Rule #3: Leadership Is Confusing As Hell

You think the past five years were nuts? You ain’t seen nothin’ yet! It’s only going to
get weirder, tougher, and more turbulent. Which means that leadership will be more
important than ever — and more confusing ( see rule #3 ).

by Tom Peters
illustrations by Barry Blitt
from FC issue 44, page 124

Sound Off: Tell us what you think.

Ladies and gentlemen, the captain has turned on the "fasten
seat belt" sign. Please return to your seats immediately! Make
sure that your tray tables are in the upright and locked
position, and please return your seat backs to their full, upright
position. Now brace yourselves: We’re headed for some
turbulent times!

Not that the past five years weren’t demonstrably nuts. They
were. But they were nuts in a generally recognizable way.
Never mind all of that easy-to-come-by venture capital and the
ATM approach to IPO cash. What really matters is how the
past five years challenged us all to rip off our neckties, shed
our standard-issue business suits, and, most important, lose
our Model T-type business thinking.

But that was the past five years. For the next five years, we’re
going to go from nuts to flat-out freakin’ crazy. For the next five
years, it’s business on a wartime footing — a high-stakes,
high-risk, high-profile event that is filled with uncertainty and
ambiguity. And clear-cut performance outcomes matter more
than ever before. You can still invent your own career, be your
own brand, and promote your own project — you just gotta
sprint and deliver.

Think of pre-1990 as the Age of Sucking Up to the Hierarchy.
The Age of the Promise ‘Em Everything Pitch lasted from 1995
to 2000. The next five years will be the Age of No-Bull
Performance. Which means that we’re going to see
leadership emerge as the most important element of
business — the attribute that is highest in demand and
shortest in supply. And that means that over the next five
years, we’re going to have to reckon with a new, unorthodox, untested, maybe just plain
freaked-out list of leadership qualities: 50 ways of being a leader in freaked-out times.

1. Leaders on snorting steeds ( the visionary greats! ) are important. But great
managers are the bedrock of great organizations. LEADERSHIP became sooooo
coooool in the 1990s. Crank out THE VISION. Harangue the troops. Stand tall in the
saddle. Management? That was for wusses, wimps, and dead-enders.

Well, I aim to amend all of that. Vision is dandy, but sustainable company excellence
comes from a huge stable of able managers. If you don’t believe me, then go read First,
Break All the Rules: What the World’s Greatest Managers Do Differently ( Simon &
Schuster, 1999 ), by Gallup execs Marcus Buckingham and Curt Coffman. Here’s a
boiled-down version of what they found: Great managers are an organization’s glue.
They create and hold together the scores of folks who power high-performing

Stop being conned by the old mantra that says, "Leaders are cool, managers are
dweebs." Instead, follow the Peters Principle: Leaders are cool. Managers are cool too!

2. But then again, there are times when this cult-of-personality stuff actually works!
Okay, here goes the zig-zag, paradoxical path of leadership in freaked-out times. It’s
true that there are times of genuine corporate peril when no one other than a
larger-than-life visionary leader can get the job done.

As far as I’m concerned, the first business leader who was able to establish a cult of
personality around his tenure was Lee Iacocca. When he took over as Chrysler’s
chairman and CEO in 1978, that company was on its deathbed. Chrysler turned to him
the way the country turns to charismatic leaders in times of war — which is exactly how
Iacocca characterized Chrysler’s competitive situation. The Japanese, Iacocca said,
were eating our lunch, and he was going to be the wartime leader to rally the troops.
The point is, there are times when you really do need to turn to a leader who offers a
broad, popular, galvanizing vision — someone who can symbolize a new approach to

3. Leadership is confusing as hell. If we’re going to make any headway in figuring out
the new rules of leadership, we might as well say it up front: There is no one-size-fits-all
approach to leadership. Leadership mantra #1: It all depends. Years ago, Yale
professor of organization and management and professor of psychology Victor Vroom
developed a model that was later adapted and popularized by Ken Blanchard. Their
point: We need to think about situational leadership — the right person, the right style,
for the right situation.

I saw it at McKinsey & Co. when I went to work there. The firm had gotten offtrack
operationally, so the partners elected Alonzo McDonald to be the managing partner.
They didn’t do this because they liked him ( he wasn’t the cuddly sort ), but because he
was the right guy to fix what was broken. McDonald did precisely what the partners
wanted him to do but were unwilling to do themselves: He busted the weak performers,
tightened up the control systems, and put the firm back on profitable ground. After which
the partners said, "Enough!" — and booted him straight to the White House to be
assistant to president Jimmy Carter and director of the White House staff. Motto: The
situation rules. Leader for all seasons? In your dreams!

4. When it comes to talent, leadership doesn’t income-average. It’s a favorite
one-liner these days: There is no "I" in team. What crap! Is there anyone who really
thinks that Phil Jackson won six NBA championships with the Chicago Bulls by
averaging Michael Jordan’s talent with that of the rest of the team? Yes, teamwork is
important. No, teamwork doesn’t mean bringing everyone with exceptional talent down
to the level of the lowest common denominator.

Bottom line: Stellar teams are invariably made up of quirky individuals who typically rub
each other raw, but they figure out — with the spiritual help of a gifted leader ( such as
Phil Jackson at Chicago or Los Angeles ) — how to be their peculiar selves and how to
win championships as a team. At the same time.

5. Leaders love the mess. One leader who deserves to be celebrated? That fabulous
third-grade teacher your Charlie has — the one who sees each of her 23 charges as
unique-quirky souls who are in totally different places on their developmental paths
toward becoming their cool-peculiar selves. The third-grade teacher whom you should
avoid at all costs? The one who’s got everything under control, with all of the kids sitting
at their desks, completely unable to express themselves. There’s no mess — and no
creativity, no energy, no inspired leadership. You want leadership? Go find a fabulous
third-grade teacher, and watch how he "plays" the classroom.

6. The leader is rarely — possibly never? — the best performer. I once read that the
three greatest psychological transitions an adult human being goes through are
marriage, parenthood, and her first supervisory job. In each of these situations, people
learn to live and to succeed primarily through the success of others. Which is why there
is no more important decision that a company makes than the selection of its first-line

Who are those people? Take a look at the former players from the world of sports who
become the best coaches and managers. Last summer, Tommy Lasorda coached the
U.S. Olympic baseball team to a gold medal, finally defeating the Cubans. In his career
with the Los Angeles Dodgers, Tommy L. was a terrific manager. His own career as a
player? It lasted for three at bats.

The best leader is rarely the best pitcher or catcher. The best leader is just what’s
advertised: the best leader. Leaders get their kicks from orchestrating the work of
others — not from doing it themselves.

7. Leaders deliver. If you’re aiming to be a real leader during the next five years, then
you need to mimic the pizza man: You’d better deliver! For the past five years, ideas and
cool have counted ( which was important ). What counts now? Performance. Results.

8. Leaders create their own ( peculiar? ) destinies. During the next five years, there
won’t be room for paper pushers. Only people who make personal determinations to be
leaders will survive — and that holds true at all levels of all organizations ( including
entry level ).

Surprisingly, we’ve seen this phenomenon take place most often where most people
least expect to find it: in the military. First, war is the ultimate improv venture. The most
improvisational, least hierarchical situation that I’ve ever been in was my 16-month stint
in Vietnam. But second, real-life experience in the Army or in the Navy teaches you that
you must have leaders at every level. So too in today’s corporate wars. In this new world
order, the real battle starts when the computer gets knocked out, the captain gets killed,
the lieutenant is gravely wounded, the sergeant is hesitant, and suddenly the
18-year-old Iowa farmhand finds himself leading a platoon into combat. And the life and
death of the company or the team or the project hangs in the balance. That’s leadership
at all levels, which boot camp teaches a lot better than business school.

9. Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war,
you need to have both toilet paper and bullets at the right place at the right time. In other
words, you must win through superior logistics. Go back to the Gulf War. After that war
ended, the media stories focused on the strategy that was devised by Colin Powell and
executed by Norman Schwartzkopf. For my money, the guy who won the Gulf War was
Gus Pagonis, the genius who managed all of the logistics.

It doesn’t matter how brilliant your vision and strategy are if you can’t get the soldiers,
the weapons, the vehicles, the gasoline, the chow — the boots, for God’s sake! — to the
right people, at the right place, at the right time. ( Right now, and a
hundred of its dotkin are learning — or failing to learn — the Gus Pagonis lesson. )

10. Leaders understand the ultimate power of relationships. Here’s a mind-blowing
proposition: War — or business on a wartime footing — is fundamentally a woman’s
game! Why? Because when everything’s on the line, what really matters are the
relationships that leaders have created with their people. I recall a Douglas MacArthur
biographer who claimed that the one piece of advice that MacArthur most valued ( which
was passed on to him by one of his military forbearers ) was "Never give an order that
can’t be obeyed." But women already know that. They tend to understand the primacy of
massive IIR ( investment in relationships ), which is one reason why the premier
untapped leadership talent in the world today rests with women!

11. Leaders multitask. Which element is in the shortest supply today — and tomorrow
and tomorrow? Time. The future belongs to the leader who can juggle a dozen
conundrums at once. And who is he? I mean she? I just glanced at a lovely book called
Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men ( Avon
Books, 1994 ), by Nicki Joy and Susan Kane-Benson. Take this quick quiz, the authors
urge: Who manages more things at once? Who usually takes care of the details? Who
finds it easier to meet new people? Who asks more questions in a conversation? Who
is a better listener? Who encourages harmony and agreement? Who works with a
longer to-do list? Who’s better at keeping in touch with others? Now that’s what I call
multitasking! And again: Let’s hear it for women leaders!

12. Leaders groove on ambiguity. Message 2001: Wall Street is nuttier than a fruitcake!
All of that stuff they teach us in Economics 101 about rational expectations? In the past
year, we’ve seen those "rational" boys and girls of Wall Street fall in and out of love with
whole sectors of the economy the way teenagers with overactive hormones swoon and
dive over movie stars. But when Wall Streeters do it, real leaders in real companies feel
real effects.

The next five years are going to be an economic roller-coaster ride. That means that
business leaders are going to be challenged repeatedly not just to make fact-based
decisions, but also to make some sense out of all of the conflicting and hard-to-detect
signals that come through the fog and the noise. Leaders are the ones who can handle
gobs and gobs of ambiguity.

13. Leaders wire the joint. The good-old-boy’s network provided a direct way of
operating: I’m a vice president, you’re a vice president. I want your order, I call you up, I
take you out for a drink or a game of golf, and, man to man, I get your order.

It doesn’t work like that anymore — not when power is diffuse, alliances are ever
changing, and decision-making channels are fluid, indirect, and muddy. The game
today: Soft-wire the whole joint. The way to make the sale today — or to have influence
on any high-impact decision — is to build, nurture, and mobilize a vast network of key
influencers at every level and in every function of the operation.

14. Leadership is an improvisational art. The game — hey, the basic rule book — keeps
changing. Competition keeps changing. So leaders need to change, to keep
reinventing themselves. Leaders have to be ready to adapt, to move, to forget yesterday,
to forgive, and to structure new roles and new relationships for themselves, their teams,
and their ever-shifting portfolio of partners.

15. Leaders trust their guts. "Intuition" is one of those good words that has gotten a
bad rap. For some reason, intuition has become a "soft" notion. Garbage! Intuition is
the new physics. It’s an Einsteinian, seven-sense, practical way to make tough
decisions. Bottom line, circa 2001 to 2010: The crazier the times are, the more
important it is for leaders to develop and to trust their intuition.

16. Leaders trust trust. My longtime business partner Jim Kouzes and his colleague
Barry Posner nailed it with a one-word title to their recent book: Credibility ( How
Leaders Gain and Lose it, Why People Demand It, Jossey Bass Publishers, 1993 ). In a
world gone nuts, we cry out for something or someone to rely on. To trust. The fearless
leader may ( make that, had better ) change his or her mind with the times. But as a
subordinate, I trust a leader who shows up, makes the tough calls, takes the heat,
sleeps well amidst the furor, and then aggressively chomps into the next task in the
morning with visible vitality.

17. Leaders are natural empowerment freaks. There are two ways to look at Jack
Welch’s legacy as a leader. The first is to say that he has created more value for his
shareholders than any other comparable modern-day business leader. Which he has.
He has also created more leaders than any comparable modern-day business leader.

When we think of Welch, we do not ordinarily think vision. ( What is GE’s vision? I
haven’t a clue! "We bring good things to life" ain’t it. ) We do think rigorous performance
standards, empowerment ( "WorkOut" in GE-speak ), leadership, and talent
development. Jack Welch, it turns out, is a great manager ( see rule #1 ).

18. Leaders are good at forgetting. Peter Senge’s brilliant insight 10 years ago was
that companies need to be learning organizations. My campaign 2001: Companies
need to be forgetting organizations. Enron Corp., which has repeatedly been tagged as
the nation’s most innovative corporation, is exhibit A as a world-class forgetting
organization. It’s not wedded to what it did yesterday. Enron chiefs Kenneth Lay and Jeff
Skilling have figured out how to operate like a band of pirates. Got an idea? Don’t dally.
Go for it while it’s an original! Doesn’t work? Try something else. If that doesn’t work,

19. Leaders bring in different dudes. This is a corollary to forgetting. Many leaders are
preoccupied with creating high-performance organizations. But to that, I say: Crazy
times demand high-standard-deviation organizations! This isn’t just weirdness for the
sake of weirdness. This is weirdness for the sake of variety.

Winning leaders know that their organizations need to refresh the gene pool. That
happens when leaders forget old practices and open up their minds to new ones. That
also happens — and more effectively — when leaders bring in new people and new
partners with new ideas. As a leader, do with your people what Cisco has done so
effectively with technology: Acquire a new line of thinking by acquiring a new group of

20. Leaders make mistakes — and make no bones about it. Nobody — repeat, nobody
— gets it right the first time. Most of us don’t get it right the second, third, or fourth time
either. Winston Churchill said it best: "Success is the ability to go from failure to failure
without losing your enthusiasm." Churchill blew one assignment after another — until
he came up against the big one and saved the world.

As times get crazier, you’re going to see more — and dumber — mistakes. When you
make mistakes, you need to recognize them quickly, deal with them quickly, move on
quickly — and make cooler mistakes tomorrow.

21. Leaders love to work with other leaders. Nortel CEO, president, and VC John Roth
says, "Our strategies must be tied to leading-edge customers on the attack. If we focus
on the defensive customers, we will also become defensive." Amen. ( No: AMEN! )
Leaders are known by the company they keep. If you work with people who are cool,
pioneering leaders who have customers who are cool, pioneering leaders who source
from suppliers who are cool, pioneering leaders — then you’ll stay on the leading edge
for the next five years. Laggards work with laggards. Leaders work with leaders. It really
is that simple.

22. Leaders can laugh. Another corollary to the art of leadership and making mistakes:
No one’s infallible ( except for the Pope ). In order to survive in these wild times, you’re
going to make a total fool of yourself with incredible regularity. If you can’t laugh about it,
then you are doomed. Take it from me. ( And if you are a humorless bastard, please do
me a favor: Don’t immediately march over to your VP of human resources and order, "Ve
vill haff humor! Bring me ze funny people!" But do remember the madness of the times.
Humor is the best tool you’ve got to keep your team from going mad. No bull! )

23. Leaders set design specs. You can’t be a leader over the next five years and not be
totally into design. Design specs are the double-helix DNA that sets the tone of the
culture and establishes the operating ideas that embody the company. They are your
distinguishing characteristics, your brand’s brand. If you don’t already know how, learn
how to speak design. Apple CEO Steve Jobs calls design "soul." I say: Design specs =
soul operating system.

24. Leaders also know when to challenge design specs. Here comes another bloody
brain flip: In zany times, design specs ( corporate character ) must be open to constant
reevaluation. What worked during the past five years may or may not work for the next
five years.

The classic example we should all watch: What will Jeffrey Immelt do when he takes
over "the house that Jack built" at GE? Want to know what kind of leader Immelt will turn
out to be? The clearest signal will come from how he handles GE’s design specs. In
this Age of Madness, nothing is holy. Even at GE.

25. Leaders have taste. It’s a big part of the often-subtle topic of design. There is such
a thing as good taste. Maybe a better word is "grace." I love this quote from designer
Celeste Cooper: "My favorite word is ‘grace’ — whether it’s amazing grace, saving grace,
grace under fire, Grace Kelly. How we live contributes to beauty — whether it’s how we
treat other people or the environment." Leaders who would change our lives don’t shy
away from words like grace and beauty and taste.

26. Leaders don’t create followers, they create more leaders. Too many
old-fashioned leaders measure their influence by the number of followers that they can
claim. But the greatest leaders are those who don’t look for followers. Think of Martin
Luther King Jr., Mohandas Gandhi, or Nelson Mandela. They were looking for more
leaders in order to empower others to find and create their own destinies.

27. Leaders love rainbows — for totally pragmatic reasons. Another good word gone
bad: "diversity." The case for diversity during the past 20 years has been that it was the
"right thing to do." Well, in no-bull times, diversity isn’t a good thing, it’s an essential
thing. It’s a survival thing. The case for diversity is the case against homogeneity: When
the world is undergoing sudden, unpredictable, dire change, you need to have a diverse
gene pool. You need to have multiple points of view. In a heterogeneous time,
homogeneity sucks!

28. Leaders don’t fall prey to their own success. There are a lot of people who have
made it really, really big over the past five years. Some of them actually think that they’re
responsible for their success, if you can imagine that. But in crazy times, leaders don’t
believe in their own press clippings. And they never, ever let their organizations get
complacent! Read The Paradox of Success: When Winning at Work Means Losing at
Life: A Book of Renewal for Leaders ( G.P. Putnam’s Sons, 1993 ), by John O’Neil. He
talks about the good qualities that breed monsters. The first one on the list: Confidence
breeds a sense of infallibility. Again: Amen.

29. Leaders never get caught fighting the last war. It’s the age-old problem with
bemedalled generals: They’re always preparing to fight the last war. The lesson,
embedded in history, applies to business. What business are you in? The only answer
that makes sense today is, God alone knows! Did you win the war during the past five
years? Were you an early adopter of Internet ways? Good for you! The only problem is
that the Internet is still in diapers. The old giants are awakening to its potential. What’s
your next totally new act?

30. But leaders have to deliver, so they worry about throwing the baby out with the
bathwater. Did I mention that these are paradoxical times? Well, they are. So here’s the
flip side to the other side: You must execute consistently, while fighting consistency.
Years ago, in Liberation Management: Necessary Organization for the Nanosecond
Nineties ( A. A. Knopf, 1992 ), I called it the "ultimate leadership paradox." To be
"excellent" ( to deliver profits, provide quality, and satisfy customers ), you must be
consistent and build a stellar infrastructure-delivery capability. But the
single-mindedness that allows you to hit earnings targets and quality goals is a
disguised set of blinders that makes you vulnerable to new, oddball threats (
consistency = focus = blinders ). Love the bathwater! Throw the bathwater out! Go

31. Leaders honor the assassins in their own organizations. There’s only one reason
why any human being ever makes it into the history books: because he or she
remorselessly overthrew the conventional wisdom. Those are leaders. But truly great
leaders, the ones who aim to leave a legacy, go to the next level. They consistently seek
out and honor the people in their own organizations who want to overthrow their
conventional wisdom. Great leaders honor the people who want to depose them, the
assassins in their midst. Real leaders, repeat after me: All hail Brutus!

32. Leaders love technology. I mean love! L-O-V-E. Here’s the equation for the next five
years: Technology = architect of change. If you don’t love ( and I don’t mean like or
tolerate ) the technology, it will change you and your company, but you will be the
unwitting victim, not the partner of change. Look, you don’t have to be a technologist. But
you must embrace technology, care for it. It is your friend, your lover

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