Alan Guarino leads the Global Financial Technology and Electronic Trading Practice at Korn/Ferry International. He graduated from the US Military Academy at West Point and has an MBA in Management. He is the author of, "Smart is Not enough!" (Wiley 2007). The book challenges conventional wisdom on what it takes to be an outstanding executive.
Following is a conversation he had recently with Richard Torrenzano:
Question: With the myriad of leadership theories out there, which is most relevant today?
AG: Transformational Leadership (TL) is the best theory for today’s environment. TL focuses on appealing to the heart of the employee to inspire achievement. This approach pulls out what I call the employee’s discretionary energy - the energy employees possess in excess of the minimum needed to keep their jobs. When employees are effectively led, they give all they have, not just what is needed to stay employed.
RT: Leaders: born or made?
AG: Leaders are made from the stuff they were born with. Most people can be effective leaders but few can be exceptional. Like any other talent, those born with leadership potential must learn to use it effectively; so in this way leaders are “made” from the sum of their experience and, hopefully, good training.
RT: What is the most important trait a leader must possess to achieve long-term success and why?
AG: Integrity. Dishonesty is eventually exposed! Dishonest people also lack strength of character and no one can lead without strength of character. Employees and boards of directors all need to be able to trust the organization’s leadership. When people learn that a leader is not direct, honest and forthcoming, all is lost and people begin to hold back, develop cliques, and form dysfunctional alliances designed to create security.
RT: In your public appearances you’ve asserted CEOs need to behave in an unimpeachable manner. Isn’t that holding them to a higher standard than society in general?
AG: The question is whether boards should tolerate bad CEO behavior if a company’s financial performance is strong. But it eventually leads to a death spiral – the numbers won’t hold up and by the time the numbers turn to show the businesses' faults, it’s too late.
Bad CEO behavior creates a dysfunctional environment that leads to employee defections, a lack of pride in the organization, and a general breakdown of leadership. When these things happen, the numbers quickly tank. Great CEOs are people of character and any deviation results in eventual decline of the organization. Look at the public examples of what happens when leaders behave badly – Nixon, Spitzer, etc.
RT: It seems the U.S. military is far ahead of corporate America when it comes to cutting-edge leadership development? Why is that?
AG: The U.S. military, the individual services and their educational institutions, such as the United States Military Academy were remade from the crisis of Vietnam when the military lost its sense of integrity and needed to re-think its leadership model.
From this the all-volunteer military, specifically the Army, was born.
Volunteers need to be led in ways that will inspire them to continue in the military as a career. They also require more autonomy and more opportunities to grow than do enlistees who were forced into service. As such, the Army built a significant honor/integrity education program and delivered it across the force with a leadership model oriented on individual decision making and getting authority and decision making to the lowest levels of the organization. They called this “power down.” What’s amazing is that this was happening in the mid-1970s and 1980s when corporate America was still fairly bloated with the “organization man” and extremely hierarchical.
Volunteer soldiers don’t just follow orders – if you are to lead them toward a career of military service, they need to be inspired.
RT: Which are the toughest organizations to lead?
AG: Peer organizations are toughest to lead. If you can get your peers to follow you, you are gifted. This applies to volunteer organizations as well - charity boards, industry groups and the like. In business, professional services businesses are the toughest – leading consultants is often referred to as cat herding. It takes a special leader to muster these individual thinkers to a common pursuit.
RT: What are the critical skills needed for 21st century business leaders?
AG: Innovation and creativity --- with the ability to execute plans are the key skills needed in 21st century leaders. Western businesses only advantage will be invention – labor, manufacturing and infrastructure is less expensive in the East. So, Western businesses need to be the great innovator to remain leaders.
RT: Can large company CEOs learn from entrepreneurial leaders?
AG: Yes. They can learn how to build cultures of action, invention, pride, and customer focus. Smaller companies get people to work harder and for less money than they would accept in a larger company. Why? Because the employee feels another form of currency – I call this Triple E-P, employees feel: Engaged, Empowered, Excited, and Proud.
RT: You’ve run start-up businesses, commanded a company as an Army Captain and currently chair the board of a not-for-profit here in New York. Please comment on the leadership experience you have most enjoyed and their differences?
AG: Leading a company in the U.S. Army is like no other leadership experience in the world. Neither Jack Welch, nor the founders of Google could possibly experience the thrill of that leadership role. As a military officer you are building a team of people willing to put their lives at risk for the benefit of others! They must follow you from a technical, tactical, strategic, personal, and faithful/loyal perspective in order to be successful – that is total leadership and is unequaled in the business and not-for-profit world.
RT: How can you tell if someone is truly a successful leader? Does charisma play any role in leadership?
AG: Charisma is a raw material that has a role in success, but becomes empty if other abilities are absent. A successful leader is measured by the results he/she gets from others and from the following of loyal employees they gather over their years of leadership. Every other measure is fleeting - numbers, market leadership, products invented etc. Leaders bond with and build people. The people who respect and learn from them are the measure of the leader.