Leadership

What Every Company Should Know
by Ram Charan

The 10 Qualities of Great Growth Leaders
by Ram Charan

Thursday, July 6, 2006
[Ram Charan]

Are you a growth leader? This isn't a question that's just for CEOs and business-unit presidents, and making sure you can answer "yes" to it is vitally important to your career advancement.

Every company needs to grow, and it takes leaders at many organizational levels to achieve it -- no matter what department you're in. In the years ahead, leaders who can truly help their organizations produce profitable growth are the ones who will find themselves moving up the corporate ladder. You can propel your career forward by adopting the skills and habits growth leaders possess, thus making growth part of your personal brand.

Over many years, I've observed leaders who are great at creating profitable growth. As a result, I've identified certain skills and habits that contribute to the creation, development, and implementation of ideas to help their organizations grow. They fall into two categories: What growth leaders do personally, and what they accomplish through others.

What the Best Growth Leaders Do Personally

* Gain first-hand knowledge. They get out of their office and are keen observers of consumers. They pay special attention to the moments of truth, when a customer either makes a purchase (or repeat purchase) or walks away. But they do more than just observe. They talk to these customers to find out why they did or didn't make a purchase.

Sam Walton built the Wal-Mart empire this way. Even as the company became huge, he stayed close to customers and made sure other leaders were exercising the same observational acuity. Apple CEO Steve Jobs is another leader who stays closely attuned to consumer behavior. Growth leaders supplement this first-hand knowledge with other tools, such as market research and focus groups, but seeing for themselves what's going on is essential.

* Head a growth project. Growth projects are different. They require a different orientation and different kinds of information. Leading one hones your mental faculties to be alert to new opportunities and issues.

But there's another key reason for being involved personally. All growth projects require interaction between departments. Do the departments cooperate, or does infighting slow progress? Are certain individuals or departments unresponsive to growth initiatives? The easiest way to find out about such issues is by running or participating in a growth project yourself. Sure, we're all busy. But being involved in a growth project should be part of your job. If you don't have the opportunity to lead one, at least be a participant.

* Are Focused. You have only a finite amount of time and resources. The best leaders concentrate them on a limited number of growth targets.

* Have a handle on risk. Good leaders realize that growth projects have much higher levels of uncertainty compared to cost-cutting initiatives. Customers may not like your new offering; the competition can come out of left field with a product that makes yours obsolete. In short, there's no guarantee that a growth project will work.

Not only have good leaders developed a methodology for evaluating risk, they have accepted the possibility that failure can occur -- even when everyone has made their best efforts. Still, growth initiators are more than willing to take calculated risks, and they have the psychology and temperament to deal with this uncertainty.

* Are Clear. They can articulate in plain, unambiguous language what the final user of the new product needs and really wants. They're also very specific as to what's to be done to create such an offering. And these leaders present this information from the consumer's perspective, not the company's. Clarity is important because their direct reports can't buy into a plan unless they understand it.

Often, growth leaders are visionaries, but if they cannot explain their vision, the people who work for them end up wasting time, money, and resources. Clarity creates accomplishment.

Getting It Done Through Others

As you can see, growth leaders are personally committed to profitably increasing the company's revenues. With that as the base, they then get their direct reports as engaged about growth as they are.

To do that they are:

* Realistic. If an objective appears unobtainable, many of your direct reports will disengage and simply go through the motions.

While the best leaders often establish challenging goals, those objectives are obtainable. Invariably, people committed to a growth project will exceed even optimistic expectations by a wide margin. For example, Motorola charged one team with developing the thinnest cell phone ever, and to do so within a year. The team not only met the deadline but created the must-have RAZR.

Your direct reports need to believe in the destination you have in mind, and you should work with your team members to bring the destination into clearer focus for them, helping them see it more clearly.

* Are extremely good listeners. Both in staff meetings and in one-on-one conversations, growth leaders detect ideas they've never heard before. The idea may not be fully formed, but they sense the kernel of something new, and then help its creator to both shape and implement it.

For example, according to a source at Time Inc., managers within the magazine group heard their direct reports say women readers were constantly complaining about how they were under extreme time pressure trying to balance their jobs and family. This insight led to a magazine, now in development, called Simplicity.

* Make sure their people are in some way participating in a growth project. No matter what the employee's job description is, the best leaders make sure each of their direct reports is also doing something that will help the company grow. This is possible no matter where you work in the organization.

For example, someone from the human resources department working in a growth project can help that team by contributing his or her specialized set of skills, assessing team members' growth mindset and helping them think out of the box. The HR staffer can also boost the growth team by assessing how creative the members are and what tools are needed for brainstorming. This results in the team being strengthened -- as well as the HR staffer's skills and knowledge growing through his or her participation in the key project.

* Celebrate failures. It's one thing to know intellectually that a certain percentage of growth initiatives won't work out, it's quite another to hold a party when a project fails. This counter-intuitive move sends a message to your direct reports that risk-taking is to be encouraged, even when it doesn't work out sometimes.

But these leaders do more than celebrate failures. They learn from them by conducting extensive post-mortems to discover what worked, what didn't, and why.

* Take risks on people. Good managers are willing to take some chances with people. They put them in stretch assignments and then help them implement the ideas they come up with. This nurturing fosters creativity and inspires their people. Who wouldn't want to see one of their ideas implemented company-wide?

And that underscores an important point. The best growth leaders work through their people. While they're personally leading or participating in a growth project, they're also leveraging themselves by having each of their direct reports involved in such key projects as well. Your Nobel Prize as a manager will come from how well you turn your direct reports into growth leaders in their own right.

Build your track record as someone who generates profitable growth. Be a leader.