What Every Company Should Know
by Ram Charan

Lead by Putting Purpose Before Self
by Ram Charan

Thursday, December 7, 2006

In an era when many business leaders seek celebrity at the expense of their companies, others are quietly focused on something else entirely: the business.


What they care most about is carrying out the mission of the business, delivering the promised results, and building an organization they can be proud of.


They have a sense of purpose that goes beyond their own personal desire for extraordinary wealth, status, self-aggrandizement, or power. They put a broader purpose before interests that benefit only them.


Right on Target

Such leaders are often unsung heroes. Take, for example, Target -- a company widely recognized for its combination of savvy marketing, value pricing, and an emphasis on design that has wooed shoppers from both Wal-Mart and department stores.


Can you name the leader behind Target's success? Probably not. Bob Ulrich isn't a household name, though he's used his superb business savvy and leadership skills to build a strong business.


Today, after some 20 years of consistent, rhythmic work, Target is setting a standard against which its larger competitor, Wal-Mart, is being compared.


Magnetic Leadership

Look around your organization and you'll likely see leaders who are always thinking of what's best for them or what will make them look good.


Then there are others who are driven to create something meaningful and enduring. Their purpose might be to make the organization the most respected in its industry, or to develop the best workforce in the world. One CEO I know has made it his purpose to recast his company as an innovation-driven organization.


These are the leaders people typically gravitate toward. The ones we trust, and who we want to be more like -- not because of how much money they make, how much power they have, or how well-known they are, but because of who they really are, their inner substance.


Given the public transparency of the 21st century, leaders who put purpose before self are the ones to follow -- and to emulate.


Actions Speak Louder Than Words

Some leaders make impassioned speeches about their glorious mission or lofty goals, but their actions reveal their true motivations. They want their own fame, power, and fortune more than anything.


Are you the type who says the right things, or the type who does the right things? Is your self-interest served by meeting a higher purpose?


Put yourself to the test by being intellectually honest in answering the following questions:


1. Are you willing to give up some of your turf for a broader purpose?

In 2005, a $20 billion company underwent a major reorganization, and one of the senior executives approached the CEO to tell him a portion of the executive's new job really should belong to someone else.


What was he thinking? He was in a horse race to succeed the CEO and already had the smallest scope of all his peers and fellow contenders for the top job. Under those circumstances, many leaders would try to expand their span of control. But he believed the organization would work better if certain areas went to someone else.


This leader was not naïve or unambitious. It's just that he truly wanted the business to succeed. Of course he hoped that his thinking would be recognized and appreciated. When his boss and the board get close to the succession decision, no doubt they'll remember that this person revealed he's not a greedy empire builder.



Caring about the good of the organization can mean ceding a portion of your span of control, voluntarily agreeing to cut back on projects in order to meet a budget goal, or sharing part of your leadership responsibilities with an up-and-coming leader who needs a development opportunity.


It might also mean giving up valued team members who would better serve the organization in a different capacity. In today's global organization, letting go of good people is almost an imperative.


2. Do you place a high value on relationships?

Leaders who lead with a purpose understand that they must build and sustain relationships -- with customers, suppliers, employees, colleagues, and others whose favor or contributions are important to their organization's success.


They don't see relationships as an immediate exchange of benefits. Their primary concern is not "What's in it for me?" In fact, it may not even be clear exactly how a relationship could ultimately prove beneficial. Nonetheless, they're happy to devote the time and energy.


One legendary leader who understood this was John Weinberg, the former head of Goldman Sachs. He was famous for regularly calling to check in on clients, even when he had nothing to sell them. He just wanted to be available to them to help with any issue he could.


The payoff was that he built deep, trusting relationships with his clients, who would often turn to him for advice. These relationships in turn helped solidify the reputation and strength of his business. It's part of what brought him recognition as a great leader.


3. Can you value -- and leverage -- different perspectives?

If you lead with purpose, you understand that there's little value -- and much short-sighted paranoia -- in dismissing or deflecting viewpoints that differ from your own.


If you try to create a picture from a higher altitude, namely the corporate viewpoint rather than a departmental or divisional viewpoint, you'll be better able to reconcile conflicts. To do that, you have to be able to step into someone else's shoes and see things through their eyes.


Are you given to clashing with other leaders in your company, or do you seek to build strong working relationships with them based on your shared commitment to the common good of the organization? Do you automatically push back on customer demands for earlier delivery dates, discounts, or more favorable credit terms, or do you try to understand why these requests are being made and work with the customer to arrive at solutions that benefit both parties?


Leaders who put purpose before self can recognize, accept, and even leverage different perspectives -- often to tremendous advantage


4. Are you comfortable with transparency -- because you have nothing to hide?

Transparency is the order of the day, and people are more willing to work with, work for, and partner with people they trust. Trust is, after all, the crucial glue of collaboration.


Those who are narcissistic, who cut corners, and seek the easy path when the right path appears too difficult, and who clearly put themselves first, are less effective because they're held in much lower regard.


If, on the other hand, a higher purpose guides your actions, others will know where you stand and what you're about because you have nothing to hide.


Mark Twain observed that if you tell the truth you don't have to remember anything. He offered this as a humorous observation, but as a leader you should take the spirit of the message seriously. If you put purpose before self, you'll spend little time covering your tracks, "spinning" bad news, brandishing your image, or seeking to rebuild trust with others. And, as a result, you'll have that much more energy to devote to your purpose.

Unplugging Electric Vehicles

In the late 1990s, Ford entered the market for battery electric vehicles as part of a broad program to develop and test new vehicle technologies. Ford put into service 1,500 electric versions of the compact Ford Ranger pickup truck between 1998 and 2001. Eighty-five percent of the vehicles were leased to municipalities and fleets, with about 90 percent in the California market. The last EV Ranger lease expires in September 2006.

In addition, Ford imported 362 Th!nk City battery electric vehicles into the United States in 2001 as part of a customer evaluation fleet in California and New York. Ford had acquired the Th!nk technology from a company in Norway.

With both vehicles, the intent was to test the vehicles to gain real-world experience with the technologies. Our conclusion was that other technologies, notably hybrid electric vehicles, offer more versatility, better range and, depending on the source of the electricity used to charge the batteries of all-electric vehicles, better environmental performance.

The U.S. NHTSA required that the Th!nk cars be taken out of service in the United States at the end of their 36-month lease periods, by scrapping or exporting them to other markets. Ford received and considered various offers to buy the cars and export them to other markets at the end of their lease period. In addition, Ford attempted to find a way to return these vehicles to the Norwegian market for further use. None of these plans was approved, mainly due to a weak market equation, apparently low demand, and concerns about warranty and servicing costs and potential liability exposure. Ford began dismantling vehicles as they returned from lease in May 2004.

A public action by Greenpeace at Ford Norway, demanding that Ford stop scrapping the cars and return them to Norway, drew attention to this matter in August of 2004. Subsequent meetings with the Minister of Transport, Greenpeace, Ford Norway management and media in September confirmed a high level of interest and emotion around the Th!nk City cars.

The Norwegian government was firm in pointing out its historic support for and investment in the Th!nk initiative. Ford of Europe committed to suspend scrapping the vehicles. Re-evaluation of the issue led to the conclusion that returning the cars for re-sale in Norway was then supported by a viable market equation and represented a responsible course of action.

A similar situation arose when Ford began dismantling EV Rangers as they returned from lease in May 2004. Many of the vehicles collected were used for additional testing and were decommissioned through a component recycling process for future use and warranty obligations. However, some lessees felt passionately that they should be able to keep their vehicles indefinitely and launched various kinds of protests to secure approval to do so. In response to the high level of customer concern, Ford suspended the dismantling and arranged with Blue Sky Motors, Inc. of California to administer the sale of EV Ranger battery-electric pickup trucks to current and previous lessees.

Under the arrangement, current leaseholders are given the first right to purchase their vehicles "as-is" at lease end for $1. Unclaimed vehicles will then be offered for sale to previous EV Ranger lessees through a lottery selection. Those wishing to purchase the vehicles will pay a refurbishment and pre-delivery inspection fee of $6,000 to Blue Sky Motors, which will offer any remaining EV Rangers at fair market value to the general public after the lottery is concluded. Ford is not receiving any profit from the EV Ranger transactions but will save the cost of decommissioning the vehicles.

Green, the Color of Survival

By Warren Brown
Sunday, December 3, 2006; G02
Washington Post


LOS ANGELES


You might have read or seen news reports from here last week saying that the world's car companies are going green for the 100th anniversary of the Los Angeles Auto Show.

The news reports are right and wrong.

The car companies are going green, with practically every major automaker here showing off or promising to build energy-efficient vehicles powered by electricity, ethanol, hydrogen, low-sulfur diesel, biodiesel, compressed natural gas, propane or myriad combinations thereof.

But the reports are wrong for suggesting that all of this is being done for image, that it is somehow a public relations ruse meant to placate consumers who are passionately committed to energy conservation and who, thus, are desperate for new fuel-efficient technologies.

Most American consumers are pocketbook activists. They are desperate for fuel efficiency only when gasoline prices rise. When those prices fall, they become horsepower recidivists, rapidly returning to their fuel-wasting ways by buying the biggest vehicles with the biggest engines, regardless of whether they actually need them.

The entire American economic structure is wedded to that kind of careless greed. One has to look no farther than Los Angeles, a sprawling metropolis of highways leading to housing developments covering acres -- forcing rainfall, when it comes, to flow in often ruinous directions.

The car companies did not dictate that lifestyle. American consumers chose it, just as many of them, even at home in the Washington metropolitan area, repeatedly are choosing to buy and build energy-consuming mini-mansions many highway miles away from their workplaces -- which, of course, means that most of those people are hopping into cars and trucks, often big cars and trucks carrying one person each, to get to wherever it is they think they have to go.

Again, it is American consumers, acting of their own free will, who are making those choices. No evil force is controlling their minds. No one is forcing them at gunpoint to march into real estate offices to buy the biggest house, or into an automobile dealership to buy the biggest car or truck. No one is pushing them to do inexplicably odd things such as wasting human energy waiting outside of a store to buy an electronic game that consumed energy in production and will consume more in operation. They are doing all of those things of their own volition.

That being the case, why did every major car company here feel compelled to tell the international automotive media during the Los Angeles show's media preview days that it is investing billions of dollars in the development of new alternatively fueled vehicles?

It's simple.

It's business.

The car companies have no choice.

Unlike many of the American consumers they supposedly are trying to impress, the car companies have studied and accepted the global realities of oil. To wit: The world is demanding more of the stuff, but there is less of it to go around.

That means, sooner or later, there will not be enough of it for everybody, certainly not enough to fuel the growing number of cars and trucks around the world. That means many car companies could go out of business if there is no way to affordably fuel the cars and trucks they make.

In short, the "green" concern here has less to do with environmental image building than it has to do with continued cash flow.

It is for this reason that I applaud the honesty of G. Richard Wagoner Jr., the chairman and chief executive of General Motors, the world's largest car company, for using the Los Angeles show to announce GM's bold, new multibillion-dollar plan to produce and sell the world's largest fleet of electric cars. Wagoner minced no words.

Pressures on the world's oil resources have created "serious concerns about energy supply, energy availability, sustainable growth, the environment, and even national security," he said. And those "serious concerns" translate into real concerns about the continued existence of the automobile industry itself, he said.

As a result, he said, GM is reinvesting in electric vehicles that include plug-in hybrids that can run on electricity and gasoline; dual-mode, self-contained hybrids that use no electric cords, but that can use electricity for city runs and light-load highway runs, and switch to compressed natural gas or some other fuel for full-load highway runs; and hydrogen fuel-cell vehicles that use hydrogen to generate the electricity that provides drive power.

And there is a possibility that GM will team up with DaimlerChrysler to use that German company's advanced, high-mileage, clean-burning BlueTec diesel technology for many of its larger cars and trucks.

GM will do those things because BMW, DaimlerChrysler, Toyota, Honda, Nissan, Hyundai and the emerging car companies in China and India will do those things, because they all know a truth that still too many American consumers, wedded to the childish notion of eternally cheap gasoline, refuse to accept: The world is running low on oil.

Without the intervention of alternative fuel technologies, no oil means no cars or trucks. No cars or trucks mean no automotive industry, along with all of the resulting negative economic effects of that industry's demise.

It's painfully simple. "Going green" has not much to do with altruism. It has little to do with image. It has everything to do with staying in business.

He who laughs last, laughs the loudest.