Leadership for High Performance Organizations

Financial Executive Women New York

March 25, 2010

Larry Siedlick, CEO

The ARx Group

Some Challenges Facing Business Leadership

Commoditization of Products/Services Could mean only price matters

Less Financial Resources

• Doing more with less

Changing Customer Relationships Who is the customer? Customers are more demanding

Labor Shortages - Shrinking Talent Pool

• Generational/Cultural Differences of Staff

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Some Challenges Facing Business Leadership

Improve delivery of the service • Developing Organization-wide Customer Experience Culture

How to ask staff for a higher level of performance while maintaining quality • Searching the “Silver Bullet”

Bridging the CFO – CEO Cultural Divide

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CFO – CEO Relationship

“CFO’s are from Earth – CEO’s are from Pluto”

CFO Thought Process vs. CEO Thought Process

2007 survey 47.5% of CFOs said “they were less optimistic about company financial prospects than their CEOs.”

Recipe for “CFO-CEO Tension Stew” 1. In a large bowl mix 1 Part Realist with 1 Part

Visionary

2. Let stand at room temperature

3. Get out of the kitchen quickly

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What’s the measure of the CFO-CEO relationship?

Does the CEO turn to the CFO for a second opinion on really

important issues?

2007 Accenture Survey

• 75% of CFO’s describe their role as “business partner”

• 5 years before - 60% described role as “service providers”

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The Evolution of the CFO – CEO Relationship

Outstanding CFO begins as collaborator and influencer and evolves into a business partner/confidante

CFO starts to talk about business models instead of financial statements

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CFO – CEO Relationship “The CEO Wish List”

CFO can cut through complex financial data and present it in terms of the CEO’s objectives

CFO is adept at anticipating CEO’s need for his agenda

Say “No” but offer me a way to get to “Yes”

CFO who is a partner/confidante based on mutual trust

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CFO – CEO Relationship CEO Valuation of CFO Influence

Real CFO Influence/Value - Internal/External

• Internal – strong relationship with CEO’s other direct reports

• External – banks, accountant firm, opinion leaders

• CFO in privately-held – many times are “chief spokesperson” to banks, investors

Viewed by entire organization as a business partner and not an accountant

CFO needs a strong mix of strategic, financial and leadership people skills

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Lead⋅er⋅ship [lee-der-ship] – noun

- the ability to guide, direct, or influence people

Based on that definition –

“Who are the leaders in your companies?”

Leadership - not to be confused with management.

Leadership Defined

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Today’s Goal “Scratch the Surface of Understanding”

How Leadership Connects to High Performance

How Leadership Culture Drives Value/Profits

Leadership Philosophy, Responsibilities, Characteristics and Competencies

Perception vs. Reality

What is the “Meaning of Life?” And other small stuff you probably already

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“What is the Meaning of Life?” Building Cathedrals and Temples

What is our organization’s purpose?

Not to be confused with “what we do”

Example of what I mean

• What We Do at Sunrise

• Perform laboratory tests on blood, body fluids or tissues samples to check for the presence of disease

What is Our Purpose?

“We provide advanced laboratory services that

prevent, diagnose and treat medical diseases

to positively impact human health.”

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Purposeful and Passionate Leadership “One person with passion is better than 40 people who are merely interested.”

Purpose Passion Inspired People

Passion – Powerful magnet for talented people

• Talented people create value and profits

Leadership Passion Collective Passion

• Collective Passion attracts a lot of talented people who in turn create a lot of value and profits.

Passionate Workplace = Passionate Performance

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Passion’s Role in a High Performance Organization

New Organizations /Projects are rarely without passion

Mature Organizations/People

• Passion can be lost in the "operationalization“

Is our leadership style "passion-challenged?"

50% of senior executives struggle with maintaining the passion

Question: “Can we really evoke a strategy, a compelling saga, if our leadership is passionless? “

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“Nothing great in the world has been

accomplished without passion.” - George Wilhelm Hegel

What do we do if our passion is lost?

Introspection – step back and remind ourselves what our company’s purpose is

Define, in words, what we are passionate about because we are language beings

“Languaging passion” makes clear in our own minds what we are up to, and we are then able to articulate it to others.

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“Languaging” My Passion

“My passion is to revolutionize leadership in a way that would allow us to significantly alter

the future.”

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Leadership Connects the Dots . . . “ Attracting, retaining and inspiring good people is directly proportional to our organization's culture.”

Attracting/inspiring great people . . . requires

great organizational culture . . .

Great Organizational Culture is . . . driven by great leadership . . .

Great leadership . . . worked on EVERYDAY . . .

The Good News . . . Business offers new opportunities to lead everyday

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Is Leadership Genetic? Survey of 300 CEOs Worldwide

"Is leadership predominantly something you are born with or something that you develop through experience?“

• 40% said leadership was born

• 60% said it was gained through experience

“What they considered to be the most important aspects -- and the most difficult -- of being a leader?”

• Most Important: Having the right people was second only to creating vision

• Most Difficult: Having the right people just behind maintaining momentum and developing people

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Leadership for Hiring the Right Team “Hiring for Dummies”

Customer minded/hard worker are NOT learned skills – they are personality traits

Most organizations hire people for what they know… then they fire them for who they are

Spend more time in the hiring process finding out who people are

Hire for behavior; train for performance

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“To select the wrong person for a job is a common mistake; not to remove them is a fatal weakness.”

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Customer Experience* (*formerly Customer Service)

“Why is it so hard for some people?”

One Possible Theory

Technically Driven vs. Customer Driven Leadership

Technical people tend to manage/lead from an analytical perspective

We need to learn to manage/lead more from an emotionally benign perspective

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Customer Experience Culture “Top Down Philosophy”

#1 Priority is the Internal Customers

Recognizes the staff as customers

Strong emphasis on both teamwork and responsiveness to individuals

All levels of management are accessible and place strong emphasis on work environment

“Perception is Reality”

Your staff’s perception of culture is their reality – no matter what we think.

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How Leadership Inspires* High Performance (* formerly motivates)

“A million things to do in our spare time”

Giving Verbal and Visual Recognition

Say thanks to someone everyday

Smile - Keep the workplace friendly

Recognition in front of peers

Walk the “4 Corners”

Praise someone everyday

Non-monetary awards

Asking Questions and Listening Carefully

Listen to our staff - Listening tells us what staff needs (“Perception is Reality”)

Listen to staff ideas and act affirmatively on those suggestions

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Other Things That Inspire

People to High Performance

Opportunities for Growth

Within the position and, if possible, beyond the position

Empathetic and Thoughtful Leadership

• Do what we say we're going to do

• Keep all our promises

• Involve staff in decisions that directly affect them

• Go out of our way to help staff

• Be sympathetic to personal problems

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How do we help our people get to high performance?

By Leadership that is …

Effective

Passionate

Emotionally Intelligent

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Passionate Leadership to Achieve High Performance

“High-performance organizations are purpose-driven, while all others just operate day by day.”

Be purpose-driven Staff embraces that purpose and passion as their own

Know our people Leaders know their people Develop their skills to help them reach full potential Staff want to contribute meaningfully; create an environment

where they can do so

Get people involved Participation vs. “Following Orders” Creates a personal interest in the decisions Enable people to contribute

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Emotionally Intelligence Leadership

“With Apologies to Daniel Goleman”

Key Traits of High Emotional Intelligence

Optimism

Self-Awareness

Empathy

Impulse Control

Reality Check

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Competencies for High Performance Leadership

Know ourselves (Self Awareness)

Leaders remind people what is most important, but first we must know what's important to us

Be optimistic and empathetic (Social Awareness)

We set the tone for those around us

Connect with others (Relationship Management)

Understand what makes our staff perform at their best and what they need to help the organization succeed

Self Control of, and responsibility for, our actions

(Self Management)

Assume responsibility for ourselves

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Leadership Competencies “Vision without action is daydreaming.”

Make timely decisions

Make a sound decision and move on

Develop a vision

Leader's job is defining the vision for others and inspiring them to follow

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Leadership Communication

Perhaps a leader's most significant function - the good news and the bad

“Intent vs. Impact” (Leaders choose and deliver their words carefully)

Punctuate these 6 words: "woman without her man is nothing“

Men wrote: "Woman, without her man, is nothing."

Women wrote: "Woman! Without her, man is nothing."

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Leading the Change to High Performance

“Change is good – you go first.” - Dilbert

Guide people toward the desired objective:

Say what we mean - Be straightforward and credible – Understanding what the leader wants = people working things out

Empathize, don't disdain – Understand a person's circumstances and help them develop a plan to

improve the situation.

Have respect – People should feel responsible for their own actions and ideas

– Respect their personal values, rather than forcing our own upon them.

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The Role of a Leader in High Performance Organizations

“The future ain’t what it used to be.” – Yogi Berra

Strategist for Future

Look 3 years out into the future and share with staff

“How will our organization survive and improve in the future?”

Ambassador to important staff and customers

Increases staff’s trust in us and establishes our credibility

Inventor

Find staff /customer’s pain and develop (invent) new processes or services to relieve it

Inventor function ensures that the strategic direction of the company aligns around the staff’s and customer’s pain

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The Role of a Leader in High Performance Organizations

Coach, teacher to our direct reports

Culture of learning at all levels

Teach the big picture perspective

Teach some basic financial/budget facts to staff

Investor

Treat our organization/career as an investment of a life time

Strive to constantly increase it’s value

Striving to increase value leads us to good decisions and creates a stable work environment for people

Student

Stay active in some form of continued professional development

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Organizational Trust Theorem “The level of inspiration* in an organization can

never rise above the level of trust.” (*formerly motivation)

Staff accepts and executes decisions even if they don't fully understand them

Staff gives up short-term benefits for long-term, mutually beneficial rewards

Staff shares the burden in difficult times

Staff responds with understanding to work emergencies

Staff invests their ideas and suggestions in the future

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Harness Our Team‘s Creative Energy

Conditions Necessary for Creative Energy

An inspiring purpose

A “sense of urgency” that is shared by all

A "we're all in this together" attitude

Goals that broaden people‘s abilities

A belief that teamwork can meet these goals

Know what our team really wants _____________________________________________

“For 25 years you’ve paid only for my hands when you could have had my brain for free.” – Retiring General Motors Worker 40 of 46

What People Really Want

Want to feel like members of a great team

Want to know the work they do is necessary

Want to know the work they do is important for the organization's survival

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Does all this “Leadership Stuff” really lead to High Performance?

“We Report - You Decide”

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Some 2007 Prospective Before You Decide

Sunrise’s National Competitors are:

– Quest Diagnostics

In 2007 was over $6.7 billion (US)

93 times the size of Sunrise

– LabCorp

In 2007 was over $4.0 billion (US)

55 times the size of Sunrise

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2007 Sunrise Leadership Culture Results

2007 Productivity Metric - Transactions/FTE

1. LabCorp 3,820

2. Sunrise 3,776

3. Quest 3,639

2007 Financial Metric – Revenue/FTE

1. Sunrise $206,220

2. Quest $151,053

3. LabCorp $143,632

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2007 Sunrise Leadership Culture Results

Earnings similar to National Labs

High Organic Growth

Low Staff turn-over at all levels

High Customer Retention Rate

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One Final Theory “The Ultimate Metric”

“The quality of a person’s life is in direct proportion to their

commitment to excellence, regardless of their chosen field of

endeavour.”

– Vince Lombardi, US Football Coach

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Contact Information

Larry Siedlick - The ARx Group Email:Lsiedlick@TheARxGroup.com

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