A COMPANY IS KNOWN BY THE COMPANY IT KEEPS


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The value of loyalty and competence

How CEOs get results

It is not simple - to choose the right senior executive teams, have the right vision agreed upon, and come up with the right strategy to achieve the results.

Whether it is internal teams, or the external teams - winning CEOs rarely make any mistakes in finding the right combination of loyalty and competence. 

Figure 1 - The Leadership Matrix

THE VALUE OF LOYALTY AND COMPETENCE

Anyone who has crossed the C-Level barrier does not need the above figure explained to him - intuitively it is well understood. 

They key point we want to make here is that despite that high level of understanding it is still common to see people in all four quadrants in any organisation. Why?

That question is worth pondering.

A bigger question is what can you do about this reality?

Here are six key points worth remembering at all times. Whenever you temporarily forget them, and transgress these very important rules of human leadership, the decision you make will come back to haunt you:

1 . Both loyalty and competence must be tested often

Everyone around you will try to assure you of their loyalty and competence. They will also try to demonstrate these through various means. Just because they succeed in doing so does not mean that you can stop testing them. 

It is beyond the scope of this page to discuss how to test these - but suffice to say it here that test them in small measures, and test them often. 

2. Both loyalty and competence must progress in small measures

This comes natural to most leaders - and the only reason it is mentioned here is to note that whenever any leader has transgressed this law of human nature, they have paid for the transgression. 

3. To a large extent loyalty can go up, or down, with emotions of the person

Finer human emotions such as loyalty, honesty, gratitude have a very small shelf life. They erode quickly with time and other events of life. Emotions play a big role.

Warren Buffet encapsulated it best “Honesty is a very expensive gift, Don't expect it from cheap people.” Loyalty is the same.

4. Competence is situation specific - but it can, to some extent, go up and down with emotions too

Just because I am a ex-ships captain most people assume I will be very good at handling sail boats too. It is not true.

On the other hand, whenever a sail boat is in trouble, my general seamanship, from years spent on water, kicks in, and I can handle almost any difficult situation on water better than most sail boat skippers. 

A small change in situation can change the competence. 

Finally, emotions play a role in level of competence too. Under stress, any person will temporarily make bad decisions. 

5. Do not be misled by a persons peak level of loyalty and competence

At their peak, everyone looks excellent in their competence, and loyalty. If that peak happens to be when you first meet them, or when you last met them, primacy or recency effects take over and you always remember that person in that light.

It takes a conscious effort to undo the primacy effect, or recency effect and to look for a person's average level of competence and loyalty. 

5. Having multiple options is the best way forward

All the forgoing is a precursor to leave this strategic message - as a leader you need the best in competence, and in loyalty.

Keep multiple options when it comes to strategy consultants. Just because a company is good in accounting, or auditing, or general business strategy does not mean they will be anything close to world's best in supply chain strategy.

Loyalty, on the other hand, is something you can judge for yourself. Generally, people with more than one master can only to loyal to themselves.


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