What Makes a Business Leader Tick


June 20, 2007

by Marshall Goldsmith

Anthony Smith is an old friend who has written a new book called The Taboos of Leadership. I love the title. In this interview, Tony shares some of his thinking on leadership—and some insights from the executives he has met over the years. Here are edited excerpts of our conversation:

You have years of consulting experience. What is an observation about chief executive officers that might surprise our readers?

I am often astonished at how deeply CEOs really love their work. Some have gone as far as sharing with me, “You know, Tony, as much as I love my family, it’s work for me to leave this place, to leave the office and spend time with my family—as much as I love them.” I even had one client tell me that if he had to give up either sex or running his company, he’d give up sex.

In my work, I have observed that my clients have very similar reactions to their work (although I have never discussed the “instead of sex” idea with them). Have you encountered CEOs who claim they would be doing what they’re doing for no pay because they love it so much?

Absolutely. John Mackey, who founded Whole Foods (WFMI), for example, is so passionate that he told shareholders to pay him one dollar a year and that he’d use his stock options to benefit causes the company was committed to. He’d already made his money; It was no longer an issue. At the peak of his earnings, he requested that he receive no more than 14 times his average worker’s pay. Patagonia’s former CEO Michael Crooke has done somewhat the same thing.

A number of CEOs I’ve worked with might even pay to be able to do what they’re doing because they love it so much. The difference between them and “cause-driven” CEOs is that some of them aren’t willing to go public with this philosophy. Regardless, they continue to draw a paycheck primarily to support their worthwhile causes.

Tony, I believe that Bill Gates and Warren Buffet are two great examples of this type of thinking. I hope that even more leaders will practice this give-back philosophy. What else is surprising?

Another surprise is CEOs who just feel incredibly fortunate. Often they say that they don’t understand why they’re so lucky to be able to run a company, to be in their position, that one day they’re going to be discovered. Psychologists call this the impostor syndrome, where people feel they don’t really deserve their position—any more than lots of other people—and are just lucky to be there.

The line of reasoning is, “If they knew how much fun I was having, how I get to work with fabulous people, how I’m getting paid millions of dollars…one of these days someone is going to find me out.” These CEOs consider themselves really blessed to be in their positions. They fully realize that there are others who are qualified to do their jobs, and they’re just thankful they’re the guy who got the nod (see BusinessWeek.com, 3/22/07, “Golden Parachutes: Cut the Cords”).

One of my favorite professors, Bob Tannenbaum, used to ask executives a great question, “What do you know about yourself—that you would be hesitant to share with other executives?” As you mentioned, they usually talked about their fears and insecurities. One CEO told Bob, “Everyone thinks that I have a vision. I don’t have a clue where we are headed.”

Can you tell my readers about the type of work that you do?

My firm, Leadership Research Institute, has 40-plus consultants all with advanced degrees in organizational/industrial psychology, management theory, and/or organizational behavior. We recognize that a huge difference exists between general management and leadership.

That’s an important distinction. Can you elaborate, please? 

If you look at accepted definitions of management vs. leadership, management, like accounting, is a control function that focuses on maintaining a company rather than making a change or growing. Leadership addresses these far more delicate change issues.

We begin by asking the organization’s leaders, “Where do you want to take this company? In an ideal world, what would your people be doing? What would they value? How would they behave within the organization?”

From there, we try to help them develop their vision or ultimate goal for the company, while we conduct extensive role research through employee surveys, economic data, and interviews—the classical anthropological approach. We gather data from almost every level in an organization focused on to what degree people understand, embrace, and desire what the ultimate objective or vision or goals are of senior executives and the CEO. We then do a gap analysis on perceptions of CEO objectives…and then we help the organization figure out how to close that gap.

Are CEOs often surprised by the data that come back from their employees?

CEOs realize that their companies have stockholders and need to make money. I think executives are dumbfounded that people working in their companies sometime seem to forget that they’re attached to a commercial enterprise. While it sounds crass, the fact that the company has to hit the bottom line shouldn’t be a surprise to anyone.

When you work with top executives, how long does it take them to open up, get to the heart of their issues?

The variance is huge. The more bottom-line oriented CEOs cut straight to the chase. With others, where the walls are thicker, it takes a handful of dinners and casual conversation before they reveal their issues.

I’m a direct person. I’ll look somebody in the eye and say, hey look, my ability to help you is absolutely contingent upon you being very direct with me about what the real issues are, what you think your strengths are, what you think your weaknesses are, what you really struggle with, and what really keeps you up at night. When clients are open and willing to change, I can almost always guarantee my impact.

The more seasoned the executive, the more mature his or her relationship is to consultants. It’s kind of like dating at an older age. If you’ve been married three times and you’re back out on market at 53, there’s probably not a lot of b.s. you’re going to put up with.

Can leadership be taught?

Leadership can only be practiced—it’s the process by which an individual pursues a vision and intentionally seeks to influence others to perform various jobs to their full potential, for as long as possible, to realize that vision. The way people tend to become leaders is that they have successfully practiced leadership over time and done it effectively.

If managers are getting people to do their jobs to their full potential, day in and day out, they are vastly increasing their firm’s probability of creating a successful enterprise. Individuals who can do that, even from the early stages of their careers, are successfully practicing leadership.

Peter Drucker said the management was a practice, not a science. I agree with your philosophy that leadership is a practice—and that people at all levels in the company can work on this practice. How can readers get in touch with you?

I can be reached at AFSLRI@aol.com or www.LRI.com.