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What’s the difference between a great leader and an average one?

​I’ve had the opportunity to observe dozens of leaders in my career.  Some were exceptional, most barely passed for average.  I’ve spent many hours tossing and turning on the idea of what makes for an exceptional leader, what makes them great.  I’ve read books, had discussions with colleagues, watched videos and talked with people who are far smarter and experienced than myself.

After all of this wonderful introspection and discovery one characteristic continues to pop up which defines great leadership over average leadership.  It’s a mindset, a willingness to do what others often won’t.

What makes great leaders is their ability and willingness to use ‘managerial courage’.
Managerial courage is the linchpin, the cornerstone, the apex for all things related to leading successfully.  The word courage is of itself is an incredibly powerful word.  The late John McCain had described courage as “that rare moment of unity between conscience, fear, and action, when something deep within us strikes the flint of love, of honor, of duty, to make the spark that fires our resolve.”  

Bill George, former CEO of Medtronic and best selling author is quoted as saying “Courage is the quality that distinguishes great leaders from excellent managers.”

George also said, “courageous leaders take risks that go against the grain of their organizations. They make decisions with the potential for revolutionary change in their markets. Their boldness inspires their teams, energizes customers, and positions their companies as leaders in societal change.”
If we apply George’s and McCain’s definitions of courage we can surmise that ‘managerial courage’ is the willingness to make decisions which we believe to be in the best interest or our employees or company, regardless of the popularity or risks involved.

A deeper look into managerial courage and we find that it can be further described as a set of actions and beliefs a leader possesses which define who they are and how they go about leading and inspiring others.  These actions and beliefs include:

1. Courage to lead by your ‘True North’, your authentic self (compliments again of Bill George)
2. Courage to face the truth and to openly express it
3. Courage to act as a servant to your employees
4. Courage to rely on others, while stepping aside to allow those around you a chance to lead
5. Courage to listen and not always be heard
6. Courage to make the right decisions in risky or uncertain situations
7. Courage to give praise for a job well done while taking blame when the house of cards collapses
8. Courage to work outside our comfort zone
9. Courage to impose rigorous standards and hold people accountable

There’s no other word I can think of other than ‘courage’ to appropriately define good leadership.  Primarily because it is so easy to not do the things listed above, especially when times are tough, yet to do them consistently it takes great discipline and resolve.  It also means we will inevitably make decisions which don’t favor ourselves yet position our employees or company for better opportunities.

Here’s what managerial courage looks like in real life.

Scenario: A CEO of ABC company is pressing his VP of Sales to reach revenue targets by year end in order for the company to hit its financial goals.  The VP of Sales has one sales rep in particular who singlehandedly drives 30% of the company’s revenue, consistently coming in as the #1 producer in the company, year after year.  The company relies on this sales rep heavily to produce and as such the company has benefited handsomely.  Unfortunately this same sales rep also causes a lot of problems within the company.  He’s had several complaints against him by other employees, has a bad attitude, disregards company policy, has even been caught using his company expense account for personal purchases.  If that wasn’t enough our lovely sales rep has also caused two other employees within the company to quit.  Even though this sales rep is a cancer to his company, the company overlooks his problems because he’s a top performer.  They’ve swept the issues under the rug hoping things will miraculously improve by themselves.  Let’s face it, he makes the company a lot of money, how can they walk away from that.

Does this scenario sound similar to you?

Managerial courage in the above scenario would look like this.  The VP of Sales provides a variety of opportunities for the sales rep to improve while demonstrating the employee is acting in accordance with company standards and the VP’s expectations. In the event these opportunities to improve and or employment warnings are not adhered to the VP of Sales must make a tough and unpopular decision to fire the sales rep.  It’s a tough decision indeed because the VP of Sales knows she very well may lose her own job because she just went against the CEO and fired an employee that represents 30% of the company’s annual revenue intake.

In this scenario, our VP of Sales chose an unpopular decision because it’s what was truly best for the company and its employees, despite what her boss the CEO had advised.  The VP of Sales fired an employee who is a cancer to those around him.  Ultimately it doesn’t matter how good the sales rep is at their job, if they are causing issues and aren’t able to adjust accordingly after receiving feedback they don’t belong there in the first place.

This is managerial courage.  The willingness to make a decision to do what’s right even when the outcome may be unpopular or damaging.

It takes great tenacity, strength, fortitude, mental determination and care to be a leader and do so successfully.  Sure, anyone can be a leader, but those who do it successfully stand head and shoulders above their counterparts when they utilize managerial courage.  The characteristic of courage is the very essence of what leadership is all about.

Key Take Away:
Standing up for what’s right and having the willingness to make tough decisions is key to being a great leader, even if the outcome may be viewed as unpopular.

Action Item:
Read the book ‘True North’ by Bill George.  It’s an incredibly well written book that teaches people who to be themselves while acting and making decisions which are in accordance with your beliefs.

Are you an effective leader? 

​If you answered ‘Yes’, how did you come to that conclusion?  Did you base your answer off your company financial performance,  goal achievement track record or your wonderful employee morale? What if Peter Drucker himself had an opportunity to review your leadership work, do you think he would come to the same conclusion? 

If by chance you are new to the philosophies and teachings of Peter Drucker I highly suggest taking some time to familiarize yourself with his works.  Short and sweet – Drucker is considered the godfather of business leadership and is responsible for much of what we know today on how effective leaders work and operate.  His works redefined leadership through the 60s, 70s and 80s and we still refer to his teaching on the daily today.

What makes for an effective leader?  Let’s ask Drucker himself.  ‘The Effective Executive’, a leadership book for the times and originally published in 1967, provides eye opening insight on exceptional leadership in ways which broke the mold back then and continue to do so today.  ‘The Effective Executive’ provides a straight forward, simplistic guide to “getting the right things done” for people in a leadership capacity.  What I found amazing about this book is how relevant and simplistic Drucker’s advice is, even for today’s purposes 52 years later in a business world that is far different from when these thoughts were put to paper.

So, what is it then that makes for an effective leader?

All too often I find people enjoy making the topic of leadership how-to’s overly complicated.  Maybe they do that to sell more books or to justify their new and insightful leadership methodology.  For me, I’ve found the more simplistic something is the better chance I have in understanding it, implementing it and continuing to act on it as a new habit. 

Drucker’s approach to leadership success and effectiveness is simplicity at its best.  He identifies the following five core competencies successful leaders should have as a part of the fabric that guides them through their daily work:

1. Managing Time
2. Focus on outward contributions, gearing efforts towards results
3. Knowing where and how to mobilize strength for best effect
4. Setting the right priorities
5. Combining #1-4 with effective decision making

Humbly, I’d like to offer up a 6th leadership core competency to add to Drucker’s list:

1. Empathy. Modern day leadership requires emotional intelligence, or simpler put and ability to be empathetic and understanding of others, especially ones employees.

While this list may seem incredibly simple, I can tell you from personal experience it’s anything but that.  Often times the most simplistic things in life can be the most difficult to master.  Why?  Because it takes discipline.  Though these concepts may be easy to understand, the difficultly comes in the form of holding oneself accountable to doing it above all other things.  That’s the tough part! 

“Intelligence, imagination and knowledge are essential resources [for a leader], but only effectiveness converts them into results.” – Peter Drucker

Being disciplined to doing the right thing at the right time is certainly easier said than done.  So much so that Drucker identifies that the number one reason for leadership failure is the inability or willingness to change with the demands of and expectations of the new job.

Key Take Away:
The leaders’ who are willing to change and adapt while being disciplined to doing the right things at the right time are the ones that will be the most effective.

Action Item:
Read Drucker’s book ‘The Effective Executive’.  Regardless of your job title the insight you’ll gain from his timeless approaches to leadership is worth every minute you spend reading it.
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The demand for consulting is up, way up! 

The US consulting marketplace has grown consistently over the past decade.  In the last three years, 2015-2018, consulting services have increased upwards of 25% bringing it to an estimated $68.5 billion U.S. dollars.

Demand is up and so is the desire from the US workforce to provide the service. 

Whether you’re new to consulting hoping to dive in to get a piece of the current demand for consulting services, or you’ve been consulting for years, you’ve inevitably been challenged with the thought…

“How should I charge for my services?”

Here we’ll give into a quick and straightforward guide for establishing your consulting fees and the things which need to be taken into consideration before settling on your pricing approach.

#1: Research the local marketplace – it is imperative you understand what the marketplace yields for the consulting services you plan to offer this way you have an understanding of how you fit in with your competitors and their respective offerings. Best way to obtain this information is to ask others in the business, attend events and get quotes from others in similar lines of work.  While you always want to make sure you’re getting paid for what you’re worth, you also need to be cognizant of pricing yourself out of the game.

For example, in Irvine, CA there is a large supply of people offering mechanical engineering design services. Baring any unique or niche expertise the average mechanical engineer consultant charges anywhere from $50-80/hr.  If you’re charging $125/hr for similar services you may find yourself missing out on projects with potential clients because the end user, or client, has too many other reliable and capable consultant options to choose from at rates cheaper than your offering.

#2: Fixed cost vs. time & materials – you’ll need to decide up front what type of pricing strategy you’re going to use.  Fixed cost is when you charge a flat fee or a ‘not to exceed’ fee for work you’re performing regardless of the amount of hours it takes you to get the job done.  Time & materials pricing structures price based on the amount of hours it takes to complete the job.  Read more HERE.

#3: Long game mindset – your pricing should reflect both your experience, capabilities but also your willingness to get repeat business from your clients.  If your rate is higher than the average marketplace rate for similar service you may still be able to get work, however you may find the client doesn’t pick you for additional work or longer projects.  Remember, the higher your rate the higher the clients expectations will be on your performance and the further scrutiny you will receive on your work output. 

#4: Know your profit margin – it’s important you understand what potential profit you stand to make for each project.  Profit is what keeps you growing and stable long term.  If you’re constantly breaking even you leave yourself at risk for unexpected downturns and other things out of your control.  Establish an ideal profit margin per project you want to achieve and incorporate that into your pricing.  Learn how to establish a profit margin HERE.

#5: Flexibility is key – clients like working with consultants that are flexible; if you’re too rigid with your pricing you may find you’ll lose out on opportunities in the long run.  Try pricing your work based on the difficulty of completing the task.  Perhaps you have a minimum threshold you’re going to charge per hour (say $100/hr) and then based on the work you’re potentially taking on you will scale your price upwards by 25%.  It’s not uncommon for consultants to have a pricing menu based on the range of their capabilities and difficulty to perform the work at hand.  We suggest not using a ‘one size fits all approach’ for pricing your services.

#6: Know what you need – while you should never price your consulting practice based on your personal lifestyle (clients don’t care how big your house is, what car you drive or what your bills are so they certainly aren’t going to pay you more just because your lifestyle requires it) it is important to know what you need to be charging in order to meet your personal financial obligations.  Once you know this number go back to step #1 in this article to see if your pricing number is in line with the general market.  Don’t charge more just because you need more to live.  Clients can smell that from a mile away and it’s a big turn off. 

Key Takeaway:
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Pricing should be based solely on the value you provide.  Your consulting price should have flexibility built into it while keeping in mind the difficulty of the work being performed.  Ensure you know how the marketplace is operating and what others are charging for similar services so you can be competitive with your offering.

Action Item:

Meet 3-5 people in the consulting space which is similar in nature to yours.  Learn about their offerings, how they go about pricing their service and what challenges they’ve had with clients specific to pricing.  The more you can learn from them ahead of your own efforts the better off you’ll be when it comes time to present your price in front of a potential customer.
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