborative effort, including a revitalized Congress, can deliver solutions. Yet as we see in the debates (which he had to force on the DNC), his humility does not mean he is a pushover. His fierce will to table the crucial issues, stay on message, and engage in vigorous debate to educate the voters, is anything but passive. Intense professional will; deep personal humility.
Result: he has gone from a ‘fringe candidate’ whom the media joked about, to winning seven of the last eight states’ caucuses and primaries. National polls indicate he defeats Trump by far higher margins than would Clinton.
Whether Sanders can win the Presidency or not remains to be seen. What is certain, is that without demonstrating those proven leadership characteristics, his campaign would never have gotten this far.
What might be the implications of this for leaders in the corporate sector? Do the same leadership traits still apply? Deliver superior results? Former TD CEO Ed Clark once observed “It’s incredible how much energy and power is out there on the front lines if they think you are a true believer too.” Starbucks CEO Howard Schultz recently observed of Americans: “Broken promises, void of truth in leadership have led to a fracturing of trust and confidence not only in our elected officials but in our institutions.” They have “cynicism, despair, division, exclusion, fear and yes, indifference.” (3) Indifference? We are all most familiar with the pathetic employee disengagement statistics cited in so many recent surveys. Yet Schultz’s, (possibly a Level 5 leader) latest results at Starbucks include $3.6 billion profit on $19.2 billion revenue. Not too shabby.
Perhaps the Sanders phenomenon could inspire leaders in all organizations to conduct a personal mirror check on those six leadership characteristics:
• Does my own agenda align with that of the organization? Is it perceived that way?
• Have I set a vision for the company that resonates with and includes employees?
• Do I walk my talk?
• Am I perceived as honest? credible? humble?
• Do employees truly believe that I’m sufficiently committed and strong-willed to pull off the vision?
Often, when the answer to these questions is ‘no, or not really’, it’s by default rather than design. These traits are easy to overlook, and sometimes call for painful personal growth. Yet the data show that as we work to master them, employees connect and deliver better performance.
Honesty, forward thinking, competent, inspiring, professional will, and personal humility: these have enabled Bernie Sanders to make a serious leadership run that eight months ago, no one believed possible. Business research directly correlates leadership behaviours with superior performance, further justifying any efforts to improve our leadership capabilities. It’s well worth our looking in the leadership mirror.
Now you may ask “What about Trump?” but that’s a blog for another day.
1. Kouzes, Jim, and Posner, Barry, The Leadership Challenge, Wiley & Sons, 2002
2. Collins, Jim, Good to Great, William Collins, 2001
3. http://www.ozy.com/provocateurs/coffee-schmoffee-can-starbucks-ceo-fix-america/68786?utm_source=pdb&utm_medium=email&utm_campaign=04062016&variable=fc95adf184889ca9b9aa26fe1ff12300

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VW Trust: Gone in 60 Seconds…

Upon reading the recent Volkswagen admission to installing stealth software that fooled EPS testing devices, my immediate thought was “here we go again. yet another corporate ethics scandal.” Since 2008, we’ve read increasing accounts of multi-billion dollar fines levied to banks, for everything from LIBOR manipulation to sub-prime mortgage deceit. Such amoral behaviour seems to have become commonplace news in all sectors: Enron engages in ‘off balance sheet’ accounting; JP Morgan Chase is fined $9 billion for their role in the sub-prime fiasco; drug-maker Turin jacks price of 62 year old cancer/AIDs drug by 5500%; Volkswagen sidesteps the EPA regulations for 11 million cars. Just another day in corporate world.
Public complacency is understandable; repeated examples of slap-on-the-wrist, no admission of guilt deals between offenders and government regulators have left us feeling cynical and helpless to alter the corrupt practices.
These events however, are indicative of a larger, much more serious underlying problem: the confusion of purpose; confusion between the original purpose for which an organization first formed (say, to make an affordable, reliable “people’s car”) and the purpose dictated by Wall Street: uninterrupted growth in quarterly earnings per share.
That confusion just cost Volkswagen $28 billion in market value, not to mention the brand trust that took decades of the dedicated hard work of thousands to engender. Gone in 60 seconds.
When discussing purpose, one of my favorite analogies is the saying “profit is like oxygen; we absolutely need it to survive, but it is not the reason we live.” Of late, for corporations, it has become the latter, sometimes due to greed and corruption, but often due to intense pressure from gradually evolved systemic forces.
There was a time when businesses started due to an idea. Someone detected a market need and organized a company to create a product or service to satisfy that need. Financial markets provided access to capital for those companies, and the return to investors was a cost of creating and getting the product to market. Somewhere between that time and now, the purpose seems to have shifted, and the pressure on leaders to comply with that shift is enormous. Facing decisions of whether to go with long-term strategic product or service investments, or to satisfy analysts expected numbers, which leader action does the system reward? And sometimes, the pressure creates a trap from which even well-meaning leaders cannot escape.
Back in 1982, Volkswagen CEO Carl. H. Hahn embarked on an aggressive growth strategy, one with aspirations of global market dominance and cost leadership. To be fair, back then, that strategy may have made perfect sense to assure the company’s long term future. After all, global competition began to intensify around that time, and it was his duty as CEO to position Volkswagen for success in that global environment.
But implicit in that strategy was a shift in purpose (or at least the danger of it) from one of making excellent cars to one of growth. Even if the growth was intended to drive scale cost economies so VW could effectively compete, it nevertheless shifted purpose to profit. To getting more oxygen.
The various investigations will determine whether Mr. Winterkorn is guilty of illegal behaviour, and if so, he should be justly dealt with. My contention though, is that whatever the outcome at Volkswagen, it should make us pause to reconsider the systemic pressures that drive even honest, responsible leaders to make disastrous decisions. Financial analysts serve a useful purpose of keeping management from complacency, by presenting us with ‘best case’ financial performance estimates for that company, against which we can compare actual results. But that useful function becomes dangerous when analysts ignore the real purpose of the business, which is not simply to make as much profit as possible (Peter Drucker contends that the sole purpose of any business is to create a customer). To be responsible, analysts must include corporate mission, and a long-term investment horizon in their reports. For a long time, this has not been the case; quarterly guidance has ruled the day.
It will be interesting to learn to what degree Mr. Winterkorn’s and senior management’s incentive packages were tied to the growth strategy. We should be learning by now that we live in a complex, interconnected ecosystem, where disruptions in any one segment (financial, political, social, environmental) have significant impact on all the others. In the end, we make all the rules and regulations. We can decide that ROI will have a broader definition than simply shareholder returns (after all, what exactly is the definition today of a shareholder?) We can set the rules to encourage and reinforce those CEOs who keep corporate mission in proper perspective, and do more than just live to breathe.
In it’s zeal to maximize short term profits, Volkswagen management has jeopardized the very existence of the company, threatened the livelihood of thousands of employees, and possibly even damaged the German economy, which in turn would impact the global economy. It’s time to learn from this and rethink the current capitalist system that we’ve allowed to evolve, (largely through undue and unethical influence of Wall Street in the U.S.) so that systemic pressures tempting good leaders to make foolhardy decisions are at best, eliminated, and at worst, significantly reduced.

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