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A 12-Step Recovery Program to Break from the Pack—Step 3: Set "The Way"

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To lead the pack, you must define The Way for your organization. The Way has two components: path and tone.

This article is excerpted from Break From the Pack: How to Compete in a Copycat Economy and is the third in a twelve-part series.

Step 3: Set "The Way"

Many a company is drowning in plans, spreadsheets, mission statements, and values credos, and yet its stakeholders (including employees) are still not clear about where the organization is going and why they should care. That's a big opportunity for you to establish a concise, urgent, and inspiring direction for your company. I call it "The Way," in deference to "The HP Way" that defined the credo and values of Hewlett-Packard during its most lucrative decades.

To lead the pack, you must define The Way for your organization. The Way has two components: path and tone.

Your Path

As you pull together the strategic concept for your organization, you can begin with some basic questions that will help you define the process and reach a conclusion:

  • Where are we heading, what are our priorities, and how will we conduct business to break from the pack?
  • What will we do that will set us apart as distinct, exciting, and special?
  • Why do we need to do this?
  • What are our individual roles in making this quest successful?
  • Why should it matter to our employees and customers if we succeed?

As a leader, if you can't articulate the answers, then initiate dialogs about the questions to bring a precise arresting focus to your organization.

Ultimately, your strategic priorities and rationales should be succinct, lucid, unmistakable, easily understood, and easily communicated. They should be free of ambiguity, fuzziness, professional obfuscation, psychobabble, vague generalities, excessive verbiage, and thick documentation. (No 100-slide PowerPoint presentations allowed.)

Keep in mind that your path must buck some conventional wisdom and strive to rewrite some industry rules. Seamus O'Connor's fast-growing young company Airtricity bypasses utilities and supplies wind power directly to retail customers in Ireland and England. By pocketing the middleman's markup and thus boosting margins to nearly 20 percent, O'Connor says with justifiable pride, "We totally rewrote the rules." His is the kind of path you want to pursue so that you can ultimately speak with his kind of pride.

Your Tone

Tone is the climate, the "vibe," the mood, the atmosphere that expresses your organization's values and soul. New York City Mayor Michael Bloomberg, explaining how he established his dominating Bloomberg LP financial-data empire, states that one of the most important things done by a CEO or mayor is to "set a tone." Here are some elements of strong, break-from-the-pack tones in other organizations that I'm pretty sure Bloomberg would approve of.

  • Boldness— Organizations with strong tones strive for breakthroughs. They avoid reactiveness and mimicry. When Stephen Privett came on board as the new president of the University of San Francisco in 2000, the local press asked him about "the competition." His response: "We compete against our own standards. Nobody imitates their way to greatness." The tone he set has helped galvanize USF to develop distinctive new programs in its professional schools and fresh new approaches to liberal arts pedagogy. These initiatives helped propel the university to several national "top 100" lists in both undergraduate and graduate education for the first time.
  • Aggressiveness— On-the-offense tones are powerful because they concentrate people's attention on creating new products and markets, and attracting new kinds of customers. Defensive tones focus people's attention primarily on protecting the company's product line and defending its market share from competitors. That's fine, to an extent, but remember former HUD secretary Henry Cisneros's observation that managers can no longer be content "managing for steady state" because the incessantly changing market will no longer allow steady-state success. Forbes publisher Rich Karlgaard defined the difference between offensive and defensive tones when he explained why talent and buzz are flowing toward Google at the expense of Microsoft. "At Google one works to change the world," he said. "At Microsoft one works to protect the Windows and Office profit margins. Which mission do you think (the most talented) people prefer?"
  • Collective impatience and urgency— Before Pixar was bought by Disney in 2006, President Ed Catmull constantly warned his people about the dangers of complacency. Even today, as head of Disney animation, he's quite candid that "the success of Toy Story can make you think that you're good at everything…. It's easy to fool yourself." The tone at Pixar was marked by a constant hum of dissatisfaction with current results and a visceral resolve to make quantum improvements. "Every single one of our films has been the worst thing you've ever seen," said Pixar executive vice president John Lasseter—until brutally honest working sessions catapulted the product to new heights.
  • Hope and optimism— If people are to strive for extraordinary goals, they must feel confident that they can hurdle barriers. As a leader, the tone of optimism and hope you set is essential. As motivational speaker Keith Harrell notes, "A dead battery can't charge another battery." When Katharine Graham ran the Washington Post Co., she was well known not only for her personal, can-do optimism, but also for urging her staff to get on with it and "don't tell me 'never.'" Hope and optimism are vital parts of a healthy organizational tone because there are so many forces of resistance to anything that violates conventional wisdom. Ex-GE chief Jack Welch says that one of the most important things a leader must do is to constantly resist "the gravitational pull of negativity." I believe that people aren't just "born" leaders; they can learn to be leaders. But my research suggests that some people come to the table with certain attributes that make it easier for them to learn. One of those attributes is optimism. Frankly, if you're not an optimistic person yourself, it is very difficult to create the collective tone of hope and confidence that is so necessary to achieving break-from-the-pack outcomes.
  • Clear parameters defining appropriate and inappropriate behaviors— If a leader doesn't set clear parameters about what's acceptable and what's unacceptable, says Public Financial Management CEO John White, then "all actions are acceptable," which is unacceptable. White encourages—indeed, expects—proactive and daring decisions from all PFM consultants, but at the same time, their judgments have to be aligned with the company's core values of client protection, ethics, transparency, collaboration, and talent development. These parameters shape PFM's tone. Tone imposes discipline, control, and stability in an ambiguous, chaotic business environment—even when the leader is not in the room.
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