Multipliers: How the Best Leaders Make Everyone Smarter (25 page)

Yet Elaben insisted on turning over the responsibility for running SEWA to new and younger leadership. She personally invested the time and energy into educating members about the democratic process and encouraged everyone to gain the political literacy needed to step up and run for one of the open positions.

In a fascinating embodiment of SEWA’s mission and management philosophy, Jyoti Macwan, who enrolled as a member of SEWA as a poor Guajarati-speaking, cigarette-rolling worker, went on to become the English-speaking general secretary for SEWA. In this role, she has led the union, which at the most recent election involved 1.2 million people. Jyoti could have spent her work years figuring out how to survive from day to day, but because of Elaben’s leadership, she has used her intellect solving complex problems that reach across international boundaries and affect more than one million women like herself. She recently stood shoulder to shoulder with Elaben and U.S. Secretary of State Hillary Clinton as they answered questions at a press conference.

Jyoti’s story is just the beginning. If you look at the second generation of chief executives of all the SEWA organizations, they all first worked under Elaben’s tutelage. Each was given greater and greater ownership as they matured into capable managers.

Every time Elaben established an institution, she invested in the future leaders, which allowed her to step away from the operational management. The succession was handled so gracefully that she could leave with the confidence that her presence would still be felt as she is elsewhere investing her energy in establishing another institution. The SEWA union was followed by a bank (created from 4,000 women each depositing 10 rupees
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), and this has been followed by the Gujarat Mahila Housing SEWA Trust, the Gujarat State Mahila SEWA Cooperative Federation, SEWA Insurance, SEWA Academy, Homenet South Asia, and many others.

Elaben continues to invest in building leaders and organizations that can operate independently of her. Her influence is like that of a parental figure, giving guidance when people ask for it. She is there when she is needed. Her approach to management is the outgrowth of her simple motto: “A leader is someone who helps others lead.”

How does a leader like Elaben create other leaders who can assume ownership and deliver on the mission of the organization themselves? We find answers in the three practices of the Investor.

THE THREE PRACTICES OF THE INVESTOR

As we studied the unique way Multipliers drive results, I found the practices remarkably similar to another world I know. This is a world driven by intellectual assets and investment multiples where technology and business leaders develop other leaders in search of growth and returns and the creation of wealth. This is a world whose nerve center is just a mile from my house.

On Sand Hill Road in Menlo Park, California, home to Silicon Valley’s venture capital community, multimillion-dollar investment decisions are made many times daily. Venture capital firms scour industries looking to invest in emerging technologies and young companies destined to become the industry leaders of the future. When a venture firm places its bet and invests a round of funding, it draws up a term sheet to govern the deal. Of particular interest to all parties is the specification of ownership levels. These ownership levels outline relative ownership for the business (postinvestment) and dictate expectations for leadership and for accountability. Simply put, the term sheet lets the parties know who is in charge.

Once ownership of the new company is established, the venture firm cuts a check and the investment of resources begins. This funding provides the financial resources to secure capital, intellectual property, and the human resources to fuel the business. But the value
isn’t limited to the financial resources. The real value often emerges from the insight and coaching the start-up company receives from the senior partners at the venture firm. These investment partners are men and women who have grown businesses, incubated technology, and often managed very large companies themselves. They not only invest the capital of the fund, they invest their know-how into these nascent companies. They coach the CEO, they lend their Rolodex to assist with business development and sales, and they work with the management team to ensure financial targets can be met.

After infusing capital and know-how, the venture partners look for expected returns. The returns in the marketplace may be years away (or may never materialize), but they watch for key milestones. The accountability is clear. If the company produces expected results, a second or third round of funding is likely. Otherwise the company is left to make it on its own or die on the vine.

Similarly, in their role as Investors, Multipliers define ownership up front and let other people know what is within their charge and what they are expected to build. They invest in the genius of others in a similar way. They teach and coach. They back people up, infusing the resources they need to be successful and to be independent.

And Multipliers complete the same investment cycle as they demand accountability from others. They understand that this accountability isn’t ruthless. It is the draw that creates such extraordinary growth of intelligence and capability in others.

We’ll look at each of these three steps in turn: 1) define ownership; 2) invest resources; and 3) hold people accountable.

I. Define Ownership

Investors begin this cycle by establishing ownership up front. They see intelligence and capability in the people around them, and they put them in charge.

Name the Lead

When John Chambers, CEO of Cisco, hired his first vice president Doug Allred into the company, he gave the new VP of customer support control and made sure their respective roles were clear. He said, “Doug, when it comes to how we run this area of the company—you get 51 percent of the vote (and you’re 100 percent responsible for the result). Keep me in the loop, and consult with me as you go.” Weeks later, when Doug was updating John on progress, John responded with, “I knew you’d surprise me on the upside.” And it wasn’t just Doug who received majority voting rights. John gives “51 percent of the vote” to every member of his management in their respective areas of accountability.

If your boss had told you that you owned 51 percent of the vote, how would you operate? Would you second-guess yourself and run all decisions by him? Or would you swing in the opposite direction and make decisions without consulting him? You probably would do neither. Most likely, you would consult your boss on important decisions to get a second opinion. And on the smaller stuff, you might be wise to ignore him or her as needed to get your job done.

Giving someone 51 percent of the vote and full ownership creates certainty and builds confidence. It enables them to stop second-guessing and start getting second opinions. Clarifying the role that you will play as a leader actually gives people more ownership, not less. They then understand the nature of your involvement and when and how you will invest in their success. And most important, they understand that they hold the majority ownership position and that success or failure hinges on their efforts.

Give Ownership for the End Goal

A management team is assembled for an offsite meeting to plan an important acquisition for their business. They kick off their work with a simple but powerful management exercise called “The Big Picture.”
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The team divides into nine pairs, and each pair is given a one-inch
square from a photo of a famous modern painting. Each team is tasked with creating a reproduction and enlargement of its piece of the picture. In other words, each team is given a little piece of a bigger picture. The goal for the team is to bring all the enlargements together to form a unified replica of the original painting. The result should be a painting that is technically accurate and flows together seamlessly. The challenge is that no pair has seen the big picture.

You can imagine what happens first. Each pair, energized by the challenge, studies their one-inch square and begins to replicate it onto the large piece of paper in front of them. They dive into the task, make their sketches, and soon color erupts everywhere. As the time allotted for the first phase of work expires, they start turning their attention to their neighboring colleagues in the room. They begin to connect the pieces and notice that the painting isn’t coming together very well. The lines don’t match up. The colors don’t blend. Their creation is looking like Franken-painting.

The session leader reminds them that their job is to optimize the whole, not their individual piece. They start to pay attention to the bigger picture. They rework their sections, focusing on integration and blending, although it is far too late to create a seamless product. The team delivers the big picture, but it remains a patchwork only moderately resembling the original artwork.

When people are given ownership for only a piece of something larger, they tend to optimize that portion, limiting their thinking to this immediate domain. When people are given ownership for the whole, they stretch their thinking and challenge themselves to go beyond their scope.

When George Schneer, Intel division manager for the EPROM memory chip, was building his management team, he staffed it with leaders from each of the functions in the business value chain: engineering and design, manufacturing, marketing, and sales. These leaders had come from other divisions inside Intel and were accustomed to being measured on the performance of their particular function. The sales
leader was measured on sales, the marketing leader on market share, and the manufacturing leader on quality. But George did something different. He asked each member of his management team to assume the same measure of success: profit for the division. The team rallied to ensure the success of the whole division. They managed their individual function, but they readily contributed to solving the challenges in other parts of the business. They offered their full brainpower to the team. Perhaps this is one reason why one member of the management team described the experience this way: “It was our business, and we were winning. There was an exciting pressure. I felt like the smartest guy on the planet.”

Stretch the Role

We consistently find that Multipliers get twice the capability from their people that Diminishers do. And time after time, people tell us how Multipliers not only got 100 percent from them, they got 120 percent or even more. Multipliers do get more than 100 percent of people’s capability because people grow under the watch of a Multiplier. One way that Multipliers incite this growth is by asking people to stretch and do something they’ve never done before.

Consider these three individuals:

Eleanor Schaffner Mosh was a champion who needed a bigger cause. As the marketing director for the small IT (information technology) practice inside Booz Allen Hamilton in 1988, she ran basic demand-generation programs. But when Booz decided to turn over the reins of the IT practice to a different partner who was intent on transforming the function, she suddenly found herself with a really big job. Within months she was organizing a corporate-wide kickoff event to launch the vision for the IT practice. Next she convened a forum of the top CIOs in the world. When she found herself sitting next to the CEO of Booz Allen Hamilton during one of these meetings, she confidently explained to him why the IT industry and the IT practice inside their firm was going to change the world. She said, “I wasn’t afraid of anything or anyone. We knew what we were doing and we felt like we could do anything.”

Mike Hagan was ready to take on the world; but he literally needed a passport. He worked as the director of sales operations for the billion-dollar U.S. sales division of a multinational company. His job was to make sure the sales force complied with company policy. When the president of the sales division wanted to globalize and grow the business, he tapped Mike to figure this out. One day Mike was the policy police, writing tickets for sales administration offenders. The next day he was architecting sales operations and policy for the entire global business. Initially Mike protested, citing his inexperience with global operations. He confessed that he didn’t even have a current passport. His protests were ignored. The president told him that he was smart and would surely figure this out. And he did. The experience was grueling but invigorating. Mike reflected, “I was given an opportunity to do something I had never done before. In fact, no one had ever done it.” The job was huge, but Mike grew into it as predicted.

Polly Sumner was a powerhouse waiting to be unleashed. When a new president joined Oracle, he noticed this channel sales manager’s strategic savvy and drive and asked her to assume a vice president role, running alliances and strategic partnerships. In time, Polly was right in the middle of a very messy high-stakes conflict. The management team could not agree on how quickly Oracle would release new versions of its database code to its applications partner (and also competitor) SAP. Polly escalated the issue to her new boss who responded with, “This is a complex issue, and probably beyond the scope of your role, but you should be the one to lead the resolution.” She went right to the people who could fix the problem. She found herself brokering a conversation between the billionaire founders and CEOs, Hasso Plattner of SAP and Larry Ellison of Oracle in a meeting held at Larry’s Japanese tea house. The issue was resolved to their mutual satisfaction and Polly was a superstar.

These three individuals all worked for the same boss, just in different settings. Who was the common denominator in this equation? It was Ray Lane, known for challenging his team and for exacting every ounce of their capability. When we asked people why they gave Ray
so much, their answers revealed a consistent story: He asked them to do jobs that were far bigger than they were. He could spot smarts in others and gave people a chance to stretch well beyond their current capabilities. He gave them ownership, not at the level of their current capability, but always one—and occasionally two—levels up.