Recently we interviewed Lance Secretan, Former Fortune 100 CEO and author of The Bellwether Effect, for Exploring Forward-Thinking Workplaces. We continued on to talk more about his latest book in greater depth below.
Bill Fox: You’ve just written a book called The Bellwether Effect. What is a Bellwether and why did you choose that title?
Lance Secretan: The Bellwether is a 13th century word, which describes a ram that has a bell tied around its neck. When the flock gets lost, the Shepard can find the flock because the ram leads the flock, and he can hear the bell. Typically, in the highlands where the sheep roam, it gets very misty and foggy at night. You can’t find your way anywhere, so you’re looking for the bell.
There are companies that essentially are the same. In the earlier era, the 70s and so on, we had companies like IBM, Proctor and Gamble, Honeywell and General Electric. These were Bellwether’s because what they did was set the tone. You’d keep reading about them in Harvard Business Review, Stanford Journal and elsewhere. People would talk about them. You’d see articles in Fortune, so they were always pioneering and coming up with new business processes. The trouble was it quite often worked for them, or at least they tinkered with it, even if it didn’t work. But then a lot of other people would copy them. That’s the Bellwether Effect.
They often copied them without understanding what they were doing. A good example of that is GE which started something called stack ranking, which basically means you rank all your employees then you fire the bottom 10% on performance. Very ruthless, very crude, and extremely violent emotionally for people. But what happened is other companies copied it. At one point 80% of big companies had a stack ranking system. It added greatly to the pain of employee experience. It’s just one of the many processes that we do in business where companies in an unthinking way copy Bellwether companies. As a consequence, they get themselves into trouble.
Bill: What question is at the heart of your book?
Lance: I think the question at the heart of the book is, why are we doing things without thinking about it? Why do we thoughtlessly implement stuff like employee surveys of various kinds like engagement surveys and performance reviews?
Performance reviews are one of the most maligned, reviled, and hated processes in business, yet 80% of businesses do it. Nobody loves doing a performance review. Nobody loves having them done to them either. Yet we continue to do them. That’s the Bellwether Effect, and it leads to what I call dissonance, which is the gap between what leaders think is happening and what employees say is happening. The gap between the thought and the experience.
I like to say to clients I work with, “Would you do this with your spouse?” Let’s take a performance appraisal. Would you say to your honey, “Hi honey, we’re going to sit down and have a little conversation. We’re going to discuss your key performance indicators and your budget. We’ll do some 360 surveys to see how your colleagues think about you.”
You wouldn’t get three words out of your mouth before you’d be backing out the door. Well, if you wouldn’t do it with your spouse, why would you do it at work? It’s just as uncomfortable, diminishing, demeaning and demoralizing at home as it is at work. There’s a good example of the Bellwether Effect, which we copy mindlessly and it’s doing terrible damage.
I did a piece of research into the characteristics people most admire in great leaders. There were things like visionary, builds great teams, motivates, strategic thinker, and so on. I did a survey of what do people think of when they think of a great relationship. Here you have words like intimacy, vulnerability, passion, truth, trust, love, caring, and humility.
So, we have these two different lists of words where we expect to get up in the morning and say, “Goodbye honey, I’m going to go to work now. I’m going to be visionary, motivational, a great team builder, and a strategic thinker.” Then at the end of the day, you say, “Hi honey, I’m back. I’m going to be intimate, compassionate, passionate, caring, loving.” Why would we do this? This is ridiculous. We are one whole human being, and we need to be those things we admire in relationships — everywhere. Because those are the things that build great relationships whether it’s at home or anywhere else.
We love people who are truthful, compassionate, caring, and loving. Those are the people we are drawn to. Those are the people who inspire us. The whole idea of the warrior at work, the great leader who is a General Patton type of cut out, this is simply obsolete. It doesn’t fit with what people want.
Bill: What are the key takeaways you’d like readers to get from your book?
Lance: The first one is to make sure that we understand the difference between motivation and inspiration. There’s a clear difference between those. We have become very good at motivating, which is a fear-based system. We essentially use bribery all the time in every place you can think of whether it’s in marketing (buy this product or you’ll be ugly), in religion (join my religion or you’ll go to hell), in healthcare (follow this protocol or you’ll die), in education (pass this exam or I’ll fail you), in business (do what I say or I’ll fire you), or in parenting (do what I say or I’ll punish you). I mean there’s no end to this you see.
This is the system we’ve learned. This is the system we now practice. That’s fear based motivation. The idea is to exploit the behavior of others to manipulate it, control it, and force outcomes from those people, which benefit me.
Inspiration is exactly the opposite of that. It is not about me, it’s about you. It’s not about exploiting your behavior, it’s about helping you to become fulfilled, rich and successful. Rich in a sense, not of money, but of richness in your life. The whole idea is that we need to become as good at inspiring people as we have become at motivating them.
We need to motivate. There are times and places where that needs to happen. But it’s the only thing we know. We have no idea how to inspire people. The way I summarize this is motivation is lighting a fire under someone, and inspiration is lighting a fire within someone. There’s a big difference. We need to know when to be inspiring and when to be motivational.
The big takeaway from this book would be, can you be inspiring? Do you know how to inspire? Do you know how to inspire all the time even when you’re having a bad day — even when you don’t feel inspiring. That’s the great test. When we get cut off in traffic, we have a choice. We can flip the bird, or we can smile. Everywhere in our lives, we have these choices and the choice should always be to be inspiring.
Bill: What is the purpose of leadership?
Lance: Well, it’s a great question. I think we’ve come to think about leadership as heroic and in a context of the military or corporate life. Sometimes we see it in politics but not always.
We look back fondly at Reagan or Roosevelt, for example, as great leaders in the US, but they are few and far between. You wouldn’t take the Bush’s particularly nor Trump. Possibly Obama might be there, and today Jimmy Carter is being rehabilitated as a great leader. A little late, but that’s how it goes.
Here we are where we only think about leaders that way whereas a mother is a leader. A student at school is a leader. The kids on the playground are leaders. We’re leaders in all kinds of aspects of our lives. Indeed, sports celebrities and entertainers, they’re leaders too. We need to reframe how we see this because I think leadership is about influencing outcomes in many ways. It’s about serving people. It’s about building relationships. All leadership is a relationship. It either works or it doesn’t. If it doesn’t work, you’re an ineffective leader. If people will follow you anywhere because they have a great relationship with you, then you’re an effective leader.
Bill: What’s wrong with the current state of leadership and how do we fix it?
Lance: Yes, we’ve got a lot of things wrong with it. One of the things that’s increasingly become obvious to all of us is that the compensation system for leaders is out of whack. We should be sharing a little more evenly across all people that achieve results — not just the leader. When leaders get paid $50 and $100 million a year, it’s just not sensible it seems to me. I think that needs to change. And I think we need to be more democratic. I don’t mean socialist. I mean democratic in the sense of fairness and sharing the spoils of what gets accomplished. It isn’t just the leader who does all these things. Very often it’s the employees who make the leader successful and great — or appear great. So, that would be one of the things we need to change about leadership.
I think we also probably need to slow down a little. Leaders spend a lot of time these days working on the inconsequential — about a third of their time or more for a lot of them is drained by email. If you think about a leader in front of a computer doing emails all day that’s a foolish waste of time. The things a leader should be doing are external. A leader effectively should be out representing the organization in the world, in the marketplace and elsewhere but also internally, in listening and talking and hearing.
I’ve done a lot of objecting to employee engagement surveys because I think they’re pretty useless. I don’t think that’s listening. I think if you want to hear; you sit down with an employee say, tell me, what’s going on? In a supermarket, instead of doing broad market research surveys about baked beans for example, the CEO of the baked bean company should go into the supermarket and ask the person who just picked the competitive brand, why did you do that? That’s research. That’s how leaders could become more effective.
Bill: In your book, you say, “If I were CEO of a major enterprise again, one of the changes I would make would be to replace the word “leader” with “coach,” or even “partner.” Why is that?
Lance: We’ve got this misunderstanding about what leadership entails. Many people think it means creating a strategic plan and then telling other people how to get there. Leadership is actually about coaching the best out of everybody that’s on your team. What’s remarkable, and I certainly found this when I’ve been building a Fortune 100 company when I was running Manpower Ltd., is the idea of having great people. When I say great, I mean people with potential. People who are smart, intelligent, hungry, ambitious, creative, innovative, compassionate, and caring — all those things. Then we need to facilitate the development of those people. Help them with their growth. Help them to achieve and to dream because they can do that.
Years ago, when I was at Manpower, I bumped into a guy who was a helicopter pilot in the North Sea in Scotland. I loved him. He was just fantastic. He had a great attitude. Very smart. Lovely man to be with. I offered him a job. I said, “We’ll hire you.” I went back to London where my offices were, and I met with my team and said, “I just hired this guy.” They said, “What’s he going to do?” I said, “Oh, that’s a good question. I didn’t ask him that! I need to talk to him.”
I went back to him and said, “You know there’s a little detail. We didn’t talk about what you’re going to do. Let’s talk about that a little bit. What would you like to do?” Note that I was asking him what he thought, not I think you should be doing this. I asked what he thought he should do. He said, “You know. I fly missions out to the North Sea oil rigs. It’s a cowboy business. It’s unregulated. There’s no insurance. There’s no union — nothing. It’s a mess. It’s just people and they’re crashing, burning and dying regularly. People have accidents. It’s just awful. What I think we should do is organize all these guys. Pull them into one organization and provide a master organization that supplies services to all the oil rigs in the North Sea.” Now, that was a long way from anything we did. We didn’t do anything like that at all. I said, “Ok, let’s do it.” We became the largest North Sea oil rig company in Scotland.
What’s a leader supposed to do? The leader’s supposed to find out what the potential is of employees and help them reach their dreams. They know what to do. I don’t need to come up with a strategy.
Bill: You stress the importance of having a dream. Why is it so important and how do we increase our capacity to dream?
Lance: One of the things that is slowing us down is something we have been given by the Bellwether companies, which is a mission, vision and values. Every company on the planet has mission, vision and values statements. Now think about this objectively. Does anybody get up in the morning and say, “Oh, I’ve got to read our values and our mission statement and our vision statement, just so I know which way I’m pointing today.” Nobody does that.
In fact, when I do research in companies, I ask them, what is your mission? Most people don’t know what their mission is — even though they have one. I like to play a little game where I pretend to be an orchestra leader. I say, “Tap, tap, tap.” Ok, here we are. We’re starting our concert. What music are we playing? If you don’t know what music you’re playing, how can you make music? This is how it is in companies. If they don’t know what their mission statement is, how can they make anything happen? How can they get to their destination or their objective or their aspiration if they don’t even know what their mission is?
This is a complete waste of time. I think we’ve just fallen in love with a system which is a Bellwether idea and the Bellwether Effect is that now everybody else has these. The dissonance is people roll their eyes when they hear the mission statement. I always share that if I collected everybody’s mission statement and threw them in a pile on the ground, they wouldn’t know if they got their own back or not anyway because they all say the same thing. Basically, change “chocolate factory” for “cheese factory” and you got your mission statement.
What I’m suggesting and noticing in great organizations is that they have a dream. Disney had a dream. Patagonia has a dream. Starbucks had a dream. Southwest Airlines had a dream. These are all companies built on dreams. Microsoft, Facebook, Google. All built on dreams. The founders had a dream about what they wanted to accomplish. The dream is a powerful idea.
We’ve created dreams for organizations. We have a client for example in the United States called Humana. The 53rd largest company in America. When I started working with them, we put a dream together. Their stock was $15, and they had sales of about $15 billion. A big company but not enormous. Today, eight years later, the stock is over $300, and their revenues are over $60 billion. They will tell you, it’s the dream. As the chief of human resources said to me once, “We had no rudder, and the dream became our rudder.” How important that was for Humana when Obama was trying to disrupt the health care business. They needed a dream to keep them focused, centered, and pointing in one direction through that dangerous and difficult time they went through. It’s been an enormous success. I can tell you lots of stories like that, and Starbucks is another example. Starbucks has a dream to create the third place. If you ask a barista in any Starbucks store what’s the dream, they will say it’s to create the third place. That’s why they get up in the morning.
It isn’t just about changing the name from mission to dream either, but it’s thinking about things at a much higher level. The question it’s trying to answer is, how will this make the world a better place? That’s our dream. Create a third place is about making the world better. Today Starbucks is a third place for a lot of people. That’s where people write resumes, they do job interviews, they finish their college essays, they have their first date. They do all kinds of things there. It’s a meeting place — a community place. That’s what they’re all about there.
In my case, my dream is on my business card. When I hand it to somebody, they know what I’m about. It says, “Changing the world by creating inspiring organizations”. I wanted to make the world more inspiring and different from today. One of the most potent ways is through corporations because I think business is the strongest of all the levers that we have to pull. It has the biggest clout. The greatest intellectual power. It has the most money, influence, and reach.
If we want to change the world, we could maybe do it with six to ten corporations. If I added Walmart, Facebook, and Manpower, these are people that touch half the population of the world every day. Changing those companies would change the world. That’s more power than the Roman Catholic Church or the US Government. That power is much larger than any other option we’ve got available, so that’s why I choose business as a most powerful lever to achieve the change we’re all looking for.
Bill: Do you have any final closing thoughts?
Lance: What I’m keen to see happen is a movement. The Bellwether Effect is a handle on Twitter so anybody who’s interested in joining the movement should search for it on Twitter. I think it’s time for a movement in much the same way as we have a #MeToo movement. It’s time for people to say, things are not right in corporate America. We need to change this. And we can change it. It’s not like we need a revolution. It’s not like we have to throw out all the leaders or anything else that’s radical or violent. We don’t need to do that.
I was sitting in a meeting with a bunch of leaders some years ago. All were presidents in a large company with their own divisions and operations. There were 32 of them, and I’m lecturing them about something. One guy stands up and says, “Lance, I think you are full of it. I think this is all baloney. It’s fluffy. I think you must be from California. This is never going to work in here. You’ve got a cuckoo idea how this should all go down, and I think it will never happen in our organization.”
He sits down, and I feel like a chump. This is my first major meeting with this company, so I know this is either going to be the end or we’re going to make a breakthrough. It’s one or the other. This is a moment of truth. I think rapidly through my brain not wanting to say anything that will get me into trouble. His name is Tom. I said, “Tom, I think I heard what you mean to say but could you say it again in a way that inspires me?” There was total silence in the room. You could hear a pin drop. Tom said, “Yeah, I could do that.”
He started all over saying the same thing. Not quite the same but the way he felt in a way that was making me feel larger, not smaller. That’s what I want to see happen in organizations. I want that kind of conversation to happen where we’re saying, “I hear you.” But say it in a way that’s inspiring.
It’s amazing how uninspiring we are today. If you call any 1-800 customer service phone number, the service is terrible. Why is it in the wireless companies if you say well I’m just going to cancel my service they’ll say, “Let me put you onto the loyalty department.” Really? You mean there’s a different department that deals with people who are nasty to me because they try to repair it and recover it? Why didn’t you get it right the first time? Why do you even need a loyalty department? This is a terrible indictment of how we’re doing things.
What I want to see is a change to that. I think we want to do things much better than this. I want to see people getting up in the morning and being happy going to work. Not, oh God, I’ve got to go to work! Help me join the movement!
Editor’s Note: If you missed part one of our interview with Lance, you can read it here at How to Stop Following the Herd and Breakout of the Mundane.