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Voice of Business: Good leadership builds a competitive advantage
Dec 27, 2013 | 4100 views | 1 1 comments | 30 30 recommendations | email to a friend | print
TOYOTA had to create a demand for the Lexus, above.
Photo by Phillip Chase | Courtesy of Toyota
TOYOTA had to create a demand for the Lexus, above. Photo by Phillip Chase | Courtesy of Toyota

By Jim Smith

Davis Chamber CEO

“The worst advice ever given was ‘If it ain’t broke, don’t fix it,’” said Scott Kisting, Chairman and CEO of AmericanWest Bank. He agrees more with Winston Churchill, who said “change is the price of survival” during the dark, early days of World War II. 

Kisting spoke at a seminar on the topic “How to Create a Competitive Advantage for your Business” that I was privileged to attend. So many of the concepts he taught correspond to my own experience in business that I thought I would share a few key points that stood out to me.

His comments on the art of leadership focused on the importance of “leading versus managing” your company. He defines leadership as “the act of establishing a vision and then communicating it in a way that motivates people in that direction.” 

He opened our eyes to some basic differences between a leader and a manager. For example, if you were scheduling a one hour counseling session with one of your employees, a manager would spend 50 minutes on performance review and 10 minutes on encouraging change, but a leader spends 50 minutes on how to help the employee improve. 

“What can I do to help you?” is the leader’s mantra.

“Leaders don’t point fingers, they point the direction.” 

The vision of where you want to go with your company, and the communication skills to motivate people to want to go with you, is leadership. In fact, Kisting feels that the only sustainable competitive advantage you have in your company is the quality of your employees. Some companies focus on product advantage, but there are products that cannot be copied by your competitors and sold at a lower price. 

The driver of success is service quality, and that is a reflection of the quality of your staff.

He used an interesting example to illustrate. When Toyota decided to market an upscale automobile, they came out with Lexus. In essence, they added roughly $3,000 in upgrades and increased the price by $10,000. The leadership team at Lexus knew that they had to create a demand for their product that went beyond the norm in the industry. The vision was to make owning a Lexus an “experience,” something that provided prestige that was unparalleled in the industry. 

What would make it all work was a rigorous emphasis on creating a sales and service experience that was truly amazing. They trained and re-trained their Lexus sales force and service departments on how to delight buyers, and the result exceeded everyone’s expectations. 

They knew that anyone could add upgrades to a car, but by helping the entire force catch the vision of their leader they were able to create a new ownership experience that paid tremendous dividends.

Kisting’s comment about creating a company culture was spot on ... “Create an environment that you feel would be a great place for your kids to work. If not, why are you messing up everyone else’s kids?”

It is harder to take a company that’s doing well to the next level than it is to turn-around a company experiencing significant challenges. 

When leading a struggling company many of the decisions are obvious, and people expect you to change what has been done in the past. 

But taking a good company to the next level is not so easy. Most of the employees feel that “things are good enough” and that “it has been working for years.” 

In many ways that may be true. But the apathy reflected in that attitude can be infectious and prevent the kind of growth that is necessary if we are to remain competitive. 

When you think of leadership in this light it all sounds easy, intuitive. But one of my favorite old adages is that “there is no job so simple that it cannot be done wrong.” 

You build a competitive advantage by staying focused on the vision, then motivating others to join you on the journey. 

Comments-icon Post a Comment
December 28, 2013
Great article Jim. "What can I do to help you" must be what every management person says to their people every day.

I must however disagree with Kisting in leadership being an art. It is a science. There is a science to everything in this universe and people are no exception. The science of people tells us how they react to whatever management does and does not do, and it tells us why they react the way they do. So from the science of people, we can know what the right things to do are as well as the wrong things to do. Doing the right things will lead your people to be fully engaged Superstars.

Most executives erroneously think their job is to do whatever they must to get the work done. That results in them attempting to direct and control the workforce. Big mistake! No one likes to be told what to do and consider it a mark of disrespect. In addition, every person wants to be really good at what they do, be a Superstar. If management consistently helps them to become a Superstar, they will literally love that and will repay that love the only way they can - by throwing everything they have at their work.

There is much more to this science such as we all have the same basic needs, the same values, and about 95% of us are conformists who waste a huge amount of brainpower conforming and will conform to bad leadership just as easily as good.

Stephen Covey senior wrote that the possible performance gain from great management is 500% and my own experience agrees with Covey because that is about what I achieved as a manager.

Thanks for the article, Ben
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