Leader ship values

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UNIT-1
CONCEPT AND SIGNIFICANCE OF VALUE BASED LEADERSHIP:
DEFINITION OF VALUE BASED LEADERSHIP:
Motivating employees by connecting organisational goals to employees’ personal values.
Values-based leaders communicate organisational values that tell members how to behave
in order to fulfil the organisation’s mission. They talk about these values in a way that
connects with employees’ personal values, so that employees come to identify strongly
with both the organisation and its mission. Such leaders focus on core values - the
enduring guiding principles that capture the organisation’s strengths and character.
1. Lead a life guided by purpose.
Only work for a company that you believe in, said McDonald. When looking for a job,
examine a company’s purpose, values and people to see if they align with your own
beliefs and ethics.
2. Everyone wants to succeed and success is contagious.
Treat your employees like they want to succeed, not like they want to fail. “Most of us
manage by exception: We wait until someone does something wrong to interact with him
or her,” McDonald said. “Spend enough time in your leadership role finding people
succeeding.”
3. Put people in the right jobs.
McDonald emphasized the importance of identifying your employees’ strengths, and then
placing them in roles that feed into those strengths. “At P&G, we have 130,000
employees around the world,” he said. “Imagine what would happen if we put them in
jobs that they weren’t good at.”
4. Character is the most important trait of a leader.
It’s important for leaders to have integrity and take responsibility for their mistakes.
“Choose the harder right, rather than the easier wrong,” McDonald said, citing a prayer

that he learned as a cadet at the United States Military Academy at West Point.
5. Diverse groups of people are more innovative than homogenous groups.
Diversity sparks ideas and innovation, so companies must employ a diverse group of
people. “We try to plan innovation, but there’s a little serendipity involved,” McDonald
said. “Diversity is what helps these nodes to connect.”
6. Ineffective strategies, systems and culture are bigger barriers to achievement than the
talents of people.
It’s important to blend a high-performance culture with robust systems and sound
strategies, McDonald said. Those ingredients, coupled with technical competencies and a
strong company mission, will create a high-performance organization.
7. There will be some people in the organization who will not make it on the journey.
Some employees won’t turn out to be a good fit for your company. As head of a company,
it’s your responsibility to find the right place for them. “Your job as a leader is to be
committed to them as people, not employees,” said McDonald.
8. Organizations must renew themselves.
Leaders should always think about what changes are needed to stay relevant in the
marketplace and fulfil the company purpose. “Organizations are like biological organisms
— they constantly need to change,” said McDonald.
9. Recruiting is a top priority.
“Somewhere here is someone who will be giving a presentation here years from now,”
said McDonald, pointing to the audience of Kellogg students. “And that excites me.”
10. The true test of a leader is the organization’s performance after the leader departs.
If you want to determine whether a leader has been successful, “look at their fingerprints
and footprints,” concluded McDonald.
He previously served as vice chairman of global operations for the company, where he led
sales, information technology, logistics, customer marketing and on-the-ground
operations in more than 80 countries. McDonald also previously managed P&G’s
business in developing markets, which accounted for 20 percent of company sales.

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SIGNIFICANCE OF VALUE BASED LEADERSHIP:
1. Self enhancement values:
 Achievement (persuit of personal success)
 Power(Dominance over others)
 Hedonism(personal Gratification)
2. Self-transcendent values:
 Benovalence(concern for immediate others: include honesty ,responsibility
and loyalty).
 Universalism(concern for the welfare of all people).
3. organisational values:
 Beliefs and ideas about what kinds of goals members of an organisation
should pursue and ideas about the appropriate kinds or standards of behaviour.
 Organisational members should use to achieve goals.
SHARED VISION:

Step 1: Create a Compelling Team Vision
1) Before you begin, everyone should understand the three elements of a compelling
vision and how they are interrelated.
2) As a team, discuss each of the three elements of a compelling vision. Agree on what is
essential and capture the key words that clearly convey the ideas that have been agreed
upon. Do not finalize the wording.
3) Decide how and when the vision statement will be written. Don’t get trapped into
wordsmithing during your meeting. It is easiest for a couple of people to use the notes to
write an initial draft after the meeting and then send it to the rest of the team for feedback.
Consider these guidelines when writing the vision statement:
Step 2: Honestly Describe the Current Reality
1) Examine your current realities in relation to your vision. Identify what’s working and
what’s not, your strengths and weaknesses.
2) Develop plans for collecting additional information to verify perceptions.

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3) Understand the importance of the creative tension so you can use it to your advantage.
Step 3: Identify Key Strategies and “Structural Integrity” that Support Moving
Forward
1) Identify the greatest opportunities to close the gap between your vision and your
current reality.
Look for high-leverage strategic goals – those that will allow you to leapfrog forward
toward your vision?
Include some quick wins – to help you see progress and stay motivated.
2) Create “structural integrity” by ensuring your systems and structures will not derail
you as you move forward.
Step 4: Plan for Involvement and Communication
For a vision to become reality, you must pay attention not only to what it says, but to how
it’s created, how it’s communicated and how it’s lived.
1) Develop a plan for ongoing communications within the team to coordinate efforts, to
provide feedback on your progress and to keep your vision alive. Also discuss how to
communicate the results of this meeting with other stakeholders.
2) If this work is being done by a leadership team that wants to bring the vision forward
to the rest of the organization, your work during this step is to create a plan for involving
others in shaping the vision, identifying the roadblocks and the strategies and goals to
close the gap.
3) As you move toward finalizing your vision, test it against these benchmarks to ensure it
is a
4) Have a discussion on the role of leadership. When a vision is understood and owned
by all, the role of leadership is to remove roadblocks and provide support – in other
words, to serve those who are working to achieve the vision.
Step 5: Make Personal Commitments

Never leave the room without putting yourself in the vision. As soon as you identify your
vision, if you believe in it, you must start to live it, behave consistently with it, and model
the values.
In this last step, each team member identifies specific goals and actions they will
personally take that demonstrate they are living the vision right now, even as they
continue to develop the vision and work out the details. When they share their goals, they
should also explain what they need from other team members for support. This is one of
the most powerful steps in the process.
VALUE –BASED CULTURE:
Definition of culture:
Culture is the characteristics and knowledge of a particular group of people,
encompassing language, religion, cuisine, social habits, music and arts.
A values-based culture holds that an organizations’ values are what support its’ vision,
shape its’ culture, and reflect what is important to the organization. In essence, they are
the organization’s identity – the core principles and beliefs.
The key to success is to establish the expected behaviours, and then design a system to
reinforce and support those behaviours. Expected behaviours will emerge from the
foundation of a company’s values—things such as transparency, integrity, and
collaboration. But studies indicate that not all employees will have a common
understanding of the values. Therefore, explaining these values and behaviours
through practical and tangible examples helps employees understand how to integrate
them into the daily performance of their roles. Managers are in the best position to
reinforce and support the expected behaviours.
Walking Values
Step 1: Enlist your managers. Design a culture initiative that empowers managers to act
as culture exemplars and ethics envoys to their teams. This will promote a stronger ethical
culture and breed greater trust amongst their teams. Research shows that a manager’s
consistency in word and deed sets the tone. When managers are not involved and do not
serve on the front line as culture envoys, it can breed a tone of cynicism and skepticism
among their employees.

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Creating a Shared Vision
Internalization of values-based principles does not happen overnight—it can take some
time. Create a campaign and kick it off with a visible launch with senior leaders and
middle managers present. The objective is to inspire middle management with a
compelling vision of how culture matters, and how leadership on the front line shapes
culture.
In practice at the local level, invite managers to embrace and cascade the values message
by sharing stories of when the company and its people really “walked the walk” on
mission and values.
Values-Based Leadership Training
Design a cascaded training plan to span the next three to five years, with leaders training
managers and onwards. Whether it’s a VP, director, or front-line supervisor, education
about values-based leadership and the expected behaviours should teach managers how to
model desired behaviour, encourage reflection (asking how and why questions) among
employees, and deal openly and frankly with ethics issues as they arise in the workplace.
Along with self-assessment and peer coaching, scenario-based discussions and role-play
exercises are effective means of promoting values-based leadership education.
Toolkits and Coaching Strategies
Managers at every level need the right tools to engage their teams on the company’s
values and expected behaviours. Managers should be encouraged to have regular
discussions with their teams to keep values on everyone’s minds. Managers will need
coaching on how to comfortably conduct values discussions with their teams. Research
suggests that discussion-based training that explores challenging, gray-area situations
may have the most impact. Many organizations are developing toolkits—electronic
versions of “meetings in a box”—that contain resources, case studies, facilitator guides,
and other learning aids to help bring values to life. Be prepared to refresh and revise the
case discussions to stay on top of the relevant issues and keep employees engaged.
Consider collecting real stories from employee participants to enrich the case discussion.
Measurement

Performance measurement systems need to be re-calibrated to measure managers ‘active
participation as culture envoys. Clear, actionable benchmarks are particularly helpful for
managers who may minimize the mandate to take an active role in strengthening the
organizational culture. Many organizations are developing toolkits that allow managers to
facilitate short 10- to 20-minute discussions around values-based decision-making on a
quarterly basis.
Recognition
In high-performing cultures, recognition and celebration can reinforce the spirit of the
company. Promoting greater alignment between the company’s core values and day-to-
day operations through real stories helps crystallize the message to employees worldwide.
Identify communication channels and forums to publically celebrate employees for their
acts of values-based leadership and values-based decision making.
RIGHT AND WRONG VALUES :
Right values of a leader:
Ethical leaders always know how to do the right thing. it may be difficult to define
exactly what “right” is, but a leader who is ethical is not afraid to do what they truly
believe to be right – even if it is unpopular, unprofitable, or inconvenient.
Here are 10 ethical leadership characteristics:
1. Justice
An ethical leader is always fair and just. They have no favorites, and treat everyone
equally. Under an ethical leader, no employee has any reason to fear biased treatment on
the basis of gender, ethnicity, nationality, or any other factor.
2. Respect others
One of the most important traits of ethical leadership is the respect that is given to
followers. An ethical leader shows respect all members of the team by listening to them
attentively, valuing their contributions, being compassionate, and being generous while
considering opposing viewpoints.
3. Honesty

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It goes without saying that anyone who is ethical will also be honest and loyal. Honesty is
particularly important to be an effective ethical leader, because followers trust honest and
dependable leaders. Ethical leaders convey facts transparently, no matter how unpopular
they may be.
4. Humane
Being humane is one of the most revealing traits of a leader who is ethical and moral.
Ethical leaders place importance in being kind, and act in a manner that is always
beneficial to the team.
5. Focus on teambuilding
Ethical leaders foster a sense of community and team spirit within the organization. When
an ethical leader strives to achieve goals, it is not just personal goals that they’re
concerned about. They make genuine efforts to achieve goals that benefit the entire
organization – not just themselves.
6. Value driven decision-making
In ethical leadership, all decisions are first checked to ensure that they are in accordance
with the overall organizational values. Only those decisions that meet this criterion are
implemented.
7. Encourages initiative
Under an ethical leader, employees thrive and flourish. Employees are rewarded for
coming up with innovative ideas, and are encouraged to do what it takes to improve the
way things are done. Employees are praised for taking the first step rather than waiting
for somebody else to do it for them.
8. Leadership by example
Ethical leadership is not just about talking the talk, this type of leader also walks the walk.
The high expectations that an ethical leader has of employees are also applicable on the
individual level. Leaders expect others to do the right thing by leading from example.
9. Values awareness

An ethical leader will regularly discuss the high values and expectations that they place
on themselves, other employees, and the organization. By regularly communicating and
discussing values, they ensure that there is consistent understanding across the
organization.
10. No tolerance for ethical violations
An ethical leader expects employees to do the right thing at all times, not just when it is
convenient for them. Don’t expect a leader of such high values to overlook or tolerate
ethical violations.
UNETHICAL VALUES OF A LEADER:
There are loads of articles floating around about attributes that make great leaders great,
but what makes a poor leader? We can all pick them out after the fact, but what traits set
these people a part even before they assume a leadership role?
I purpose that any one or more of the following traits would be a red flag that a person
might not be ready for a leadership position:
1. Lack of Empathy:
 The ability to understand and share the feelings of another.
 But the lack of empathy is a key indicator of a poor leader.
 If the person cannot seem to put him or herself in another persons shoes and see
things from a different perspective.
 They will never be a truly great leader.
2. Fear of change:
 Change is a scary for everyone, especially when it involves loads of money
and /or people’s jobs.
 But leaders who cannot embrace change are destined to be left behind.
3. Too willing to compromise:

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 The ability to find a win situation is a gift for a leader, but anyone who is too
quick to compromise his or her ideas or ideals is not going to be a benefit to the
team.
4. Too bossy(dominating):
 It’s a common misconception that bossy people make good bosses.
 Actually the opposite is true.
 Someone who simply orders others around is unlikely to engender any loyalty or
make subordinates feel empowered.
5. Wishy-washy
 Feeble or insipid in quality or character.
 Leaders must make decisions, and so if a person always seems to vacillate on
choices big and small.
6. Poor judge of character:
 A person who has a blind spot when it comes to friends and co workers, making
excuses or being unable to see another’s true character.
 Wont surround himself with the kinds of people who will help him rise to top.
7. Out of balance:
 Someone who is the first into the office every day and the last to leave might
seem like a great candidate for promotion.
 But ask yourself if they have any balance in their lives.
 A lack of balance can be a precursor to burnout, and can also signal that they may
have unreasonable expectations of the rest of the team.
TERMINALAND INSTRUMENTAL VALUES OF A LEADER:
Values are of two types, both in the personal and organizational domains.
The two types of values are:

INSTRUMENTAL VALUES and TERMINAL VALUES
TERMINAL VALUES:
Terminal values are the goals that we work towards and view as most desirable.
These values are desirable states of existence. They are the goals that we would like to
achieve during our lifetime. Instrumental values are the preferred methods of behaviour.
They can be thought of as a means to an end.
The values are
 A comfortable life (a prosperous life)
 An exciting life (a stimulated, active life)
 A sense of accomplishment (lasting contribution)
 A world at peace (free of war and conflict)
 A world of beauty (beauty of nature and the arts)
 Equality (brotherhood, equal opportunity for all)
 Family security (taking care of loved ones)
 Freedom (independence, free choice)
 Happiness (contentedness)
 Inner harmony (freedom from inner conflict)
 Mature love (sexual and spiritual intimacy)
 National security (protection from attack)
 Pleasure (an enjoyable, leisurely life)
 Salvation (saved, eternal life)
 Self-respect (self-esteem)
 Social recognition (respect, admiration)
 True friendship (close companionship)

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 Wisdom (a mature understanding of life).
INSTRUMENTAL VALUES:
According to Milton Rokeach, there are two types of values: instrumental and
terminal. Instrumental values are the means by which we achieve our end goals.
Terminal values are defined as our end goals. Examples of instrumental values include
being polite, obedient, and self-controlled.
The values are
 Ambitious (hard-working, aspiring)
 Capable (competent, effective)
 Cheerful (light-hearted, joyful)
 Clean (neat, tidy)
 Courageous (standing up for your beliefs)
 Forgiving (willing to pardon others)
 Honest (sincere, truthful)
 Helpful (working for the welfare of others)
 Imaginative (daring, creative)
 Independent (self-reliant, self-sufficient)
 Intellectual (intelligent, reflective)
 Logical (consistent, rational)
 Loving (affectionate, tender)
 Obedient (dutiful, respectful)
 Open-minded (accepting, broad-minded)
 Responsible (dependable, reliable)

 Self-Controlled (restrained, self-disciplined).
UNIT-2
THE FOUR PRINCIPLES OF A VALUE BASED LEADERSHIP:
i) SELF REFLECTION – UNDRSTANDING SELF REFLECTION:
1) Self reflection is the key to identify what you stand for, what your values, and
what matter most.
2) Through self-reflection you are able to step back, filtering out the noise and
distractions.
3) As your view becomes clearer, you can prioritize how and where to invest your
time and efforts and energy.
4) Self reflection allows to gain clarity on issues, both personal and professional,
because you have taken time to think more deeply about them.
5) If you are more self-respective you are the easier it is to make choices that are in
line with your values, with awareness of the full impact of your decisions.
6) Self-reflection has been my life long practice.
7) As you became more self-aware, it gains clarity about your values and golas.
8) And it was able to focus on what mattered most because you took the time to
discern my properties.

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9) Being self-reflective you take the time to think through your choices and
decisions.
10) Self-reflection makes you the better decisions in the future.
Understanding self-reflection:
1) There is no right or wrong way to key to engage in self-reflection. The key is to
find time when you can be silent and really focus on what matters most.
2) Some people are able to do this when they are jogging or walking. Others while
they are communicating by train or car.
3) For some, it is when they pray or mediate. You have to focus on inner voice, rather
than the outside noise.
There are 7 ways to understand self-reflection:
1) It allows you to notice negative patterns in our life.
2) It keeps you focused on the bigger picture.
3) It prevents you from worrying about things out of your control.
4) It helps you face your fears.
5) It allows you to clearly define happiness on your own terms.
6) It allows you to make decisions based on your conscience.
7) You will finally get different results.
ii) BALANCE AND PERSPECTIVE-DOING THE RIGHT THING RATHER
THAN BEING RIGHT:
1) Balance and perspective is the second of the four principles of value based
leadership.
2) And this was closely follows the first principle, self-reflection.
3) Through balance and perspective & self-reflection. You gain a clearer
perspective on virtually any topic or issue that you encounter.

4) Balance is the ability to see issues, problems & questions from all angles,
including from differing viewpoints.
5) In all aspects of your life, professionally & personally pursuing balance
will give you richer, more holistic perspective.
6) Sometimes you will change your mind, at other times, your opinions will
be affirmed.
7) Whatever the outcome, you will become more knowledgeable and gain
confidence in your decision making because you are balanced.
8) In pursuit of balance, you become stronger and more informed as you
genuinely seek input, options and feedback from all members of your team
before making a decision.
9) You value balance as part of the decision making process, knowing that
matter hoe senior you are in the organisation or how many years you have
been in the business.
10) By pursuing balance, you can also communicate your views much more
effectively. Instead of engaging in a tit-for-tat argument.
11) You can usually draw parallels where the various view point agree, and
explore contrasts where they do not.
DOING THE RIGHT THING RATHER THAN BEING RIGHT:
1) Most of us are very quick to express our views.
2) We have thought about an issue, and we know what the answer is or atleast we thik
we do.
3) Our focus is often to convince everyone else why we are correct.
4) There is a flaw in this thinking.
5) It is based on the assumption that their opinion is the “Right” one.
6) The same concept applies when you are the leader-whether of a team, a department
or an entire company.

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iii) TRUE SELF CONFIDENCE:
Most of us know that increasing our self esteem will help us live fuller lives and have
better relationships, but how exactly do you do this?
A lot of people present self esteem development as simply being a matter of doing nice
things for yourself. True self esteem comes from hard work and challenging yourself.
Persevering through difficulties, facing fears, overcoming challenges, making difficult
choices and changes. These are the things which truly develop self esteem. Here are 9
ways to do that.
Finding Meaning
I think a lot of efforts to develop self esteem involve focusing only on ourselves.
Good self care is important and I will examine this further below. But it isn’t everything.
Human beings are social creatures. We live in and are affected by the society which
surrounds us. I believe that disconnecting from this and isolating ourselves leaves us
empty and contributes to the depression which is so prolific in modern culture. To truly
feel good about ourselves we have to feel part of our community in some way. We need
to feel that we are making a contribution. The way in which one does this is unique to
every individual. But connecting to and participating in something bigger than yourself
contributes greatly to your own sense of self worth. Find a meaning. Find a cause. Find
something which is important to you and create it, build it, defend it.
Self Care
Developing good self care techniques is necessary not only for developing self esteem,
but for maintaining good mental and physical health. But good self care is not simply a
matter of being “nice” to yourself. Sometimes it requires making some tough choices; i.e.
changing your diet, starting an exercise regimen, etc. It is so important I’ve devoted an
entire article just to this topic: “Building Self Esteem through Self Care“.
Self Talk
Pay attention to how you talk to yourself. If you are delivering a constant stream of
name-calling, put downs, insults or negative language to yourself it’s almost impossible to
have a good sense of self esteem. Developing healthy and appropriate self talk is almost

as important as developing good self care. This too is a topic worthy of it’s own article:
“The Voices in Your Head: Tuning in to Your Self Talk“.
Choose Your Heroes Carefully
Don’t let the television determine who your mentors are. Think for yourself and make
your own choices. I think we are too passive about letting the media choose our idols or
heroes. Beyonce, Brad Pitt, Kobe Bryant and Paris Hilton may be famous and may have
millions of dollars, but are they really people we want to learn about life
from? Personally I don’t find that I have learned anything from them or find their stories
or words inspiring. I’m much more enlightened by the stories told by Aimee Mullins, a
double amputee who runs track. While training for a race she realized she was having
trouble with one of her prosthetics. She went to her coach, a tough old guy from
Brooklyn and asked to be excused from the race. She was afraid if she continued running
her leg might come off in the middle of the race. His response?
Choose Your Relationships Carefully
Choose your family
Yes, you can choose whether or not to have a relationship with family members. Just
because you are blood kin does not mean you have to allow yourself to be in unhealthy
relationships with them. If you have a family member who is demeaning or abusive
consider what keeps you in a relationship with them. You may need to make some tough
choices.
Choose your friends
You can also make choices about your friends. If you surround yourself with negative,
hypercritical friends this cannot help your self esteem. I’m not suggesting that you
surround yourself with people who won’t tell you the truth and give you nothing but
positive feedback – that’s false. I don’t consider that a friend. In my opinion a friend is
someone who will give you honest feedback when you ask for it, but do it with
compassion and kindness. They tell you the truth, but they don’t attack or belittle you.
They don’t bring you down, just keep you real. Look at who you spend the most time
with and how your interactions with them affect you. You might need to make some
changes.

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Choose your partners
If you are in a relationship that is unhealthy you may need to take some time to work on it
and make a clear decision to leave. You cannot lift your self esteem while being
disparaged on a daily basis. Many people stay in relationships which are unhealthy out of
a fear of being alone. It may be necessary to turn and face this fear before you can feel
better about yourself. Do you always pick partners who are needy? Dependent? Partners
with substance abuse problems? Abusive partners? See if there is a pattern to your
picking and find what is behind it. You may need to work with a counsellor to learn how
to make different choices.
Find Your Passion
If you haven’t found what excites you, explore. We spend an awful lot of our
lives working. If your work is not your passion, if it is only for the money, if it is only
because your family expects it of you - think again. Work that is depressing or
unfulfilling sucks an awful lot of energy out of your life. You spend all day at this.
Choose carefully. Change if you need to.
Stop Dressing for Success and Dress to Express
Express yourself. I don’t wear what other people think I should. I wear what is
comfortable. I wear what I feel good in. I wear things that express who I am as a
person. If you live in a situation where you are not free to express who you really are,
you may need to make some different choices. Living a lie, maintaining a facade
everyday also sucks a lot of energy and reinforces in your mind that you are not “O.K.”
Challenge Yourself
If there is something in your life which is plaguing you, grab it by the horns and change
it. I used to be horrible at managing my money. But I made some tough choices and
some tough changes. My money is now in much better control and it makes me feel
more mature and self confident. If there is some behaviour which bothers you,
i.e. procrastination, money management, being on time, being better organized, etc. tackle
it. Getting a handle on something which has been handling you will increase your self
esteem and make your life more manageable.
Face a Fear

I used to be terrified of guns. So I found an instructor who specialized in teaching women
how to shoot. I now have a very healthy respect for the damage a gun can do, but I do not
fear one, because I know how they work . This may work in the short term, but it doesn’t
develop self esteem. Self esteem comes from overcoming something, from fighting your
way through to the other side and knowing you beat it. Be sensible about the fear you
choose to overcome and be reasonable in how you choose to overcome it, but try it and
see if you don’t stand a little taller.
Building self confidence and competence:
Building confidence requires real conversation, not surface accolades. It starts by
understanding what’s really going on. It requires getting into the muck and working a
few levels below the obvious insecurity to understand what scares them.
Building confidence and competence
The good news is that building confidence and competence go hand in hand. Confident
employees are more likely to try new behaviours and approaches, which breeds creativity
and more success These seven techniques will help you build a more confident,
competent team:
1. Treat them with deep respect.
No one wants to feel like a project. Connect with them personally and really listen to
what is going on. Listen to the verbal cues they give about their lack of self-confidence
and then treat them like the high-performers you know they are capable of becoming.
2. Be specific about what's right.
"You've got potential" will fall on deaf ears to someone who doesn't buy it. Be as specific
as possible with examples when giving praise. "When you said X, did you see the
conversation change? You are making a difference."
3. Have them teach others.
Take note of their very best skills and gifts, and have them share with others on the team.
If they know they’re good at something specific, they’ll be more apt to have the
confidence to speak about it with their peers. If they resist, start with having them help
someone one-on-one and then evolve to bigger gigs.

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4. Help them prepare.
Nothing builds confidence more than being the "smartest" guy in the room. The truth is,
nine times out of 10, the "smartest" guy in the room is really the most prepared. Let them
know that and ensure they do their homework by role playing the scenarios they’re most
likely to face. The next time it will be easier.
5. Celebrate incremental improvements.
Have you ever tried confidence bursts? They’re like running or training bursts, followed
by a period of “active recovery.” You can build more confidence and competence on your
team by training them in intervals. It’s not the gruelling hours, but the constant pushing
on limits and stretching of competence levels that leads to growth.
6. Scaffold achievements.
Sure, throwing an employee into the deep end and having them figure it out may build
confidence, but only if they don’t drown in the process. Far better to create a framework
around them that provides support and check-ins along the way.
7. Encourage them through mistakes.
When an employee lacks confidence, even the smallest mistake will affirm their feelings
of inadequacy. Help employees realize that failure is indeed a step to success. Teach them
to “fail forward," to make the most of their mistakes.
Yes, building confidence takes time and energy. It's worth it. It creates long-term impact
for the employee, for the team and for your company. Turning around confidence will
rank high on your personal lifetime leadership achievement awards. No one will call it
out, but you'll know, and so will they.
iv) Genuine Humility:
It’s perfectly proper for humble people to celebrate every accomplishment, ability, and
blessing. The problem occurs when people believe they deserve, have earned, or have the
right to the praise and/or preferential treatment because of those things.

Humility is not thinking less of yourself; it is thinking of yourself less.
Genuine humility is not putting yourself down. Genuine humility is what puts “self” in
perspective by applying the following three truths…
3 Steps to Genuine Humility
1. Praise and thank God for every accomplishment, ability, and blessing. – Recognize that
everything is a gift. Everything! Each talent, gift, possession, and relationship is a
blessing from the hand of a loving God.
2. Do your best. Always. – You are only a steward (manager) of each gift you’ve been
given. Excellence is an important part of humility, using every blessing to glorify God as
a humble act of gratitude and praise.
3. Serve others with your gifts. – God gives time, health, wealth, abilities, and talents so
they can be used to glorify Him and benefit others. Those with genuine humility use their
gifts to serve and bless others.

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UNIT -3
CREATING A BEST FROM SCRATCH:
A team is a small number of people, with complementary skills, who are committed to a
common purpose ,performance goals, and approach for which they are mutually
accountable.
STAGES OF TEAM:
There are a number of different potential objectives when you are planning any corporate
team building, team activities or games. These objectives help you determine the goals of
the event and understand what you are wanting to get out of the event. From knowing
your objevtives you can determine whether the event has been a success.
1. Collaboration
A key element of any successful teams is how well the team collaborates together and
how well it collaborates with other teams. Having teams who want to help each other to
make the company succeed in its main goals can make a huge difference to how
successful a company is
2. Communication Change management
Change is necessary in every team on an almost continual basis. One of the worst phrases
in any business is "Because we've always done it that way." We don't mean changing for

changing’s sake but having the ability to make the most out of change and managing the
change within teams so it becomes a benefit rather than a negative.
4. Problem solving
Like Change problems will always arise in any businesses and every team. However good
your risk management is and your foresight to see problems before they arise there will
always be some issues which need to be ironed out. Problem solving activities help teach
how to react to problems in a calm manner and overcome them without them becoming
far larger than they were.
5. Flexible thinking
The ability to be flexible is a vital skill within every team because there will always be
new challenges and tasks arising which are not specifically part of anyone’s job
description. The ability to see the benefits in working another way and to try new ideas
can be a huge boon for any business.
5. Morale building
No one wants to work in a team which has low morale however a team with high morale
and a great working relationship can be seen as the place to be. A high general morale can
help lower staff turnover and increase staff retention which will reduce your recruitment
and trainings costs as a result.
6. Trust
A team which doesn’t trust each other will struggle to function beyond the most basic
terms. Trusting your colleagues to hold up their end of the workload and trust from
managers to complete a project without the need for micromanagement can greatly
increase the efficiency of any team. Trust based activities.
7. Vision
The ability to see the bigger picture is the ability to see where a small project fits in to the
larger goals of the company even where it isn’t always immediately apparent.
Understanding where you fit in to the bigger organisational goals can help an employee
see their worth to the company and their feeling of being valued.

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8. Delegation
Delegation is more common for team leaders and managers as they more often have the
need to delegate tasks or projects to their team members and subordinates. The ability to
delegate effectively can also become an important skill where a team member might head
up and individual project with others reporting to them.
9. Lean Thinking
Not wasting resources is really important to every business and not just in tough
economic times. A company which employs a lean thinking and reducing wastage policy
will be in a better position to weather tough economic times. Lean thinking needs to be
built in to the company ethos from top to bottom to be fully effective.
6 Principles For Building A Killer Team
1. Define your goals:
You’ve heard this before, and you’ll keep hearing it. This must be your first step every
single time. Decide where you are going. Decide the problem you are trying to solve or
the opportunity you are trying to leverage. Decide what the purpose or mission is. This is
required and critical, because only when you clearly know what goals you are trying to
achieve do you have a reasonable chance of reaching them.
2. Identify the necessary skills before you start choosing names:
Once you know where you want the team to go, you need to profile the skill sets that
individual members need to possess to achieve the goals. Will your success be determined
by your ability to manage cost, hit timelines, expand creativity, or something else
entirely? What skills will you need to achieve your goals? What technical expertise will
you need? Will you need someone with certain relationships, judgment, or experience?
3. Identify the necessary behaviour:
When building a new team from scratch, you also need to profile the correct behaviours.
By that I mean that you should make a conscious choice about the ways you want the
people on your team to behave. Is your team cross-functional and does it include people
from lots of different parts of a large organization? If so, you probably want people who
communicate well and are willing to reach outside of their silo. Is your team global, with

lots of different cultures and native languages present? If so, you probably want people
who have a global mindset and innately understand that not everyone acts, speak, and
thinks exactly like they do.
That “perfect” candidate with the right skills that we described in the preceding paragraph
might also be difficult to work with, or a terrible communicator, or slow on meeting
deadlines. Once you decide those behaviours are important to your success, then that
perfect candidate with the correct skills may turn out to be not so perfect after all. So, in
addition to profiling the skills you’ll need, you should also profile the behaviours that will
be conducive to a positive team dynamic.
4. Identify the rules and expectations:
This step has two major benefits. First, such a framework can be used to screen potential
team members. You can present these rules and expectations and ask them, “Are you
willing to be a part of this?” And second, once your team is formed and is moving
forward, you can return to these pre-established rules and expectations to resolve any
issues or disagreements that arise. Instead of relying on the typical emotional responses
when people disagree, you can calmly go back to the rules and expectations you set out at
the beginning and use those to resolve the dispute. You might even go so far as to “game
out” certain potential disagreements in advance and anticipate how you would deal with
them as a team. Later, if such a disagreement actually happens, you have the benefit of
having already discussed, as a team, the manner in which it will be handled. Such a
strategy allows you to be an objective, unemotional leader.
5. Start naming names:
Finally, we get to the names. Now, with goals, skills, behaviours, rules, and expectations
defined, it’s time to name the people who will fit with your team. Following steps one
through four should allow your search to be logical and focused, since you will know
what you’re looking for. As I wrote earlier, I’m always intrigued by how often that
“perfect” candidate everyone wanted to talk about at the beginning turns out to be not so
perfect at this stage in the game–and how often the team ends up considering someone it
never would have considered before.
6. Create agreement on the team plan:

27
Once you have named your team, the last step is to bring everyone together and
communicate the steps you took to build the team and why. We believe it is important for
people on the team to understand the goals, skills, and behaviours that were profiled
ahead of time and what the team rules and expectations are. In other words, you want
people to understand why they are there and why you thought they would perform well in
this particular team setting. You want people to understand how you expect them to
behave individually and as a group.
Advantages of Working in a Team:
1. Division of Work:
2. Shared responsibility when things go wrong:
3. Gaining new perspective:
4. Improves communication skills: .
5. Development of leadership qualities:
6. You get to play to your strengths: Since there is a division of work in a team each
member can focus on whatever aspect of the project which each individual believes that
he or she can handle. When you work in a team you get to decide on which part of the
project you are comfortable working on. If there is something you are not comfortable
working with then you do not have to stress yourself about it you can simply look into
something else. Everyone’s talents lie in different fields so you can take up whatever task
you feel comfortable working on and whatever task you think you will not be able to do
justice to, someone else can take that up.
Disadvantages of Working in a Team:
1. Indulging in the blame game when things go wrong: In times of crisis it is easiest for
the team members to point a finger at someone else and indulge in the blame game. Since
there is more collective rather than individual responsibility involved in a team project it
is often difficult to tell where things went wrong. Things become most challenging when
one person does his work correctly and the other makes a mistake, as many individuals
cannot bear the thought of shouldering the blame when they did their own part flawlessly.
People also resort to the blame game when they believe that there has been an unequal

and unfair distribution of work. Problems like these almost always arise when people
work in teams. These problems cost rifts among even the best of friends.
2. Unequal involvement and participation of different members: It is challenging to work
in a team when everyone does not put in his or her best efforts. There are two kinds of
people while working in a group- those that work tirelessly to get things done and then
there are those that are laid back and do not adhere to any deadlines. It is due to some lazy
individuals like this that things go wrong and to avoid failure it is often either the team
leader or other team members that have to take on the additional task of completing
another person’s quota of work as well.
3. Clash of ideas: Things can go incredibly wrong or even fall apart when there is a great
deal difference in the working methods of different individuals. Many people prefer to
work much in advance and some people believe in working last minute as they think that
the pressure brings out the best in them. In such a case it becomes increasingly difficult to
coordinate things among different people. In addition to having varying working styles,
things also become complicated when there is a clash of ideas and neither members are
willing to compromise. Differences in methodology are much easier to sort out as
opposed to ideological differences.
4. One team members desire to outshine the rest: When working in a team it is important
for each member to have team spirit. It becomes complicated when one member has the
burning desire to outshine the other members of the team. When an individual starts
putting his individual needs before the needs of the group, then the groups can no longer
function efficiently. Those individuals that want to show themselves to be better than the
rest often fail to shares or communicate their own ideas to the rest of the team and this
leads to a communication gap or even a breakdown of communication as a whole.
Working in a dysfunctional group often becomes a source of tremendous stress.
5. You might have to deal with an over bearing team leader: One of the most common
disadvantages of working in a team is that you might have to deal with an over bearing
and authoritative leader that is unwilling to listen to your point of view or ideas. In
addition to this, it might be more painful when the leader takes the praise for work that
you have done or ideas which you have come up with.

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These are some of the chief pros and cons involved in working in a team. Though there
are a number of advantages involved in being a part of a team, yet at the same time there
are an equal number of pit falls, making you wonder if working individually is actually a
better option.
TURNING AROUND AT TEAM:
1. Coaches Modelling the Way
Despite the external pervasive pessimism surrounding the program after the 1-6
conference start, the Michigan coaching staff of John Beilein, Jeff Meyer, Bacari
Alexander, and LaVall Jordan trusted themselves and their system. With no seniors on the
team, they stayed optimistic and upbeat because they knew how fragile a young team
could be in terms of confidence. Assistant coach Jeff Meyer explained, "With young kids,
we felt like we needed to model the positive energy to make progress... we needed to stay
the course and stay true to our values."
2. Back to Basic Core Values
On an international trip to Belgium and Amsterdam the previous summer, the Michigan
coaching staff invested the time to explore and document their core values. They
determined exactly what they wanted the program to stand for and be about. After much
soul searching and discussion, the staff came up with five core values that they wanted to
be the foundation of their program. They were:
1. Integrity: Do what's right because it is the right thing to do.
2. Unity: Team first, Lead by giving, Make teammates better.
3. Passion: Commit to excellence with positive energy and relentless persistence
4. Diligence: Pursue excellence with 100% effort and efficiency everyday
5. Appreciation: An attitude of gratitude, grow in both victory and defeat
The coaches affectionately refer to this values clarification exercise as the "Summit in
Amsterdam." They felt this preseason undertaking provided them with the solid
framework they needed to weather the storms of adversity they later faced during the
early part of the Big Ten season.

In their early season practices, the coaches then emphasized each one of the five core
values on a weekly basis. It was their way to discuss and teach the culture of what they
wanted Michigan Basketball to be all about. They placed prominent signs of the values
around the locker room and harkened back to them throughout the season. These core
values served as a solid foundation and helped the team grow in both victory and defeat.
3. Don't Stop Believing
Despite the rough conference start, the team stuck together and continued to believe.
After a very difficult loss on the road to North-western, sophomore point guard Darius
Morris publicly predicted the team would still win at least 20 games, which would be
necessary to give them a chance at an NCAA tournament bid. (Michigan ended up 21-13
overall.)
4. Keeping It Green
As part of the Michigan Leadership Academy for my late January visit, we really
emphasized the importance of leaders being focused and poised under pressure. I shared
with the emerging leaders from each of the Michigan teams a traffic light analogy
(originated by Ken Ravizza) to help the leaders better monitor and maintain their
composure. Basketball players Darius Morris and Tim Hardaway Jr. took the lessons to
heart and immediately began applying them on the court.
5. Leaders Stepping Up Big
A final key to the turnaround was the ability for key leaders to step up and make some big
plays under pressure. As I mentioned earlier, at 1-6 in conference, Michigan went on the
road to play 25 Michigan State in the raucous Breslin Centre. That week junior co-captain
Zack Novak told the team, "This is our chance right here. We're 1-6 but if we go in and
win at Michigan State the season changes just like that. It's an immediate change. Trust
me. Everyone's back with us, the fans will love us, and we'll feel so much better about
ourselves. We've got to get this win."
MAKING A RIGHT INVESTMENT IN THE TALENT:
Talent management is the process of finding, developing, training and keeping employees
whose skills best align with the needs and objectives of the company. The goal of talent

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management is to hire the best employees the business can afford so that the company
reaches its maximum potential for success.
1. You will make sure you have the right person doing the right job.
When you look at people's skills and strengths, you’ll see a best fit for each role.
Competency mapping used in talent management allows you to take stock of skills in
your organization. This results in both increased productivity and job satisfaction.
2. You will empower and impassion your staff.
If you view staff simply as a number, you do realize that they know this! On the other
hand, if you value them, invest in them and their future, they will work for the greater
good of the organization rather than just their salary.
3. You’ll encourage loyalty from your staff (especially important with the younger
generation).
People now prefer flat organizational hierarchies, build careers around jobs and want a
clear performance management system.
4. You’ll close organizational skills gap by identifying them and taking clear action.
The performance difference between talented people and those with less talent is huge.
Employees and how they are managed is the most important source of most
organizational competencies and strengths.
5. You will have a better chance of retaining top talent.
Beware of losing your best staff to your competitors! The focus should be on employee
retention programs and strategies to develop and engage staff- therefore keeping quality
people.
6. You will make fewer hiring mistakes.
The quality of an organization is, quite simply, the quality of staff it has. Many talent
management programs implement hiring assessments as part of the recruitment and
selection process.
7. You will understand your staff better.

Employee assessments give great insights about your team. This helps in planning
development as you will understand their needs, career aspirations and strengths and
weaknesses.
8. You will make better professional development decisions-for the good of your
team and your company.
When you get to know who has high potential, it becomes easier to invest in their future
professional development and to align these plans with your company vision.
9. Your employees will feel valued and therefore be more motivated.
Having a strong talent management culture also determines how employees rate their
organizations as workplaces and how much they feel part of the culture.
10. You’ll increase staff confidence in your organization.
If employees are positive about talent management practices of the organization, they are
more likely to believe the vision of the organization. The result is a workforce that is
engaged, committed and determined to do what is best for your company.
What steps can an organization take to get its talent management right?
 The first step an organization needs to take, is to ensure that talent management is
integrated into a coherent system.
 aim talent management at goals that drive business strategy.
 Ensure that talent management includes the recruitment, retention and
rewarding/recognizing talent that provide the organization with a distinct competitive
advantage.
 Annually updating and adapting its strategy to reflect changes in the economic
sectors where the company plays.
 Employ updated practices, such as social media, to promote the company’s brand
in the market place.
Importance of Talent Management
Following are some reasons for which the use of talent management application is
considered to be crucial:

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 Getting the right data: Taking the right strategic decisions in the HR domain
relies on accurate data, and as any HR manager would know, good data is hard to come
by. That’s where a talent management tool can help by automating the core processes and
helping you capture data for making better decisions.
 Engage the employees: It’s important for the HR department to keep the entire
workforce engaged and give them a sense of belonging and progress. But it can get quite
challenging, given the overall complexity of the function. That’s why more and more HR
managers are relying on talent management applications to develop and streamline
important processes.
 Automate repetitive tasks: Certain tasks are best done automated, like creating
salaries or updating leave info. These and many similar tasks can be automated to free up
resources for strategizing and more critical tasks that can pay back over time.
Talent management helps you get in control of your organization’s talent and make sure
the talent base grows with time.
COMMUNICATING CLEARLY AND BROADLY:
1.Keep the message simple, but deep in meaning:
Most organizations have a deeper meaning as to why they exist. This tends to influence
strategy, decision-making and behaviours at executive levels, but often isn’t well
articulated for employees. What you call it doesn’t matter, your purpose, your why, your
core belief, your centre. What does matter is that you establish its relevance with
employees in a way that makes them care more about the company and about the job they
do. It should be at the core of all of your communications, a simple and inspiring message
that is easy to relate to and understand.
2.Build behaviour based on market and customer insights
For employees to fully understand how your strategy is different and better than the
competition they need to be in touch with market realities. The challenge is in how to
effectively convey those realities so that your people can act on them. By building
internal campaigns based on market and customer insights, you bring your strategy to life
for your employees through this important lens.
3.Use the discipline of a framework.
Not all messages are created equal. They need to be prioritized and sequenced based on

their purpose. I suggest using an Inspire/Educate/Reinforce framework to map and deliver
messages on an annual basis.
Inspire. Messages that inspire are particularly important when you are sharing a
significant accomplishment or introducing a new initiative that relates to your strategy.
The content should demonstrate progress against goals, showcase benefits to customers,
and be presented in a way that gets attention and signals importance.
Educate. Once you’ve energized your team with inspiring messages, your explanations of
the company’s strategic decisions and your plans for implementing them should carry
more weight. To educate your teams most effectively on the validity of your strategy and
their role in successful execution, make sure you provide job-specific tools with detailed
data that they can customize and apply in their day-to-day responsibilities.
Reinforce. It isn’t enough to explain the connection between your company’s purpose and
its strategy — and between that strategy and its execution — once. You’ll need to repeat
the message in order to increase understanding, instill belief and lead to true change
overtime.
4.Think broader than the typical CEO-delivered message. And don’t disappear.
Often corporate communications has a strictly top-down approach. I’ve found that
dialogue at the grassroots is just as important, if not more so. Employees are more likely
to believe what leaders say when they hear similar arguments from their peers, and
conversations can be more persuasive and engaging than one-way presentations.
5.Put on your “real person” hat.
And take off your “corporate person/executive” hat. The fact is, not many people are
deeply inspired by the pieces of communication that their companies put out. Much of it
ignores one of the most important truths of communication — and especially
communication in the early 21st century: be real.
6.Tell a story.
Facts and figures won’t be remembered. Stories and experiences will. Use storytelling as
much as possible to bring humanity to the company and to help employees understand the
relevance of your strategy and real-life examples of progress and shortfalls against it. Ask
employees to share stories as well, and use these as the foundation for dialogues that

35
foster greater understanding of the behaviours that you want to encourage and enhance
versus those that pose risks.
7.Use 21st-century media and be unexpected.
The delivery mechanism is as important and makes as much of a statement as the content
itself. Most corporate communications have not been seriously dusted off in a while, and
the fact is, the way people communicate has changed tremendously in the past five years.
Consider the roles of social media, networking, blogs, and games to get the word out in
ways that your employees are used to engaging in. Where your message shows up also
says a lot.
8.Make the necessary investment.
Most executives recognize how important their employee audience is. They are the largest
expense to the company. They often communicate directly with your customers. They
single-handedly control most perceptions that consumers have about the brand.
MOTIVATION AND TEAM ENGAGEMENT:
Step 1: Clearly define your vision.
Make sure that your vision is provided as a roadmap for your employees, and that they
know each twist and turn.
Step 2: Give employees what they want and need.
Don’t just assume that each and every one of your employees has all the tools, training,
and support from supervisors they need –check in with them personally and find out.
Step 3: Communicate well and often.
Training sessions, memos, newsletters, FAQs, and regular meetings can all be used to
present your vision to your employees. Make sure to ask questions, and if they are
confused, redesign the way the information reaches them.
Goodman and Truss recommend the following objectives:
Obtain individual buy-in
Obtain commitment to the change

Minimize resistance
Reduce personal anxiety
Ensure clarity of objectives
Share information/vision
Challenge the status quo
Obtain clarity
Minimize uncertainty
Step 4: Get everyone engaged.
Figure out a way to get all of your employees engaged in planning and decision-making.
That way the project becomes their baby: something they’re willing to fight for. To do
this, whenever possible, ask for input and use their ideas. This way, they have a vested
interest in seeing the project succeed. This can not only empower and motivate
employees, it can also lead to new and more productive ways of working that normally
would be overlooked during more stable times.
Step 5: Coach for success, and practice random acts of kindness.
Feedback is another great motivator. Don’t wait for the periodic reviews; instead, offer
feedback as often as possible. Positive feedback should be given right away, to encourage
more of the same performance. Negative feedback should also be given a.s.a.p., so that
workers have the opportunity to self-correct.
Step 6: Act fairly, respect, and create trust (don’t be a jerk).
Use your judgment, wisdom, and experience to create a supportive environment. When
problems arise, examine the circumstances, understand the context, and only then pass
judgment. Respect and trust your team and you will get the same in return. If you make
a mistake, apologize and admit you were wrong. This will allow your employees to relate
to you better, and they will appreciate your honesty.
Step 7: Trust and verify, but also try to make work fun.

37
Good bosses pay attention to the big picture and the details, and care about both the
product and the employees. A good way to show that is be involved in the creation
process, and to pay attention to what is going on. And remember to do this with a smile
on your face. Lighten up! Making work fun really pays off, since people often get a lot
more done when they enjoy themselves.
Step 8: Give special attention to high-potential employees.
“Even in a tough economy, high-potential employees have other opportunities,” according
to Douglas Klein, president of Sirota Survey Intelligence. A study they conducted
showed that during an economic crisis, employees who are anxious about their future can
negatively affect a company. The reason is simple and obvious: they are less engaged in
their jobs, and they may be making plans to leave.
Step 9: Be creative to avoid downsizing.
“An employer that treats its employees as true partners makes every effort to avoid
layoffs,” according to Klein. The key is for employees to trust that management is doing
everything possible to retain them. Voluntary steps to reduce costs, which Klein calls
“rings of defence” can be employed to avert disaster.
Step 10: Implement incentive programs.
No matter of what kind of business you are in, you should look into incentive programs.
They have been shown to be highly beneficial in motivating employees, and a major
benefit is that the cost can be based on actual performance and paid out only after an
employee has reached the desired goal.

UNIT-4
LEADING CHANGE:
PROCESS:
1.A SENSE OF URGENCY
A Sense of Urgency is a powerful tool for anyone wanting to win in a turbulent world that
will only continue to move faster. Management control systems and damage control
experts serve a critical purpose. But don’t let that blind you to an increasingly important
reality. Controls can support complacency in an era when complacency can be deadly.
Handled properly—and we know the rules for proper handling a crisis can offer an
opportunity to increase needed urgency, an opportunity that cannot be disregarded.
2. BUILD A GUIDING COALITION
After being a member of our first Guiding Coalition I was selected to co-lead our
second Guiding Coalition. Our work with Kotter gave me the opportunity to explore my
own passions in the workplace. As a millennial, it is really important because I’m not

39
sure what type of career I’m going to have, and working with Kotter has exposed me to
all different parts of the organization that I wouldn’t have worked with otherwise.
3.FORM A STRATEGIC VISION AND INITIATIVES:
Clarify how the future will be different from the past and how you can make that future a
reality through initiatives directly to the vision.
4.ENLIST A VOLUNTEER ARMY
Large-scale change can only occur when massive numbers of people rally around a
common opportunity. They must be bought-in and urgent to drive change – moving in
the same direction. It’s not a project. It’s a movement. It’s a journey. Join us and leave
your mark.
5. ENABLE ACTION BY REMOVING BARRIERS
Removing barriers such as inefficient processes and hierarchies provides the freedom
necessary to work across silos and generate real impact.
6. GENERATE SHORT-TERM WINS
Wins are the molecules of results. They must be recognized, collected and
communicated – early and often – to track progress and energize volunteers to persist.
7. SUSTAIN ACCELERATION
Press harder after the first successes. Your increasing credibility can improve systems,
structures and policies. Be relentless with initiating change after change until the vision
is a reality.
8. INSTITUTE CHANGE
Articulate the connections between the new behaviours and organizational success,
making sure they continue until they become strong enough to replace old habits.
These results and initiatives have an extraordinary and immense value, because it
contributes not only to the spirit of the participants, but it also shows with evidence and
tangible clarity that this dual system is for us reachable and doable and is dependent on

the desire, curiosity, interest and passion that each of us can bring to his or her daily
work.
10 PRINCIPLES OF LEADING CHANGE:
Lead with the culture. Lou Gerstner, who as chief executive of IBM led one of the most
successful business transformations in history, said the most important lesson he learned
from the experience was that “culture is everything.” Businesspeople today understand
this. In the Katzenbach Center survey, 84 percent said that the organization’s culture was
critical to the success of change management, and 64 percent saw it as more critical than
strategy or operating model. Yet change leaders often fail to address culture—in terms of
either overcoming cultural resistance or making the most of cultural support.
Start at the top. Although it’s important to engage employees at every level early on, all
successful change management initiatives start at the top, with a committed and well-
aligned group of executives strongly supported by the CEO. This alignment can’t be
taken for granted. Rather, work must be done in advance to ensure that everyone agrees
about the case for the change and the particulars for implementing it.
Involve every layer. Strategic planners often fail to take into account the extent to which
midlevel and frontline people can make or break a change initiative. The path of rolling
out change is immeasurably smoother if these people are tapped early for input on issues
that will affect their jobs. Frontline people tend to be rich repositories of knowledge about
where potential glitches may occur, what technical and logistical issues need to be
addressed, and how customers may react to changes.
Make the rational and emotional case together. Leaders will often make the case for major
change on the sole basis of strategic business objectives such as “we will enter new
markets” or “we will grow 20 percent a year for the next three years.” Such objectives are
fine as far as they go, but they rarely reach people emotionally in a way that ensures
genuine commitment to the cause.
Act your way into new thinking. Many change initiatives seem to assume that people will
begin to shift their behaviours once formal elements like directives and incentives have
been put in place. People who work together on cross-functional teams will start
collaborating because the lines on the chart show they are supposed to do so.

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Instead of implementing a dramatic, full-scale turnaround, the change team demanded
that leaders adopt three specific behaviours:
Make major, visible decisions in days instead of weeks or months.
Spend time with people at the frontline leadership (supervisory) level, asking for their
input and engaging them in frank discussions.
Ensure the middle and lower ranks have direct contact with real-life customers.
Engage, engage, engage. Leaders often make the mistake of imagining that if they convey
a strong message of change at the start of an initiative, people will understand what to do.
Nothing could be further from the truth. Powerful and sustained change requires constant
communication, not only throughout the rollout but after the major elements of the plan
are in place. The more kinds of communication employed, the more effective they are,
which is why HP’s tearing down that fence was so important: Symbols reinforce the
impact of words.
Lead outside the lines. Change has the best chance of cascading through an organization
when everyone with authority and influence is involved. In addition to those who hold
formal positions of power—the company’s recognized leaders—this group includes
people whose power is more informal and is related to their expertise, to the breadth of
their network, or to personal qualities that engender trust.
Pride builders are great at motivating others and inspiring them to take pride in their
work. People influenced by them feel good about working for the organization and have a
desire to go above and beyond.
• Trusted nodes are go-to people. They are repositories of the organization’s culture. They
are the ones approached by people who want to know what’s really happening in the
organization—for example, when they’re trying to figure out if those leading a change
initiative are actually going to follow through.
• Change or culture ambassadors know, as if by instinct, how to live the change the
organization is making. They serve as both exemplars and communicators, spreading the
word about why change is important.

Leverage formal solutions. Persuading people to change their behavior won’t suffice for
transformation unless formal elements—such as structure, reward systems, ways of
operating, training, and development—are redesigned to support them. Many companies
fall short in this area.
Leverage informal solutions. Even when the formal elements needed for change are
present, the established culture can undermine them if people revert to long-held but
unconscious ways of behaving. This is why formal and informal solutions must work
together.
10.Assess and adapt. The Strategy&/Katzenbach Center survey revealed that many
organizations involved in transformation efforts fail to measure their success before
moving on. Leaders are so eager to claim victory that they don’t take the time to find out
what’s working and what’s not, and to adjust their next steps accordingly.
THE CORPORATE RUSHMOREAN:
Mount Rushmore National Memorial is a sculpture carved into the granite face of Mount
Rushmore, a batholiths in the Black Hills in Keystone, South Dakota, United States.
James O’Toole in his book Leading Change talks about two types of leadership groups-
the Rushmoreans and the Realists. The former in memory of the US presidents whose
faces are carved on Mt. Rushmore, each represents a major theme & role in shaping of the
American history: Although faced with different challenges and employing different
styles, they all never compromised on values such as integrity, trust, listening skills and
respect for followers.

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The four presidents had different themes and challenges to deal with in their respective
times. George Washington (Founding), Theodore Roosevelt (Political philosophy),
Thomas Jefferson (Expansion), Abraham Lincoln (Preservation of the Union)
Their approaches may have been different. But what was common to them was that they
all believed in values. Their main values were integrity, trust and respect for followers.
Realists on the other hand are the ‘here and now’ leaders who focus on immediate gains.
For example Jack Welch was perhaps a ‘realist’ and also an iconic leader. He turned-
around a loss making General Motors in a highly profitable company. But the criticism
for this type of leadership is that it may lack long-term sustainability. Because here the
end justifies the means. This is of course debatable as on several occasions quick results
are needed to survive.
The US recession triggered by the ‘sub-prime’ market has shaken up the US economy
directly and other economies of the world indirectly. We know of the collapse of good
companies such as Enron, WorldCom, Satyam and others. The main cause attributed is
corporate greed and the temptation for short-term gains. How and why did these leaders
get into the trap of losing their companies corporate soul? The issue therefore is why do
some of the best business leaders violate the fundamental values and ethics and bring
about grief in their own and in the lives of their people? Especially when all these
companies were had powerful value and ethics codes.
The 21st century environment is going to pose a myriad of challenges and complexity.
Depleting energy and other resources, terrorism, pandemics and natural calamities are
among a few. How should the leaders of the future develop their capabilities? Is
Rushmorean leadership now relevant? How can leaders win the support and trust of the
people they lead?
THE FALLACY OF TOUGH LEADERSHIP:
No other single business concept is talked about, blamed, praised, or contemplated more
than the concept of leadership. The problem is, very few people in business have ever
known, have ever worked for, or have ever worked with a good leader…or with any
leader for that matter. Because of this, very few in business today know what good
leadership is.

Below I’ve shared some commentary on aspects and concepts of leadership that aren’t
frequently discussed, but are essential for a leader, and sadly, frequently missing in people
in “leadership positions” in business today.
Leadership is difficult -- It is much harder to be a leader than follower. Not only is the
leader expected to have the answer (whether they do or not), the leader needs to
constantly project the air and essence of leadership. Leadership isn’t a 9-5 activity, it is a
way of life. A leader will be judged just as much on their actions in their personal life as
they are judged on their actions at work. Leaders are under a spotlight and a magnifying
glass 24/7, and leaders are held to a much higher standard than non-leaders. This is not a
trivial point. Leaders cannot get away with things that non-leaders may get away with. If
one is going to be a leader, one needs to accept enhanced and constant accountability.
The quality of a leader is reflected in the standards they set for themselves. -- Ray Kroc
One can only lead from the front – If one doesn’t know how to do a subordinate’s job,
then one can’t be a leader. One can direct; one can manage; but one can’t lead. This
should be self-evident, but I know that many people will argue this point. This is why
most positions in civilian corporations have titles like “Director” or “Manager”. Positions
where a person really can lead and be a leader have the word “lead” in the title, like
“Team Lead” or “Practice Lead.” In order to lead someone, one must understand the task
of their followers better than the followers do and most probably demonstrated a mastery
of it at one point in time. In addition, the leader must understand the interaction, effects,
and trade-offs of a position in relation to the rest of the company.
Lead and inspire people. Don’t try to manage and manipulate people. Inventories can be
managed but people must be lead. —Ross Perot
The defining aspect of leadership is Respect – No one will follow someone whom they do
not respect. Respect is earned. One’s title does not give one respect, one’s actions do.
Anyone who falls back on their position or title in order to motivate others to do
something has clearly abdicated the mantle of leadership and proclaimed themselves an
administrative manager, and one can never forget that respect is two-way act. One must
give respect in order to receive it. Anyone who is condescending, arrogant, or dismissive
to the people who are working for them will never earn their respect and therefore will
never be a good leader.

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The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold,
but not bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not
arrogant; have humor, but without folly. —Jim Rohn
Leaders leads by example – A leader has to have the respect of the people they are
leading. By definition, a leader leads, and therefore those being led, follow. No true leader
would ever mutter the words “Do as I say, not as I do”.
Anyone in a “leadership” position who expects their people to be at work from 8:00 in the
morning until 5:00 at night, but shows up themselves for work around 9:00 and leaves at
4:00 doesn’t understand the absolute basics of leadership.
A leader is one who knows the way, goes the way, and shows the way. -- John Maxwell
Leaders aren’t afraid of the truth and have ethics – The truth isn’t always pretty, but it is
always the truth. A leader doesn’t hide unpleasant news, they expose it. A leader has the
ethical fortitude to speak the truth and call things the way they are. This also means that
when business goals and ethics conflict, the leader will choose the ethical path. This is
frequently difficult in business today with all of the pressures to perform, but in the end, a
company is only as ethical and as honourable as the people that comprise the company,
and like one-on-one leadership, people will not follow a company that lies or is unethical.
In matters of style, swim with the current; in matters of principle, stand like a rock. —
Thomas Jefferson
Leaders take responsibility and give praise – A leader protects their people and helps their
people grow. Nothing builds respect faster than taking responsibility for everything that
happens in one’s area. Leaders never blame their subordinates for something that didn’t
go right. Leaders take the blame and the responsibility for anything that goes wrong. This
doesn’t mean that the leader hides weakness, inability, or incompetence, but if a
subordinate is not successful, then it is the leader’s fault that they didn’t define the task
well enough, didn’t train the person to perform the task, assigned a task to someone who
didn’t have the ability to perform it, or didn’t monitor the progress sufficiently.
A leader is best when people barely know he exists, when his work is done, his aim
fulfilled, they will say: we did it ourselves. —Lao Tzu

Leaders know their people – One cannot lead what they don’t know. How can one motive
someone when one doesn’t know anything about them? For direct reports, that means
knowing a lot more than their first and last name. What is their middle name? Where did
they go to school? What is their wife’s name? How long have they been married? What
are their kid’s names and ages? A leader will know all of this about their people. And a
true leader will know the names of those that report to their direct reports. No one will
ever respect or follow someone who doesn’t care about them.
The growth and development of people is the highest calling of leadership. —Harvey
Firestone
DEMOCRATIC LEADERSHIP:
Definition:
Democratic leadership, also known as participative leadership, is a type of leadership
style in which members of the group take a more participative role in the decision-making
process.
Everyone is given the opportunity to participate, ideas are exchanged freely, and
discussion is encouraged. While the democratic process tends to focus on group equality
and the free flow of ideas, the lead of the group is still there to offer guidance and control.
The democratic leader is charged with deciding who is in the group and who gets to
contribute to the decisions that are made.
Characteristics of Democratic Leadership
Some of the primary characteristics of democratic leadership include:
Group members are encouraged to share ideas and opinions, even though the leader
retains the final say over decisions.
Members of the group feel more engaged in the process.
Creativity is encouraged and rewarded.
Researchers suggest that good democratic leaders possess specific traits that include:
 Honesty

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 Intelligence
 Courage
 Creativity
 Competence
 Fairness
Strong democratic leaders inspire trust among followers. They are sincere and base their
decisions on their morals and values.
Features of Democratic Leadership:
Leadership, on the other hand, can be thought of as the power of an individual to
influence others in belief or action. A leader may or may not have formal authority, and
someone with authority may or may not lead. In other words, leadership isn't a position or
office one holds but a behaviour.
Democratic leadership attempts to manage with democratic principles, such as self-
determination, inclusiveness, equal participation and deliberation. The following three
features characterize democratic leadership:
Distribution of responsibility - A manager that leads democratically will distribute
responsibility among his group to facilitate participation in decision making.
Empowering group members - Leaders must empower their members so that the members
can accomplish their responsibilities. Empowerment includes providing training and
education necessary for delegated task completion.
Aiding group decision-making process - A major role of a democratic leader is to ensure
democratic deliberation in making group decisions. This means that a leader should act as
a facilitator and mediator between group members.
Advantages of Democratic Leadership
The techniques used in democratic leadership play a significant role in creating job
satisfaction, since a sense of autonomy, control and participation is fostered within the
democratic leadership style. Greater participation from employees during the decision-

making process could also result in more creative solutions and greater innovation to
address problems and serve the organization better. Below are some specific advantages
of democratic leadership:
1. Solution for Complex Problems
Democratic leaders are typically excellent at solving complex issues. They have the
ability to work collaboratively, using a consensus of opinions to get things done the right
way. The democratic leader often thinks innovatively and encourages others to do the
same, so that solutions to complex and strategic problems can be found.
2. Good Business Fit
Solutions that are democratically derived generally last for the longest period of time. The
democratic process ensures that the solution is reviewed on a continuous basis.
Additionally, engaging team members will enable leaders to maintain effective processes
that fit the business well. Democratic leaders ensure that team members work well with
other individuals, so that they are suitable to function in large corporate environments in
which co-operation and communication are crucial.
3. Strong Teams are Built by Democratic Leaders
Team members under democratic leadership tend to be supportive and strong. Honesty
flourishes and more collective working is done because the opinions of everyone are
taken into consideration. Democratic leaders are usually popular within the organization.
4. Foster Creative Environments
Democratic leaders effectively foster creative environments since they encourage the
input and innovation of team members. Creative designers succeed under democratic
leadership because of the support and nurture that is embodied in this leadership
approach.
Disadvantages of Democratic Leadership
1. Can Appear Uncertain
Democratic leadership can sometimes come across as being indecisive. In certain
situations, especially during a crisis, leaders must be very directive and democratic

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leaders do not function well in an authoritarian role. In the midst of a crisis, no time is
usually available to address everyone concerned.
2. Time Consuming
The consultation process could result in procrastination. If an organization has a project
or issue that is urgent, democratic leaders cannot usually work to the timescales required.
It takes time to talk to a number of individuals and collect a variety of opinions and many
democratic leaders find it difficult to cut corners.
3. Become Apologetic
Democrat leaders sometimes build an environment in which individuals expect for their
idea to be implemented. Where there are a variety of solutions in a particular project, only
one can be implemented and democratic leaders will have to invest time in apologizing
and smoothing things over with individuals whose ideas were not used.

UNIT-5
BUILDING A HOLISTIC RELATIONSHIP WITH SUPPLIERS:
 Dealing with or treating the whole of something or someone and not just a part.
 Developing relationships with suppliers
 Once you have chosen your suppliers, it is important to develop a productive and
professional relationship. The following tips will help you maintain positive
relationships with your suppliers:
 Talk regularly and honestly with your suppliers. Good business-to-business
relationships rely on strong, two-way communication. Where possible, you should
look to make face-to-face contact with suppliers or their representatives.
Set up standardised ordering processes that both parties can easily understand and follow.
 Bring any problems or concerns immediately to your supplier's attention.
 Pay your accounts on time. If you cannot make your payments in time, make sure
you let your supplier know before the due date.
 Avoid making unrealistic demands for products or services. Constantly changing
or rushing orders will frustrate your suppliers.
 Return defective goods promptly.

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 Monitor and review your supplier's performance and measure it against their
competitors. Be prepared to negotiate the terms of trade from time to time.
 Be sure to carefully examine the reasons for problems before cutting ties with a
supplier. Introducing new products, changes in freight and updating ordering
process can cause temporary disruptions. Like everyone else, suppliers will have
ups and downs in their business. Loyalty may earn you understanding during your
own tough times.
 Developing a good relationship with your suppliers is essential for good stock
control.
6 STEPS OF ESTABLISHING AND OPTIMIZING BUYER SUPPLIER
RELATIONSHIP
In order to evolve the Buyer Supplier Relationship, Liker & Choi, (2004) built “The
Supplier-Partnering Hierarchy”, while doing a research on the Japanese carmakers
“Toyota” and “Honda” and found that they have identical scaffoldings, when building
partnerships with their suppliers. This hierarchical model is a six step instruction to reach
the maximum potential in Buyer Supplier Relationship.
The Supplier-Partnering Hierarchy (Liker & Choi, 2004)
Thus, even though if the buyers are required to approach and take several steps for
building a strong Supplier Relationship Management, a precondition of a well-established
Buyer Supplier Relationship is that the suppliers are committed to satisfy their customers
in order to obtain a preferred status and create value along the chain.

BUILDING BEST PARTNER RELATIONSHIP WITH CUSTOMERS:
Building customer relationships is one of the nine customer retention strategies you can
use to improve customer service and reduce customer churn.
Sam Walton, founder of Wal-Mart was famously quoted as saying,
“The goal as a company is to have customer service that is not just the best, but
LEGENDARY.” – Sam Walton
Those words couldn’t be closer to the truth in today’s competitive business world and it is
now more important than ever to build customer relationships that add-value to the
overall customer experience.
A study by White House Office of Consumer Affairs found that 80% of U.S. consumers
say they would pay more to ensure a superior customer experience.
Unfortunately for most businesses, they are making lots of customer retention mistakes.
They don’t know how to create a customer experience that improves customer
service and increases satisfaction.
Here are six tactics to assist you in building customer relationships:

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1. Communicate like a human-being
Sometimes, when I’m speaking to a glassy-eyed, toneless customer service
representative, I can’t believe the Japanese have finally succeeded at making robots look
so human.
What’s funny is many businesses make the mistake of training employees to memorize
greetings, sales pitches and apologies, when all customers really want to do is
communicate with you. When speaking with your customers, try to get face-to-face, make
sure you use their names, make jokes and be polite but conversational. Avoid looking like
a zombie and actually empathize and emote with customers.
2. Learn about your customer
Building customer relationships is much like building rapport as a salesperson. Just like a
good salesperson, you need to know your customer. You must remember the client’s
name, their needs and wants, what kind of dog they own and so forth.
The key to learning about your customer is to continue the conversation after the
transaction. After the sale, do a little research on them. Connect on LinkedIn, find
commonalities within your industries, connections, job roles and more. Start thinking
about ways you can add value to them, whether that be through referrals, forwarding blog
posts or offering training sessions.
In today’s world the easiest way to differentiate your business is by the customer
experience you deliver, not the products you sell. Continuously learning about your
customer every time you meet will extend your customer relationship beyond ‘hi, how is
your dog’, and will go a long way to improving customer service.
3. Live for customer complaints
Negative feedback and customer complaints give you the opportunity to hear what your
customers really think about your service. Complaints help you improve your service,
give you a chance to redeem yourself and, keep potentially toxic reviews from hitting
social media.
That’s provided your know how to handle and monitor customer complaints.

I actually like to look at customer complaints in a positive sense. You want customers
letting you know that you stuffed up. The last thing any business owner wants is a
customer keeping all their problems inside, telling a bunch of people and generally being
a nuisance.
4. Stay in regular contact with customers
The key to building customer relationships is to keep your eye on the ball. Every
interaction with a customer should be treated as an opportunity to monitor and build that
relationship.
I tell all my employees to treat every customer engagement as if you are going to ask for
a referral afterwards. It puts customer service in perspective and goes a long way to
delivering a superior service. – Gordon Tan, Director at Client Heartbeat, R&G
Technologies
Here are some ways you can stay in regular contact with customers:
 Follow up with customers after meetings by phone, email, or even social
media
 Send customers friendly reminders to show that you are
 Forward through blog posts and videos that would be valuable to your
customers
 Send customers a monthly email to keep them up to date with what’s going
on at your company. Include product news, company news and links to
interesting content
5. Build trust with customers
Whether you have a committed, rewarding relationship with your wife, girlfriend, dog or
hamster, by now you’ve had loads of practice at building trust. A customer’s trust and
commitment is built in the same manner.
Commitment is as an essential ingredient for successful long-term relationships.
Developing a customer’s commitment in business relationships does pay off in increased
profits, customer retention, willingness to refer and recommend. Relationship marketing
literature suggests customer satisfaction and trust as major determinants of commitment.
– The Impact of Satisfaction, Trust, and Relationship Value on Commitment

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Here are three tips to build trust in your customer relationships:
 Show compassion in your actions affecting the relationship
 Be honest, credible and keep your integrity (if you say something, make
sure you do it, on time!)
 Show you have the competence to act for the mutual benefit of your
relationship
It’s essential to exhibit these characteristics, because trust diminishes the perceived risk
and vulnerability in a partnership, leading to increased customer satisfaction and
reduced churn. If you don’t act in your customer’s best interests, lie to hide your flaws
and make heaps of dumb mistakes, your customer will realize you can’t be trusted, and
abandon your business relationship.
6. Practice inbound marketing
Traditional ‘Outbound Marketing’ has focused on going to where customers live and
interrupting their day to show them your products and services (i.e. TV ads, blanket
emails). When you practice Inbound Marketing, customers come to you. It’s commonly
known as ‘pull-marketing’ as opposed to ‘push-marketing’ and is a great tactic to help
with building customer relationships.
This can be achieved by creating really valuable content that solves your customers real-
world problems. Use mediums like blog posts, videos, eBooks and whitepapers. Share
your content on the web through social media and by engaging in relevant online
communities. Inbound marketing costs 62% less per lead than outbound
marketing and is a generally considered a lead generation tool. I believe it can actually
help you build stronger customer relationships. It keeps the conversation going by feeding
customers useful content.
7.Building customer relationships improves customer service.
Can you afford to lose a customer due to poor customer relationships?

By focusing on these six tactics, you can start building strong relationships with your
customers that extend beyond the bare product or service. You can improve customer
service that builds ‘sticky’ customer loyalty and reduces customer churn.
Other recommended reading:
 Multiple Channels Damaging Customer Relationships
 Building Customer Relationships for increased confidence and trust
 Consistency: The key to building strong customer relationships
5 Key Ways to Build Customer Relationships.
1. Build your network--it's your sales lifeline. Your network includes business
colleagues, professional acquaintances, prospective and existing customers, partners,
suppliers, contractors and association members, as well as family, friends and people you
meet at school, church and in your community.
Contacts are potential customers waiting for you to connect with their needs. How do you
turn networks of contacts into customers? Not by hoping they'll remember meeting you
six months ago at that networking event.
2. Communication is a contact sport, so do it early and often:
Relationships have a short shelf life. No matter how charming, enthusiastic or persuasive
you are, no one will likely remember you from a business card or a one-time meeting.
One of the biggest mistakes people make is that they come home from networking events
and fail to follow up.
3. E-mail marketing keeps relationships strong on a shoestring budget.
Build your reputation as an expert by giving away some free insight. You have interesting
things to say! An easy way to communicate is with a brief e-mail newsletter that shows
prospects why they should buy from you. For just pennies per customer, you can
distribute an e-mail newsletter that includes tips, advice and short items that entice
consumers and leave them wanting more.
4. Reward loyal customers, and they'll reward you. According to global management
consulting firm Bain and Co., a 5 percent increase in retention yields profit increases of

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25 to 100 percent. And on average, repeat customers spend 67 percent more than new
customers. So your most profitable customers are repeat customers.
5. Loyal customers are your best salespeople. So spend the time to build your network
and do the follow-up. Today there are cost effective tools, like e-mail marketing, that
make this easy. You can e-mail a simple newsletter, an offer or an update message of
interest to your network (make sure it's of interest to them, not just to you). Then they'll
remember you and what you do and deliver value back to you with referrals.
CREATING VALUE TO SHAREHOLDERS:
There are 10 principles to create shareholders value:
1. Do not manage earnings or provide earnings guidance.
Companies that fail to embrace this first principle of shareholder value will almost
certainly be unable to follow the rest. Unfortunately, that rules out most corporations
because virtually all public companies play the earnings expectations game. A 2006
National Investor Relations Institute study found that 66% of 654 surveyed companies
provide regular profit guidance to Wall Street analysts. A 2005 survey of 401 financial
executives by Duke University’s John Graham and Campbell R. Harvey, and University
of Washington’s Shivaram Rajgopal, reveals that companies manage earnings with more
than just accounting gimmicks.
2.Make strategic decisions that maximize expected value, even at the expense of
lowering near-term earnings.
Companies that manage earnings are almost bound to break this second cardinal
principle. Indeed, most companies evaluate and compare strategic decisions in terms of
the estimated impact on reported earnings when they should be measuring against the
expected incremental value of future cash flows instead. Expected value is the weighted
average value for a range of plausible scenarios.
At the corporate level, executives must also address three questions: Do any of the
operating units have sufficient value-creation potential to warrant additional capital?
Which units have limited potential and therefore should be candidates for restructuring or
divestiture? And what mix of investments in operating units is likely to produce the most
overall value?

3. Make acquisitions that maximize expected value, even at the expense of lowering
near-term earnings.
Companies typically create most of their value through day-to-day operations, but a major
acquisition can create or destroy value faster than any other corporate activity. With
record levels of cash and relatively low debt levels, companies increasingly use mergers
and acquisitions to improve their competitive positions.
Companies (even those that follow Principle 2 in other respects) and their investment
bankers usually consider price/earnings multiples for comparable acquisitions and the
immediate impact of earnings per share (EPS) to assess the attractiveness of a deal. They
view EPS accretion as good news and its dilution as bad news.
4. Carry only assets that maximize value.
The fourth principle takes value creation to a new level because it guides the choice of
business model that value-conscious companies will adopt. There are two parts to this
principle.
First, value-oriented companies regularly monitor whether there are buyers willing to pay
a meaningful premium over the estimated cash flow value to the company for its business
units, brands, real estate, and other detachable assets. Such an analysis is clearly a
political minefield for businesses that are performing relatively well against projections or
competitors but are clearly more valuable in the hands of others. Yet failure to exploit
such opportunities can seriously compromise shareholder value.
5. Return cash to shareholders when there are no credible value-creating
opportunities to invest in the business.
Even companies that base their strategic decision making on sound value-creation
principles can slip up when it comes to decisions about cash distribution. The importance
of adhering to the fifth principle has never been greater: As of the first quarter of 2006,
industrial companies in the S&P 500 were sitting on more than $643 billion in cash—an
amount that is likely to grow as companies continue to generate positive free cash flows
at record levels.
6. Reward CEOs and other senior executives for delivering superior long-term
returns.

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Companies need effective pay incentives at every level to maximize the potential for
superior returns. Principles 6, 7, and 8 set out appropriate guidelines for top, middle, and
lower management compensation. I’ll begin with senior executives. As I’ve already
observed, stock options were once widely touted as evidence of a healthy value ethos.
The standard option, however, is an imperfect vehicle for motivating long-term, value-
maximizing behavior. First, standard stock options reward performance well below
superior-return levels.
7. Reward operating-unit executives for adding superior multiyear value.
While properly structured stock options are useful for corporate executives, whose
mandate is to raise the performance of the company as a whole—and thus, ultimately, the
stock price—such options are usually inappropriate for rewarding operating-unit
executives, who have a limited impact on overall performance. A stock price that declines
because of disappointing performance in other parts of the company may unfairly
penalize the executives of the operating units that are doing exceptionally well.
Alternatively, if an operating unit does poorly but the company’s shares rise because of
superior performance by other units, the executives of that unit will enjoy an unearned
windfall.
8. Reward middle managers and frontline employees for delivering superior
performance on the key value drivers that they influence directly.
Although sales growth, operating margins, and capital expenditures are useful financial
indicators for tracking operating-unit SVA, they are too broad to provide much day-to-day
guidance for middle managers and frontline employees, who need to know what specific
actions they should take to increase SVA. For more specific measures, companies can
develop leading indicators of value, which are quantifiable, easily communicated current
accomplishments that frontline employees can influence directly and that significantly
affect the long-term value of the business in a positive way.
9. Require senior executives to bear the risks of ownership just as shareholders do.
For the most part, option grants have not successfully aligned the long-term interests of
senior executives and shareholders because the former routinely cash out vested options.
The ability to sell shares early may in fact motivate them to focus on near-term earnings
results rather than on long-term value in order to boost the current stock price.

To better align these interests, many companies have adopted stock ownership guidelines
for senior management. Minimum ownership is usually expressed as a multiple of base
salary, which is then converted to a specified number of shares. For example, eBay’s
guidelines require the CEO to own stock in the company equivalent to five times annual
base salary. For other executives, the corresponding number is three times salary.
10. Provide investors with value-relevant information.
The final principle governs investor communications, such as a company’s financial
reports. Better disclosure not only offers an antidote to short-term earnings obsession but
also serves to lessen investor uncertainty and so potentially reduce the cost of capital and
increase the share price.
This statement:
 separates out cash flows and accruals, providing a historical baseline for
estimating a company’s cash flow prospects and enabling analysts to evaluate how
reasonable accrual estimates are;
 classifies accruals with long cash-conversion cycles into medium and high levels
of uncertainty;
 provides a range and the most likely estimate for each accrual rather than
traditional single-point estimates that ignore the wide variability of possible
outcomes;
 excludes arbitrary, value-irrelevant accruals, such as depreciation and
amortization; and
 details assumptions and risks for each line item while presenting key performance
indicators that drive the company’s value.
SOCIALLY RESPONSIBLE LEADERSHIP:
DePaul University has a shared understanding of leadership that is a reflection of our
Vincentian heritage and current models of student leadership development.
The development of socially responsible leaders in today's complex, global, and ever-
changing world requires a commitment to students' holistic and integrated learning by a
community of faculty, staff and University partners who accompany and mentor students
on their developmental path. Moreover, it requires that the University community itself
embody what it seeks to develop in its students, thus acting as an effective mentoring
community and environment.

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At DePaul, five broad categories have emerged as central to our understanding of socially
responsible leadership:
1. Self-Understanding & Personal Integrity:
Socially responsible leaders have achieved a sense of self-authorship or personal agency.
They critically assess and actively discern how their personal gifts, talents, resources, and
abilities might best contribute to the broader human community. They articulate and live
with a sense of authenticity, purpose, and ethical integrity. They maintain an appreciation
for the transcendent dimension of human life, and seek ongoing personal and spiritual
development and growth. They understand their personal values within the context of
deeper cultural, historical, and philosophical/theological roots.
2. Taking Seriously the Perspective of Others
Socially responsible leaders engage and listen compassionately to alternative and diverse
perspectives and people. Rooted in the spirit of the Vincentian tradition, they have a
particularly keen recognition and appreciation for the sacred dignity of each human
person, especially those who are poor or marginalized. They demonstrate the ability to
work in a team or a community of people and to interact and communicate effectively
with diverse others in a variety of social situations.
3. Contributing to a Larger Community
Socially responsible leaders articulate, actively reflect upon, and live a commitment in
their life and work to contribute to a community beyond themselves – locally, nationally
and/or globally. Their sense of purpose, mission, and vocation extends to consider the
broader social and environmental implications of their decisions and actions. They
actively participate in civic and political processes and demonstrate an ability to think
systemically about social problems and opportunities in light of some normative
understanding of the just society.
4. Knowledge and Intellectual Competence
Socially responsible leaders have the ability to think critically. They actively seek
historical and contextual knowledge relevant to the concrete situations they experience or
confront. They show the ability to apply knowledge from their expertise or discipline of
study to their particular life experiences and social situations in fruitful ways and in

dialogue with other perspectives and disciplines. In addition, they seek to integrate and
synthesize knowledge from a variety of sources and perspectives.
5. Striving for Excellence
Socially responsible leaders sustain long-term commitments worthy of their attention over
a lifetime or career. They consistently strive for self-improvement and higher standards,
and through their actions and words they effectively inspire others to do the same. They
exercise ethical decision-making and leadership by developing creative and innovative
responses to both emerging and persistent human and societal questions. They are lifelong
learners who pursue and work for an ever-renewed vision of the common good.
LEAVING THE GLOBAL FOOTPRINT:
The simplest way to define Global footprint would be to call it the impact of human
activities measured in terms of the area of biologically productive land and water required
to produce the goods consumed and to assimilate the wastes generated.
 A global perspective is a far more than understanding of worldwide business and
international career opportunities.
 Developing a global perspective involves taking a broader, more critical view of
experience knowledge and learning and includes seeking to understand the links
between our own lives and those of people throughout the world..
 Knowledge and technology has been explosive, however well-being has
stagnated. This presents grand opportunity for humanity.
 Albert Einstein advised:”we cannot solve our problems with the same thinking we
used when we created them.”
 As philosopher Arthur Schopenhauer observed: “Every person takes the limits of
their vision for the limits of the world,” therefore it is important for us to expand
our vision towards a global perspective.
According to the Global Footprint Network calculating ecological footprints will help
motivate people to take actions toward “…a world where humanity lives within the
means of one planet.” They report that mankind’s collective ecological footprint is
currently 23% greater than the Earth’s renewal capacity, causing:
 Global warming

63
 Topsoil depletion
 Groundwater loss
 Habitat destruction and species extinction
 Petroleum, mineral, and ore depletion
 Deforestation and desertification
 Marine life/fishery collapse
1. GROUND TRANSPORTATION
This turning point is the opportune time to let go of one of my favorite possessions; my 4
wheel drive, Nissan Pathfinder. As an activist my ownership of this vehicle is a bit of a
contradiction but I love the road safety, and the space for travel and it is great for heading
out into the wilds of the west coast. The downside is that my SUV consumes a ridiculous
amount of gasoline, making my carbon footprint more than twice what is ecologically
responsible for an individual. Before flying to Costa Rica, I list my truck on Craigslist
and find a wonderful yogi couple living off grid on a local island to hand over the keys to.
2. AIR TRAVEL
Air travel is extensive today, as is our choice of airline companies. With a little on-line
research I identified Nature Air as a small inter-county airline with a mission to go as
green as the country they operate in. Nature Air is the world’s first carbon neutral airline,
becoming certified by the Costa Rican government in 2004. The airline compensates for
100% of its carbon emissions, taking steps towards sustainability that include using bio-
diesel made from used cooking oils to fuel company vehicles.
3. ACCOMMODATION
My living space has gone from a 2 story home with 3 bedrooms and 2 bathrooms in a
cold climate with a large carbon footprint, to a small off grid cabana in a tropical
climate with shared amenities, greatly reducing heating and energy needs.
4. SUSTAINABLE ENERGY SOURCES
Blue Osa Yoga Retreat + Spa is completely off grid, drawing energy for its 50 guests,
staff and volunteers from the sun

5. LANDSCAPING
Designed in harmony with the local jungle and the coastal ecology
6. LAUNDRY
Clothing is washed once a week by staff and naturally dried on a clothesline
7. GROW A GARDEN
Fruit, herbs and vegetables are produced locally by the gardeners in an on-site organic
garden and picked fresh by the Chefs
8. COMPOST
Organic waste from kitchen and gardening is transformed back into nutrients to feed the
soil, seeds and plants.
9. TELEVISION
There are no television screens in the jungle, just the beauty of the natural world to
stimulate the senses
10. COMMUNICATION AND ELECTRONIC DEVICES
Wireless is restricted to a single location to conserve energy
Like many of us, I am conscious of the changing weather patterns and my impact upon
the delicate balance of life on this planet, known as Gaia or Mother Earth. Indigenous
peoples lived in harmonious co-existence with nature, embodying a deep understanding
of the interwoven relationships that led to health and wholeness, or holiness.
Modern society uses terms like carbon credits and natural capital for citizens,
organizations and nations as they strive to become responsible for their carbon footprint.
Many companies and nations are falling behind in ecological responsibility and Costa
Rica is a nation known for its environmental vision, policies and leadership.

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