Dave Ulrich: Making a Case for Desired Results
By Dave Ulrich
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Leadership matters. We all know it. When you ask people what makes an effective leader, they generally list all the behaviors, knowledge skills and abilities associated with good leadership on a personal level. Good leaders have character, integrity and trust; are candid, open and honest; and relish change. However, a leader’s personal attributes are only half of the equation for effective leadership, which also depends upon the results a leader delivers. Leadership matters. We define successful leadership as “behaviors x results.” Effective leadership requires both behaviors and results. It is necessary to bridge these those "chasms" to get what we call "results-based leadership." These leaders know what results he or she want to accomplish and the right way to get those results so they are sustainable.
The concept of "desired results" starts with a basic premise: If you don’t know where you are going, no path will get you there. As a manager, if you don’t know what results you are trying to accomplish, you will never be able to focus your energy and attention on the right things. Identifying desired results, in effect, defines what deliverables you wish to achieve as a leader in an organization.
Every organization is perfectly designed for the performance it achieves. If the design is poor (i.e., the desired results are not clearly articulated and/or good leadership behaviors are lacking), the performance will be disappointing. If, on the other hand, the design is excellent (i.e., the desired results are clearly laid out and good leadership behaviors are in place), the performance will be outstanding.
The Balance Scorecard
Effective, well-balanced leadership delivers results in four areas: the employee, customer, investor and organization. Essentially, this involves recreating the "balanced scorecard."
The employee: What is it you want in your employees, and how do you begin to measure it? As a leader, you want to find ways to build both the competence and commitment of your employees.
The customer: Research indicates leaders want customer share rather than market share. How do you get customer share? You begin by asking, "Who are the target customers?" Then you start building a relationship with those people so you capture customer share over their lifetime.
The investor: How do we serve investors over time? First, there are traditional activities; leaders try to find ways to grow revenue and reduce costs. Second are the intangibles. How do the stockholders define the value of a firm beyond simply the earnings. Leaders want to create a positive image so investors give the firm a premium for the money they earn.
The organization: How do you create a set of capabilities imbedded within the firm that are not tied to any one person? Firms seem to have personalities, what you might call a culture. The leader must ask, "What is the right culture, given this company’s business goals, that will allow it to succeed without the leader actually being present all the time?"
Some leaders are particularly gifted at one piece of the "result puzzle" and not others. For example, some leaders are superb at managing the people side, but may not be servicing their investors very well because they are not making the profits they need. Others focus on investor results. But shareholder value is often duplicitous. It doesn’t take much to figure out how to cut costs. You can do so through numerous short-term measures, but you will not build long-term results.
Effective leadership requires desired results in all four areas. Some research suggests the lead indicator is really the employee. That’s a very positive insight for a leader who is trying to build sustainable results. Getting employees who are personally committed and dedicated on their own accord will lead to improved customer results because the customers will senses that. Over time, those customers will continue to buy and that will lead to profitability.
Leaders have a tendency to focus on things they can control, which often are employee practices within the firm. But frequently employees are forgotten. One mistake in the early 1990s caused a lot of firms to face a vicious cycle. They downsized badly and eroded employee commitment. The customers felt that weaker employee commitment and bought less, so the firm made less money. To save money, the company downsized again, starting the cycle over.
There are two levels of application for attaining desired results, one at a personal level and the other at an organizational level. The key test at either level is to pose the query,
"so that" test before taking action.
At a personal level, a leader constantly must ask, "What am I trying to accomplish by my behavior?" This statement of purpose should be followed by the query "so that." What is the intended outcome of the action? What is the decision to be made? What is to be accomplished? In other words, what is the desired result. This discipline prompts leaders to be more judicious and more careful with their time.
At a company level, organizations must do the same thing. Most firms have their list of competencies, but then they have to link those to the results by focusing on the "so that" part of the equation. It is important to ensure the connection is clear. Companies, like individuals, must constantly ask, "What is the outcome? What is the result we are trying to accomplish in each of those four areas?"
Some leaders focus on short-term results; others believe it is more important to focus on long-term results. The dilemma is to do both. That’s what makes it tricky. Long term, it is important to think about how your behavior today as a leader will affect your company six or nine or 12 months out. It is not just a case of "people are long term, money is short term." Both are long term and short term, and you want to pay attention to both.
It’s easy to say that American leaders are short-term oriented and, therefore, not operating their businesses successfully. My sense is they have to be short-term oriented. Results do matter. The answer is not simply to go for long-term results, because if that’s all you go for, you’ll never get there through the short term. It’s managing both of those that matters.
Questions? Contact researchsupport@umich.edu or call
734-764-5278.