Executive education and leadership development are all about providing the business leaders of today and tomorrow with the right skills for the job. In your opinion, what are the most important skills for executives to have in 2018? How has this changed since the beginning of your career?
I’ve always said that success in business, or anything for that matter, is 80 percent psychology and 20 percent mechanics, or skills. Also, from my direct experience working with thousands of business owners, from first-time entrepreneurs to Fortune 500 CEOs, I know that the chokehold on any business is the psychology and skills of the leader. Because there’s so much available today, a lot of executives solely focus on skills, but that’s worthless if you don’t have the psychology of an extraordinary leader, meaning the hunger, the ability to rip open limitations, and the capacity to learn from your team as well as effectively lead and influence your teams. You could have the best skills on Earth, but if you’re missing the psychological component, you won’t execute at the highest level.
One of the biggest myths in business is that knowledge is power. Knowledge is not power. Knowledge is potential power. Execution trumps knowledge every day of the week. Once you have a strong psychology, there are certain mechanics that you must master in order to maximize your impact and profitability.
One of the most important skills that I think is often overlooked or undervalued is financial literacy and the ability to convert numbers into business intelligence. I’ll speak for myself. I can remember in the early days of my first company, when I asked how we were doing, my accountant said to me, “Oh man, you’re doing so well. You’re really profitable.” To my frustration and confusion, when we got to the end of the year, there was no money to pay the bills and I said, “What the heck is going on, you told me we were profitable.” He said, “You are, you just don’t have any cash.” Remember, profit is a theory. What matters most is cash, and especially free cash flow. There are so many businesses that go under because they don’t have someone who really looks out for their numbers. One of the most important hires I make in all of my companies is finding an outstanding CFO. I find someone who can convert the numbers into financial intelligence so that we can make effective decisions.
The second is marketing. As many executives know, the same tactics that worked 15, even five years ago don’t work now. How do you effectively market? Fifteen years ago, it took four exposures before someone took action or purchased a product; today that number is 16. That’s four times the number of exposures to your messaging just to be able to have the same effect. Mass advertising is just not effective. You’ve got to target your ideal client.
You need to know who they are and what their goals are. What are their strongest desires? What are their deepest fears? You need to know more about your ideal client than any of your competitors. Then you must align your marketing strategy in a way that meets them where they live. I’ve always said that life is the dance between what you desire most and what you fear most. The more you can reduce your clients’ fears and fan their desires, the greater quality of life they’ll have, and the greater the relationship you’ll share with them.
There are so many students today who aspire to lead organizations in the future. How much of leadership is natural ability, and how much can be developed? How can organizations spot those with the potential to lead?
A common misconception of leadership is that it’s something you’re born with, that the greatest leaders the world has seen were born with some innate magical quality that allows them to lead better than others. But leadership isn’t a position, it’s a skill and a tool you can continually cultivate and use to create lasting change and provide certainty to others in times of uncertainty. And it’s founded on the idea of influence with integrity. In other words, influencing to meet the needs of those you’re here to serve will ultimately meet your needs. It’s very much like a fiduciary in the finance, legal, or medical fields.
Ultimately, a leader is a master of their own psychology. Because the first person you need to influence is you. Leaders master the art of influence within themselves and with others so that they can act as a force for good and serve something that’s larger than themselves. They create permanent and lasting change around them.
Extraordinary leaders all have one thing in common, which is that they never settle. They know we all get what we tolerate. And, the best leaders are constantly upping their game within themselves, which is what makes others feel passionate about working with them and performing with them at the highest level.
In order to cultivate leadership within an organization, the executive or leader must create a compelling vision. Transforming the goals of the company into clear visions that inspire and pull people forward will naturally bring out leaders. I always like to use the example of JFK during the race to the moon. He created a vision for the nation, and effectively communicated it. In his case, he used storytelling in order to inspire the nation to accomplish the impossible.
The needs of businesses continue to change, and the education students receive changes along with them. Are there any new challenges on the horizon that schools can prepare students for? How do you prepare to overcome unexpected obstacles in business?
We all know that the world is changing at a more rapid pace than ever before, especially in the area of technology. Less than 200 years ago (1840), 70 percent of the American workforce were farmers. Now it’s down to two percent, which means over 6 million farm workers are at risk of being obsolete due to robotic farming equipment. And it’s not just blue-collar jobs, white-collar jobs are at risk too. According to a study from Oxford, 47 percent of jobs are going to be gone in 10 years.
So the key is to anticipate. The more flexible you are, the more you educate yourself on technology, what’s coming up, how it’s going to change the current landscape, the better position you’ll be in.
Think of it this way. All leaders need to train themselves to constantly be managing two businesses: the business we’re in and the business we’re becoming. If you only stay focused on the business you’re currently in, you cannot anticipate the changes that are coming, and the competition will knock you out. If you only focus on the future and take your eye off of the ball in the business you’re in now, you’re going to have a cash-flow challenge. These two businesses have to be managed constantly in tandem for you to dominate your industry.
Continuing education for employees is critical for sustained success in business, yet it comes at a cost. Why is it so important for businesses to invest in their employees’ growth? How can they maximize the ROI and develop quality leaders? What advice can you offer to aspiring executives looking to navigate the corporate ladder?
Fulfillment in anything, whether it’s in your job, your relationship, or your health, really boils down to one word: progress. If you’re not growing, you’re dying. Investing in your employees’ growth is essential. Otherwise, they’ll become disengaged and less effective, or they’ll go somewhere else.
Developing quality leaders starts at the top. If the leader isn’t constantly growing, learning, testing things, and committed to constant and never-ending improvement, it’s not likely that their employees will be either. Leaders go first. All the greatest entrepreneurs I know live by the philosophy of CANI, which stands for Constant and Never-Ending Improvement. Whether it be Marc Benioff, the CEO of Salesforce.com, Peter Guber, the Co-owner of the Golden State Warriors and the LA Dodgers, or Ray Dalio, the most successful hedge fund investor in the history of the world, they exhibit CANI in everything they do. Leadership is marked by a passion for learning, constant growth, and a focus on doing more for others than anyone else can possibly imagine.
In fact, if you aspire to be an executive or leader of any sort, the three words of success are simple: add more value. Do more for others than anyone else is doing in your company, or your industry, or in the world, and the path to success will unfold naturally and continuously. You want to develop the psychology and skills that make you indispensable to your organization, and, most importantly, to your clients and partners. I work with tens of thousands of entrepreneurs each year through my Business Mastery program. It’s like a business boot camp where we’re obsessed with helping any organization, whether they’re just getting started, or they’re a multibillion-dollar enterprise, to grow their business 30-130% over the next 12 months. We focus on arming them with the best skills, tools, and psychology to lead effectively, and to thrive in the environment of constant change.
You’ve crossed paths with a number of high-profile entrepreneurs and business owners over the years, all with their own style. In your experience, what’s the most effective style of leadership?
The greatest leaders in history are purpose-driven, they serve something more than themselves. And motive does matter. If your motive as a leader is to simply get someone to do something for you, you may be able to strategize a way to do it, but it’s not going to last or motivate someone long-term. Align those you are leading with a vision, and a mission that serves a greater good, and you will create leaders whose organizations will have lasting impact.
This also creates fulfillment at the deepest level on your team. Today, most people spend more time at work than they do with their family. I truly believe that the most sacred gift that you can give, besides your love, is your labor. If you can align your team around a mission, they won’t just be doing it for the money, they’ll do it because it’s what they’re made for. For them, it’s not work at all if it serves a higher purpose.
Staff, us.editorial@mediaplanet.com