Eight Secrets For Executive Leadership

Optimize By Ram Charan

December 2006, Issue 62

Most CIOs and those aspiring to the position understand that it's not enough to be a top-notch technologist. The reality is, you have to think of yourself as a business leader first and a technologist second, for lots of reasons.

But what does that really mean? And how do you develop yourself as a business leader? I tackled the problem of understanding leadership by carefully observing many leaders in diverse industries and jobs over long periods of time as they moved through their careers.

I'm not the first to make the case that leadership matters, even for CIOs—but I have my own particular perspective on the urgency of the matter. For one thing, business is far too complex for individuals, even CEOs, to make decisions based solely on the information and perspective of one particular functional silo. To stay ahead of the game, the various functional silos have to be well-coordinated, and trade-offs among them must be made both well and quickly, and with complete transparency about what's being gained and lost.

Don't be put off by the mystique surrounding business leadership, or by those who argue that great leaders are simply born that way. Even people who are naturally endowed with self-confidence, likability, charisma, and other traits associated with business leadership need to sharpen their abilities—just as talented athletes and musicians must practice, practice, practice to hone their skills.

As I separated out the uncontrollable factors behind the failures and success, I found eight particular skills that all leaders must develop. More to the point, you can develop them in yourself. By consciously working to improve these skills and becoming aware of how your personality affects them, you'll be a better leader—besides being a great technologist—and you can help others develop their talent as well.

1. Positioning the business to make money. The clear, simple, specific central idea of a business comes from its leaders. Those who are good at shaping it make it seem easy, but coming up with a clear focus for the business that's appealing to customers—not to mention profitable—is a specific skill only some leaders master.

Too many leaders wait too long to reposition the business. Some can't figure out how to do it in a way that makes money, and they become paralyzed. Even if you aren't the one to find the central idea of the business, if you watch the money-making basics like a hawk—you don't have to be a financial analyst to track the basics—you might be the first to detect that the positioning is becoming fundamentally flawed. You might also be the one to carry a sense of urgency to your executive team—and the very person who can figure out how to create a new positioning using technology.

2. Detecting the pattern of external change. This know-how gives you the lead time to reposition the business ahead of competitors so it can continue to make money. You can learn to pick up important shifts early by broadening your lens—even if you aren't the CEO. Scan the external landscape far beyond the boundaries of your function, business, industry, economy, or country, and see what emerging trends are out there that might affect your business.

3. Identifying and developing up-and-comers. You know you're a good leader when your business is stronger relative to the external environment than it was when you first took charge. One way to improve upon what you inherited is to identify and develop other leaders within the organization.

Pinpoint the absolutely essential requirements of a job for today and tomorrow—the non-negotiable criteria for succeeding in the job. Next, take the time to figure out a person's natural talents. Only then can you match the leader and the job and help the person grow.

4. Molding your leadership team. When collaboration is essential, select your direct reports with that in mind. Don't go by talents and skills alone; look at people's willingness to submerge their own self-interests for the betterment of the group. Shape and reinforce collaborative behaviors among the top group, and make sure the entire team has a common view of the project and overall business. Many leaders deal with their direct reports one on one, but you get higher-quality decisions and better coordination when you invest the time and energy to get the players working well together. Transparency is key.

5. Managing the social system. This means shaping "operating mechanisms" that bring people together routinely whenever the situation calls for decisions and trade-offs, exchanges of information, or coordinated actions.

Shaping behaviors and the quality of decisions in the operating mechanisms is a hands-on job for a leader. Leaders send clear signals about what behavior is appropriate through body language, comments, and coaching.

6. Setting goals. Looking in the rearview is a huge and frequent mistake. So is focusing on only one goal, or setting goals that conflict with one another. The know-how is to determine a realistic, coherent set of goals based on the opportunities that lie ahead and the organization's ability to achieve them.

7. Deciding what to do first. Priorities define the path to the goals and synchronize the moving parts of the organization. One of the challenges in setting priorities is shifting resources—people and money—accordingly. Often, that means shifting people from one project to another. But when people are spread thin, you run the risk that the important things simply don't get done. If, on the other hand, you specify the handful of projects that are most important, shift people's attention accordingly, and let other things fall by the wayside, you have a much better chance of delivering on the things you really must.

8. Balancing competing interests. No matter how well you run a business, there's almost certainly a group that objects to something you're doing, whether it relates to your strategy, products, or employment practices.

Special interests may conflict not only with you, but also with one another. It's never too soon to start noticing these and thinking about how you might develop a methodology for sorting out the legitimate concerns so you can adapt to them.

As you practice the know-hows, you'll develop your innate leadership talent. But beware of certain personality traits that might get in the way. The idea is not to be a perfect person, but to be self-aware of what's blocking you from developing the know-hows fully. If you can't be objective, ask a boss or colleague for candid feedback now and then.

You can develop your know-hows, but improvement isn't automatic. It takes consistent practice, feedback, reflection on your mistakes, and a willingness to overcome psychological blockages. True leaders have the discipline and commitment to continually improve. After years of practice to develop the specific know-hows, you may indeed rightfully claim that elusive quality of great business leaders: the know-how of business leadership.

Ram Charan is a business adviser, educator, and author. His latest book, Know-How: The Eight Skills That Separate People Who Perform From Those Who Don't, is due out from Crown Business in January 2007.