Outside-in Leadership

Synopsis
The concept of business leadership generates endless discussion, commentary and theorizing. Everybody wants 'the formula' that helps executives conquer the myriad challenges of management. Indeed, dozens of books and articles espouse distinctive models and mantras for success in the executive suite - many of them penned by self-appointed celebrity leaders. Many of these treatments focus on an inside-out approach that suggests the process of being (or becoming) a successful leader is largely a function of personal analysis, aspiration, improvement and fulfillment. The focus is on the leader him/herself, with an emphasis on finding the right mix of skills, tools and behavior to become the next Jack Welch. This approach is short sighted, and ultimately doomed to failure if there is no commensurate attention to the external factors in any leadership situation - the so-called outside elements.

Leaders who desire true success must strive to be credible and relevant with the major stakeholders that impact their company, and even industry. To do this, they must follow an outside-in orientation that goes beyond personal goals and seeks to identify and address the external realities that shape their particular leadership situations. In essence, defining a leadership role or identity for executives shouldn't be an insular exercise in academic experimentation or personal fulfillment. Rather, it must be a strategic process as rigorous and methodical as the development and promotion of a brand. Indeed, the process should ideally be similar to creating and burnishing a product or corporate brand.

As with traditional branding, the 'product' - in this case, the leader - is certainly crucial. But it's just the starting point. Other factors must shape the final identity, purpose and inherent 'promise' of the product/leader. This is precisely where many leadership recipes fall short.

The context: Gurus and silver bullets
Many leadership models and success stories detailed in a flood of recent books and articles are based on a type of 'star system,' where the person is both the medium and the message, and personal growth and validation is the objective. (We note the recent book by Jim Collins, From Good to Great, as a prominent exception.) In these cases, leadership success is rooted on leveraging, or expanding, the talents of the individual leader and/or adopting new management formulas or roles. Many treatments are explicit or implicit commercials for the emulation of past and present business legends, while others focus on models for personality diagnoses or ready-to-use formulas for success.

These approaches typically tout an inherently solipsistic model, where leaders experiment with various recipes and roles for personal success. Self-actualization and self-improvement are the underlying mantras. The implication, of course, is that individual aspiration and success will translate into broader corporate achievements.

The shortcomings of the star model
There are three fundamental shortcomings with this 'cult of personality' paradigm, however.

First, these models are often bereft of context, particularly those that prescribe a 'quick fix' approach. There is often little or no consideration for how these individual prescriptions can fit into various scenarios or situations. The focus on the self is often at the expense of attention to the circumstances and needs of a particular company. It essentially ignores the reality that a company's success depends on more than the will of its leader, and that one of the core elements of leadership is to foster loyal followers. (Perhaps a fitting example of this orientation is 'chainsaw' Al Dunlap, who sought to apply his scorched earth formula across several companies, with dubious consequences for many stakeholders - notably employees - and ultimately his own reputation.)

Second, many of these commentaries or prescriptions base their solutions on famous, successful CEOs, and on related case studies where a particular leadership style or approach ostensibly worked wonders. As such, they are based on the premise that success in one company or situation can be exported to another. Many business leaders doubtless wish it were so easy. Much like in many other fields (again, think brand marketing and advertising) there is no silver bullet that can be effective unilaterally across different situations.

Third, and perhaps most important, there is limited consideration in many of these recipes for the fostering of long-term relevance and trust with stakeholders. Success is defined either in personal terms - related to the CEO's enhanced profile and reputation or personal success (wealth, fame, etc.) - or in financial metrics for the related company. If the company's stock price has risen, the logic goes, then the approach must be working and the leader must be good. Though there is merit in this argument and research does suggest that business success and CEO credibility go hand-in-hand, we argue that a truer definition of success must include strong, lasting relationships with key stakeholders - inside and outside the company. This measure goes beyond short-term financial performance or positive hype.

Defining successful leadership
Building on our central argument, our interpretation of what constitutes effective leadership may differ from some popular success stories. In our holistic approach, successful leadership is about defining and promoting a positive, credible image for both the leader and the company, with the ultimate objective of establishing and/or building trust between the leader and key stakeholders: employees, directors, investors, customers, the media and others. Achieving strategic objectives and positive financial performance is a byproduct of the latter, but not an end in itself; financial results are inherently ephemeral, while trusted relationships are typically deeper and more lasting and can withstand difficult times and changing conditions.

This focus on trust is not merely a feel-good theory. Research conducted by Golin/Harris International indicates that the CEO is the brand's steward in building and sustaining the company's relationship with stakeholders, and that specific leadership qualities - including candid, frequent communication with stakeholders - are important factors in building respect and trust for the company and brand. The underlying premise, of course, is that the equity of the brand and company's reputation plays an important part in purchasing decisions and consumer loyalty.

Ultimately, defining and promoting a leadership model - with a related role and style directive for the executive in question - must go beyond an academic or theoretical discussion. The litmus test must occur in everyday business decisions and operations and through relations with a company's various publics. This cannot occur without acknowledgement of the forces and circumstances that surround the leader.

Building relevance and trust: A three-part foundation
Our model suggest that effective and relevant leadership must address - and incorporate -three key components:


• The leader's personal style, strengths and aspirations

• Corporate objectives and priorities

• Key stakeholders' needs and expectations

The first element, the innate and potential qualities of the individual leader, is the inside-out piece of the puzzle - and one that is often the focus of leadership strategies and discussions we've already alluded to. This element provides the original DNA for the leadership model, and includes the personal motivations and desires of the executive. The leader's qualities and ambitions are certainly a crucial ingredient and natural starting point, but they cannot overshadow other factors or be the only pillar in the infrastructure.

The second and third elements - which entail both the company's circumstances as well as external considerations - collectively provide the essential but often ignored outside-in perspective. Let's detail these two important categories.

Corporate objectives and priorities are, simply stated, what the company seeks to achieve and the hurdles and opportunities that do or could lie ahead. This category would include corporate strategic imperatives, pressing operational issues, important company initiatives and financial requirements and goals. But it's not enough to consider corporate issues and objectives.

The needs and expectations of key stakeholders provide the key contextual force, and reality test, in this model. These could range from employee concerns to customer perceptions and supplier needs and finally to the expectations of the all-important financial community. All stakeholders who typically affect a company's success - including the news media, government officials, employees and their families, shareholders/investors and even relevant interest groups - must be part of this mix. Individually and collectively, these are the audiences the leader must perform to, work with and win over. Ideally, the stakeholders should be prioritized according the particular situation of each company. The demands, opinions and requirements of these key audiences must help shape, if not direct, the actions and style of the leader.

Additional elements that should be incorporated in the formulation of any leadership strategy include the existing perceptions (if any) of key audiences regarding the company, its leadership and any related brands, as well as the immediate context into which a existing or new leader is framing his plans. The former can be confirmed through both anecdotal and formal research tools and media analysis, while the latter can be determined through a review of the company's situation and history - and could include the legacy of the former leader, potential allies and opponents, the corporate culture and brand identity and reputation.

The point here is that even the best leadership prospect and outreach program will not succeed if it clashes with deep-seated attitudes and beliefs or doesn't consider the informal mores, politics and 'baggage' of a corporate environment.

Once the various inputs have been confirmed and reflected in the planning process the final step is to filter the combined elements and tactics, which must be compatible and complementary, through the vision and mission of the company - the broader strategic roadmap and signposts of the enterprise. Without this step, the leadership plan or model runs the risk of irrelevance or opposition due to a lack of resonance with the values and 'reason for being' of the company.

Not just playing to the polls
Of course, much like in politics, there is limited value in simply surveying and fulfilling the key expectations and needs of major stakeholders - letting the outside factors dominate the formula. For one thing, that may be a quixotic exercise in compromise. But more importantly, it ignores the leader's own desires and ambitions. Without this personal stamp on the 'brand', there is no real leadership, but rather management by consensus and public opinion. Ultimately (perhaps as in politics) we suspect this model would have little credibility or lasting impact.

Ultimately, the theme underlying this entire process is that leadership simply cannot be designed, created or promoted in a vacuum, and that the personal (inside) objectives must be carefully balanced with the contextual (outside) factors.

From theory to execution: Building an outside-in leadership program
Gathering all this information and insight is just the first step in the process of leadership development. Leaders must then blend and balance the various factors to develop a personal mandate or campaign program - including a defined identity and multi-audience communications plan that addresses the three original tenets. The public relations program -- whether focused on personal growth, achieving strategic objectives or introducing a new executive -- must be compatible with and pertinent to the leader's personal assets and objectives, the company's outlook and plans and finally the needs and expectations of key stakeholders, including the company's own employees and managers.

Leaders intent on ensuring their credibility and enhancing their reputation can follow a strategic checklist heavy on research, analysis and diagnosis, and lighter on personal emancipation and popular management mantras. Through our work in this area, we've identified six discrete but related steps in this strategic approach, with corresponding tactics and actions for each phase in the planning and implementation process: I. Research II. Diagnosis III. Strategy IV. Training V. Action VI. Evaluation.

The role of communications
Once a leadership strategy has been developed based on the personal and background factors outlined previously, the plan must be implemented. That is where communications, or more specifically public relations, typically plays a large role. Picking up on the metaphor of the leader as a brand, communication and marketing tools must be leveraged to define and promote the leader with key stakeholders and to support the execution of the desired leadership role and style. The actual vehicles and tools - much like in advertising and marketing - will vary according to the situation, but they collectively should help to clearly position the leader, and related company, as a distinctive brand. If nothing else, communication programs based on new or emerging executives should ensure that key publics become aware of 'who' the leaders are, and what they stand for and/or aspire to. Whether they accept the positioning is a higher level of achievement.

Conclusion: More than just personal
An outside-in approach can help leaders, and their companies, develop and implement realistic, balanced, lasting and credible programs that link personal and corporate aspirations and benefits. The approach goes against the grain of many of the latest self-help management texts and leadership tomes that feature outsized personalities and focus on tips and formulas. But for leaders in training or about to achieve new positions, the ultimate focus must be on relevance and credibility.

In the final analysis, the prescription should help leaders not only determine the leader they are, and the leader they can be or want to be but also, most importantly, the leader they need to be.