1.) Adding People is Easy; Subtracting is Hard – Here is how most people operate: If the boss wants change, you claim you need more people to make the change.  Why? You indicate that everything you are doing is vital and cannot be changed. To incorporate what the boss wants while keeping the trains running, so to speak, extra people are needed to do it.  If times are relatively good, usually the boss gives in, and your organization grows in both size and complexity as you just add the new capability instead of really changing.

2.) Most Managers Believe the Bigger Their Organization, the More Important It Is – Most people won’t admit it but that is the way they think.  The more complex and large things are, the more talented you obviously are!  Your pride becomes associated with the organization and the harder it is for you to accept change.  Any change that is forced on you causes you to defend what you currently do and eventually you win the argument that in order to incorporate what the boss wants, you need more people.

Here is my career advice which is completely counter to a lot of the basic human traits that you see captured in the two reasons cited above:

People who constantly cut and streamline their organizations and are always anxious to take on new things are your most valuable employees.

Outstanding Leaders constantly exhibit these traits and such behavior requires self-confidence, curiosity, and a whole lot of guts!

All aspects of Samsung Electronics are run with the same “perpetual crisis” mentality, and it really shows. The hugely successful Samsung Galaxy S 3 has been quickly updated with the S 4.  When Apple introduced the iPhone 5, Samsung had very strong competitive advertising on the air within 7 days.  The ads were highly memorable.  They featured Apple fans in line for the iPhone 5, asking each other when Apple might be getting the features that a couple of “with-it” guys with Samsung S-3’s were showing them as they stood in line.

All of this momentum is being driven by one man; Chairman Lee Kun Hee.  He is absolutely obsessed with the need for constant change and innovation.  For example, about 50,000 Samsung employees receive training each year at Samsung’s Creativity Institute 45 minutes south of Seoul, Korea.

The Creativity Institute is a massive complex with a traditional Korean roof in a park-like setting and has a special area that houses the Franklin Room, which Samsung employees say is as sacred to Samsung as the Clementine Chapel is to the Vatican.  The Franklin Room is an exact replica of the drab conference room in a German hotel where in 1993 Chairman Lee gathered all of Samsung’s executives on short notice to lecture them for 3 days on the disappointments he experienced as he toured the world to get an assessment of Samsung’s struggling international business.  The most famous quote from the chairman that came out of his lengthy session was “Change everything but your wife and children,” which is well known and repeated often today within Samsung.

The two principles that Chairman Lee drives into every area of Samsung Electronics are valuable lessons for leaders today:

1.) In Every Area of Endeavor, Push Relentlessly to Be Superior – For example, once Samsung got into making screens for smartphones, it didn’t take long before they emerged with the Super- AMOLED screen  (for the non-nerds, AMOLED stands for active-matrix organic light-emitting diodes!)  that has exceptionally low power consumption and cost.

2.) Once Superior, You are in Immediate Danger and Must Significantly Improve – Mr. Lee stresses that it is guaranteed that you competitors are working to knock you off, so you better beat them to it.

Clearly Lee Kun Hee has done amazing things via the creation of a culture totally focused on change and innovation.

“There is only one boss: the customer.  And he can fire everybody from the chairman on down, simply by spending his money somewhere else.”

In a recent Businessweek article about Walmart titled “What Good are Low Prices If the Shelves are Empty,” it describes all the complaints emerging because customers are finding Wal-Mart out of stock on many of the kinds of products that people buy regularly.  The article cites the core problem as being the fact that “Walmart has been cutting staff since the recession and pallets of merchandise are piling up in its stockrooms as shelves go unfilled” due to inadequate staffing.

It is a fact that in the U.S., Walmart has added 455 stores over the past five years but during that period its total workforce has decreased by 1.4%.  In 2008 there were averagely 343 employees per store and in 2013 that number is down to 301.  Last month, Walmart placed last among department and discount stores in the American Customer Satisfaction Index.

What seems to have taken over at Walmart as the number one priority is financial performance.  Specifically, via tight cost management, 2012 earnings per share increased 11.2%, while revenue increased 5%.  The strong profit performance drove the stock price from $62 per share a year ago to $79 today, a 27% increase.  There is no doubt you can improve profitability, for a while, by cutting cost and ignoring the resulting impact on your business, but that is flawed, short-term thinking.

The job of the leader is to keep the organization focused on the right things, and serving your customer should be right at the top of the list.  Here are the key points from this sad tale about Walmart:

1.) Nail Down Who is Your Customer – You may have a job where those customers are internal to you company, or they may be the people who are buying your products; whatever the case, make it clear to the folks you are leading.

2.)Develop Robust Customer Satisfaction Measures – Make these measures very visible to all the people in your organization and set goals and publish results versus those goals regularly to all of your people.

3.) Take Immediate Action If the Performance is Unsatisfactory – You may need to move some people out, or reorganize, or change certain processes.  Most importantly, show a sincere sense of urgency to consistently excel regarding customer satisfaction.

Another great Sam Walton quote he often used with his people was: “Our goal as a company is to have customer service that is not just the best, but legendary.”  No doubt; Sam would be in a rage today if he read this blog!

This incident reminds me of an old Vince Lombardi story. Back in 1960 this legendary coach of the Green Bay Packers stopped practice and exploded in an expletive-laced tirade directed at Bart Starr, the young Packer quarterback. Starr later went to Lombardi’s office to settle a few things.  He accepted responsibility for his mistakes but told Lombardi “You expect me to be the leader of this team.  I want to be the best leader I can be, but I can’t do that if you’re chewing me out in front of the team I am supposed to lead…Now I can take any chewing out you want to deliver, but all I ask is that you do it in the privacy of your office….I will be an even better leader for you if you do that.” It is said that Lombardi never criticized Starr in front of the team again, and Packers led by Starr became the most famous NFL dynasty ever.

Here are my views on this topic of public criticism:

1.) If You Are the Leader, You Take the Blame – My view is the CEO of IBM should have assume personal responsibility for the business softness and then gone back to the troops and properly analyzed the problems and fixed them.  Yes, the hardware group underperformed, so learn what is going on (which should have been done well before the crisis) and apply the necessary fixes.

2.) Privately Deal the Poor Performance of Leaders Reporting to You – Bart Starr was right; public admonishment causes the troops to view the person as somewhat damaged goods.  This leads others to believe that person is having problems and probably not capable of leading in the right direction.

3.) If Firing Someone, Allow the Person to Leave with Dignity -  Publically assigning the person to a specific special assignment reporting to you, while privately they look for a new job outside the company, is a good way to do this.  While people will speculate what is probably going, it enables the person to hold his or her head high while coping with the situation.

Obviously, I am a strong believer in the old adage: Praise Publically; Criticize Privately!

I asked this candidate to outline activities where she played a role that she believed really made a difference.  She indicated she was a member of the robotics club since her freshman year and that she really enjoyed the challenges of working with the team in putting robots together.

In her junior year she was elected president and she explained that each year the toughest task for the team had always been deciding what to build that year.  The selection was left to the team by the faculty coordinator.  As president she led the effort by having the team hear all the individual member’s proposals and debating them as a group.  She then proposed and got agreement to a modified version of one of the ideas.  After the selection was made, she organized who would work on what parts of the robot prior to final assembly.  Once complete, during the next several months, she made sure all the logistics were nailed down for getting the team to the various robotics tournaments around the state.

This example caused me to think back of my many years at Procter & Gamble and the three traits we always put at a very high priority in interviewing job candidates.

1.) Early Indicators – Look way back at prior jobs as well as what they did during their schooling that would indicate the sense of personal responsibility that is typically the cornerstone of leadership.

2.) Consistency Over Time – The real leaders exhibit leadership traits very early in life and exhibit those traits over and over again in various contexts.  Look for that consistency as you probe for examples of them playing a leadership role.

3.) Pride in the Team’s Accomplishment – Beware of the person who attempts to take the majority of the credit in regard to accomplishments they are describing to you.  You are looking for the person who really cares about the team winning.

Clearly the girl I interviewed is off to a great start in becoming one of those people you hope to run into when you are out there looking for strong leadership talent.

In the past six years since those record profits and stock price, it has been all downhill for Nokia, with their low end cell phones losing market share while having a very weak smartphone offering.   In early 2011, Nokia hired a new CEO and he focused 100% of his effort launching a competitive smartphone, while ignoring Nokia’s low end cell phone business.

As a result, in the first quarter of 2013, Nokia’s low end cell phone revenues were off -21%, and while their smart phone business was up 27%, it is quite small (less than a 5% market share). For perspective, in the quarter, Nokia sold 55.8 million low end cellphone units, but only 5.6 million smartphone units.  Net, Nokia took its eye off its big volume business while it focused on its new Lumia smartphone which is so late to market it is having minimal impact.  Its current stock price is in the $3 range, off that $39 high in 2007.

Net, Nokia seems incapable of doing two things at once; keeping the low end phone business growing while aggressively trying to catch up in smartphones.

What is the problem here?  Basically when a leader has two efforts that deserve major attention, they need to do the following:

1.) Organize for Success – If there are two major efforts, have two separate organizations with a strong leader for each. For example, if you are Nokia, you need to have a hard-charging low-end cell phone organization with a very strong leader and you need a separate organization and leader to successfully launch the Lumia.  In Nokia’s case, the CEO became the smartphone leader and he obviously gave inadequate attention to low end cell phones.

2.) Let the Market Determine the Winners – Each effort should take a “no-holds-barred” approach to winning in the marketplace, even if means cannibalizing some or all of each other.

These lessons apply just as well to middle and lower level managers.  Do a great job with your current responsibilities while aggressively launching your change initiatives independently.

He complained that every time a tough decision needed to be made, his boss would demand that all his direct reports, as well as his boss, participate and that he would not make a decision until compromises were made so all agreed.  The result was that decision-making was at a snail’s pace and nothing of real significance was getting done.  Everyone was simply protecting their turf and blocking anything that created significant change.

This individual’s core concern was that it appeared the whole company operated that way and he would have no chance to grow and suggest and achieve some significant results.  Hence, he decided to quit and moved up his MBA plans.

What is the right thing to do when you are in such an environment?  Here are my suggestions:

1.) Talk to Your Boss – Tell the person straight out what worries you.  Be as courteous as possible to not get the person immediately defensive, but I guarantee that you will learn a lot from the dialogue, and hopefully the boss will as well!

2.) Talk to Your Peers and to HR – Be constructive in these conversations, asking for advice and citing you interest in doing significant things and your concerns about your present situation.  You will hopefully gain some useful insights.

3.) If the Picture Continues to Look Bleak, Bolt! – You need to be realistic about your assessment of whether you can have an impact and grow/learn in your current environment. If after proper probing it looks negative, move on!

Having fun in business, and making career progress, is all about driving things that make a difference, and being part of an organization that strives to continually improve.  Don’t get bogged down with a bunch of wimps!

In contrast, while General Motors has been working over the past decade to simplify its offerings, killing the Oldsmobile and the Pontiac, it is still got a lot of work to do in this area and they are painfully slow, even after their bankruptcy of recent.  They currently offer the customer GMC, Chevrolet, Buick, Cadillac, plus Opel and Vauxhall in Europe.  Ford has been working hard to simplify, shedding Jaguar, Land Rover, Volvo, and are currently implementing their decision to kill Mercury.

Discontinuing a project, product, or service requires much more energy to achieve than most people realize.  The reason is that it is somewhat counter to human nature.  Here are the fundamental human tendencies you are fighting:

1.) Independence: People want to be on their own and be complexly independent and self-sufficient.

2.) Bias: People genuinely convince themselves that what they are doing is important and valuable to the organization, and can be extremely creative in finding ways to make that argument.

3.) Fear:  While they would never admit it, they worry about what they would do if the current activities they are involved with would be discontinued.

How can a manager deal with these tendencies?  Here are three tips that can help a lot:

1.) Rotate People Regularly:  The longer you are in a job, the more set in your ways you become and protective of the status quo.

2.) Avoid Consensus Management:  As a leader, you want the opinions of others on what to do, but after analyzing things, you need to make a decision.  If you put it out for a vote and wait for all to agree, change will rarely happen.

3.) Sense of Urgency:  Generally, the troops are in no hurry; the leader must provide the sense of urgency.  Otherwise, the human tendencies described above will sidetrack the notion of change.

Gutsy leaders get things done; keeping  the focus on the big ideas and killing off the marginal.

As the data flowed in, the marketing team and the ad agency were developing a response to blunt the iPhone 5’s introduction.  Two hours later, they were drafting the print, digital and TV ads.  One week later, as the iPhone 5 went on sale, Samsung began airing what became the most popular tech ad of 2012, attracting more than 70 million views online.  The ad mocked Apple “fanboys” queuing up for the new phone, showing these Apple followers saying things like “wow, the headphone jack is going to be on the bottom!”  In another of the ads, a Samsung fan is waiting in the line for the iPhone, and when asked, explains he is saving the place of his parents who went to get coffee.

The Samsung ads not only mocked the “fanboys” but also explained exciting features of the Samsung Galaxy SIII of “beaming” photos by pressing together the backs of two phones, causing a “fangirl” to ask when Apple was going to get that.

The results were amazing.  In the weeks following the iPhone 5 launch, Samsung sold a record-breaking number of Galaxy SIII’s.  The recent surge by Samsung has put it in the #1 position globally in smartphones and in a dead heat with Apple in the USA.  In fact, ABI Research put Samsung’s share of smartphones at 33%, with Apple at 30%.

What are the key leadership reminders we can take from this story:

1.) Speed and Urgency are Essential – Given the competitive world we live in, there is just no substitute for moving fast.  Timetables need to be set to reflect such urgency.

2.) Clear Goals Need to be Established – When moving fast, you better have the right target.  Any lack of clarity regarding that goal can lead to wasted effort and lost opportunity.

3.) A Highly Talented Small Team with Authority is Essential – Fewer people is better when you need to get something done, and they must have the authority to make decisions.  Hence, it is essential to staff with outstanding talent.

Samsung is really on a roll in the smartphone category and there is a lot related to leadership that they are doing very well.

When I asked to understand the details, the leader reviewed with me a large spreadsheet which summarized over 40 different initiatives, each with a leader named and a description of the opportunity, the idea being pursed, target savings, target completion dates, and current progress assessment.  I asked what the goal was for 2013, and was told it was a margin of 9.5%.  I then asked about the operating margins of the top two competitors.  After much back peddling and fidgeting, was told they were consistently in the 20-22% range.

There is a very famous quote by Peter Drucker that is relevant here:

“There is nothing so useless as doing efficiently that which should not be done at all.”

While this company is doing some good thing to beat down cost, the real issue is: what is it that competition is doing that is significantly different and having a huge positive impact versus what this company is doing? This was not being addressed and instead, the entire company is super busy doing a bunch of small things, each of which is admirable, but collectively causing the company to continue to have weak operating margins versus its competition.

So…what are the lessons here?

1.) What is the Big Idea – What is competition doing?  Find out why you are behind and fix the outage. Most importantly, what are the one or two big things we can do to get out in front of them?  You should be on top of these questions all the time.

2.) Organize to Achieve Success - Isolate those one or two big things, assign top talent full time to get them done, and give those leaders the authority to make decision and execute with speed and efficiency.  Very simply, get something of big significance done!

It is amazing how satisfied people can become when they are busy doing a bunch of things that if viewed objectively, are of small impact and are blocking the organization from realizing they are mediocre.