Leadership - A discussion of traits, characteristics, and current news of leaders.

I appreciated some excellent comments from yesterdays post about a survey identifying the Top Ten Leadership Skills.

What would you put in the list? What skills or qualities do you think are most important for a leader?  Leave a comment below and let us all know.

One comment suggested that empathy was an important trait. I would agree. I think that empathy is embodied in the two skills listed in the survey – integrity and relationship building. Empathy is understanding and understanding builds relationships of respect.

Integrity involves making judgments and taking actions that are not self-interested but that are best for the whole of the group. While fanatics have uncompromising zeal for a goal or cause, leaders with integrity have uncompromising commitment to judgments that are best for their community of followers.  This judgment cannot serve the needs of the community of followers without empathy.  Leaders must solicit, respect and value the views of others. Leaders cannot allow these views to carry more weight in a decision if they are accompanied by money, power or political influence.

I think it is interesting that the word “integrity” is often used to describe not just people or their behavior but also objects. For example, a computer system is described as having integrity as long as it is not breached or corrupted by error. Integrity represents wholeness, intactness and purity in objects. Likewise, these same qualities can and should apply to leaders. Leaders with integrity cannot be breached or corrupted by outside influence. Their character is impervious to external pressure and grounded in morals or ethics that are immovable. By standing for something, leaders with integrity draw followers because followers know where their leaders stand at all times. Followers draw strength and confidence from this assurance.

If you are unsure about this principle of leadership, think about the recent scandals. In each case, whether Enron, WorldCom or how the Mark Foley situation was handled, the people in these cases let an external influence (political advantage, money, power, prestige) breach their character. In most cases of corruption, I would suggest that the people around leaders convince them that their behavior is justified or acceptable. Accepting any outside influence or opinion to justify your personal actions is a sign that your integrity has been breached. Beware, this pressure may come from your boss, shareholders, the competition, stock market analysts, a board of directors or your spouse.

At Enron, the words "Respect. Integrity. Communication. Excellence." were found in many places, the least of which was the company’s stock certificate. Despite its well thought purpose, the integrity of the Enron system that included "Respect. Integrity. Communication. Excellence." was breached.

Former CEO of Enron and convicted felon, Kenneth Lay, died suddenly of a heart attack in Aspen, Colorado.

Lay was scheduled to spend the rest of his life in prison and has become a name synonymous with corporate abuse and fraud. His death brought to a close the legal drama that was initiated after the collapse of the energy giant Enron.  Lay takes credit for Enron’s rise as one of the largest corporations in the United States. A court also gave him credit for its collapse and the loss billions of dollars in employee pensions. Thousands of employees and shareholders suffered financially from the demise of Enron. Many find death is not enough punishment for Lay.

First his character failed him and then his health. 

Pholospher Soren Kierkegaard once said,

“The tyrant dies and his rule is over, the martyr dies and his rule begins.”

Read the entire story at the Washington Post and a commentary of many views at FunnyBusiness.

Is Yahoo Chairman and CEO Terry Semel screaming Yahoo?

Yahoo Inc. (YHOO) announced yesterday that its board of directors has reduced Semel's annual salary from $600,000 to $1. Yes, rub your eyes and do a double take - it says $1, one, uno, one hundred pennies. Semel trades his cash for an increase in his overall future compensation through grants of stock options.

This isn’t some publicity stunt (well maybe). Yahoo’s long-term executive retention plan has Semel sticking to this plan of $1 per year for the next three years through 2008. Before the tears start, let me add that Semel received an option to purchase 6 million shares of Yahoo.  So an increase in Yahoo's share price of a few dollars and the Yahoo executive will be back flying first class.

In 2004, Google Inc. (GOOG), Yahoo's biggest rival instituted this same deal in 2004 for its co-founders Larry Page and Sergey Brin and CEO Eric Schmidt (all billionaires).

Post Enron, maybe we will see more Boards actually provide leadership, hold executives accountable and align their compensation with that of other stakeholders.

Read more at the Washington Post and the Truth on the Market.

Leading a company that has a market value of $60 billion and nearly 6,000 employees must tempt a leader to imagine that he is invincible, beyond reproach and due some spoils for such genius and hard work. In the case of Enron, this attitude was brought on by the power, money, and prestige of such success and proved to be the poison that took $60 billion to zero, left the employees without a job or pension and now finds Lay and Skilling headed for an extended stay at the big house. Enron, Lay and Skilling have come to represent corporate greed, wrong-doing and deceit.

The aggressiveness, commanding presence and intellect that carried them to the executive suite contributed to their conviction. Viewed under a different light, many leadership and character traits did not impress a jury of middle-class citizens. Such smart capable men, suffered from a lack of credibility. The Washington Post reports,

“Jurors in the Enron trial made it clear that it would have been better for former executives Kenneth L. Lay and Jeffrey K. Skilling if they'd kept their mouths shut and stayed off the witness stand. Speaking shortly after a federal judge read their verdict, jurors said Lay's indignant outbursts while testifying in his own behalf made him seem "that he very much wanted to be in control -- he commanded the courtroom," said Wendy Vaughan, a Houston business owner."He was very focused, but he had a bit of a chip on his shoulder that made me question his character," she said.

As for Skilling, who spent days explaining the tedious financial inner workings of the once high-flying energy company, the jurors couldn't understand how he could know so much about that and not be aware of illegal business maneuvering, whether or not he was responsible for it personally.”

Character and integrity. They matter. Despite genius, hard work and an ability to attract followers, a leader cannot ultimately succeed with out them. The following found its way into the trial often. It sums up the case and the man.

                                                          - Kenneth Lay

The Moderate Voice provides some excellent commentary. Read more at the New York Times.