Charisma is Overrated, and other Good to Great Lessons

It’s easy to draw up a list of charismatic business leaders. Richard Branson. Coco Chanel. Lee Iacocca.

These are the kinds of people we make movies about. They build or reinvent massive companies through the sheer force of their personalities. Everyone has tales of these leaders taking incredible risks that somehow paid off.

There’s plenty of research and discussion out there about whether flashy, charismatic leaders actually help a company. Or whether that help is only temporary, and the organization risks crashing down once said leader leaves. It’s an interesting question, because it challenges the American idea of a leader: persuasive, powerful, the center of attention. Is that really what we want in the man or woman running the show?

The first place I read about this idea was “Good to Great,” the mega-popular management book by Jim Collins and an army of researchers. Collins and the team wanted to figure out what turned a good company into a great one. They spent years poring over financial statements and conducting interviews, finally emerging with a list of eleven companies that made the transition.

Now, this book is 15 years old. Some of the “great” companies it highlights have tumbled pretty far since then, and you could argue that “Good to Great” is not an air-tight recipe for success.

But the book made me reconsider some of my long-held thoughts about business. So I figured I’d present those ideas to you in the hopes of doing the same.

Charisma is overrated

Let’s take a look at Lee Iacocca. There’s no doubt he rescued the Chrysler motor company from disaster after becoming CEO in the late 1970s. Chrysler outperformed the market nearly 3-to-1 halfway through Iacocca’s time there, according to Collins.

Then Iacocca got…distracted.

At least, that’s what it looked like. He started appearing on late-night talk shows, doing commercials and even considered running for president. In the back half of Iacocca’s two and a half decades at Chrysler, the company’s stock lagged far behind the general market.

Not one of the eleven “Good to Great” companies had a traditionally charismatic leader during the years they made the transition. The people at the helm of those companies were modest, “more plow horse than show horse.”

Some charismatic leaders take the credit for their companies’ wins and blame others for failures. The “Good to Great” leaders were the opposite. As Collins puts it, they looked out the window to praise others and looked in the mirror to take responsibility when things went wrong.

You should have a “stop doing” list

Chances are you’ve got some Kimberly-Clark products in your home. The company makes Kleenex, toilet paper and diapers. But it wasn’t nearly as ubiquitous in the 1970s, when Darwin Smith took over as CEO.

Lots of leaders like to solve problems by growing their organization’s scope. Do more things. Chase a million different ideas. Smith came in with a list of things he wanted to stop doing.

After Smith took over at Kimberly-Clark, nobody had a title unless they held a position where the outside world needed them to. If an employee couldn’t justify having at least 15 people reporting to them, nobody would report to them. And, because he wanted to stress that Kimberly-Clark would focus on consumers, he pulled it out of all the paper industry trade associations.

It’s easy to throw darts at the wall and hope one of them sticks. But the “Good to Great” companies had the discipline to stop doing things that clearly wouldn’t work. They stayed lean, and it paid off.

Stop trying to motivate your team

Long before they transitioned from good to great, the companies in this book spent years putting the right people in the right places. They often hired based on work ethic and values rather than technical skill or education. If someone wasn’t working out, they moved them to a position where they would thrive or let them go immediately – no procrastination.

When they finished this process, these companies never had to worry about motivating employees. Everyone working for them did so because they believed in the company. They wanted it to succeed.

In fact, Collins argues that great companies should worry far more about killing motivation than creating it. Rules and procedures designed to keep underperforming workers in line just frustrate people who work well on their own. If you spend time up front getting the right people on the bus – and the wrong people off – you don’t have to worry about what your employees do minute by minute. You’ve already selected hard-working people you can trust.

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