Traits of a Transformational CEO

The word transformation has joined our everyday business jargon.  True transformation creates a sudden and significant advance, a noteworthy achievement that signals further progress. If we contrast this to a transaction – the transmission and processing of something – we start to discern a very large distinction between transformation and transaction. We also spy a large performance gap that only widens over time. Transformation focuses on “achieving what’s possible,” while transaction concentrates on “flawless execution of what is.”

Transformational leadership fosters quantum-leap achievement that rivals the supersonic Concorde slicing through the sound barrier. If you ever had the opportunity to fly the Concorde, you experienced a sudden and significant breakthrough at 768 miles per hour, when the aircraft broke through the sound barrier. This achievement makes Mach 2.2 – 1,690 mph – possible.  It’s similar to a transformational CEO who focuses on a breakthrough and builds on its success to produce a quantum leap of progress.

Consider the Case of Sony vs. Apple. Sony developed the first portable music device, the Sony Walkman. My dad used one 30 years ago. Sony also had the early idea for building a music library.  What Sony lacked was a transformational CEO who could achieve those breakthrough ideas.  Today Apple is king with the iPhone, iPad, iTouch and the music library, iTunes.

What happened? Apple went supersonic with a transformational CEO who turned visions into reality. Sony remained transactional and went conventional with mergers and acquisitions in contiguous spaces.

Or, contemplate Schlitz Brewing Company vs. Anheuser-Busch.  Schlitz became the world’s top beer in 1902 and remained No. 1 for half a century before losing that esteemed honor to Anheuser-Busch. In the 1930s, Schlitz introduced the “Steinie” glass bottle and the “cap sealed” can. It also pioneered advertising on radio with its “step up to quality and step up to Schlitz” campaign and “the beer that made Milwaukee famous.”  Around 2004 Anheuser-Busch owned a 50 share of the beer market and Schlitz couldn’t be found.

What explains this? August Busch proved to be a transformational CEO who innovated in branding, product and merchandising. He articulated a future in which Budweiser dominated the marketplace. Schlitz tried to go transactional and conventional by building profit through product cost-cutting and process re-engineering.

From these two examples, it’s clear how some companies squander a competitive advantage and are unable to translate an advantage into market dominance.  At other companies, market dominance emerges as a transformational CEO inspires possibility well beyond the current prevailing market situation. These leaders are able to mobilize and monetize ideas for the future; and they inspire and motivate their workforces to do the impossible.

Transformational CEOs break conventional wisdom and often achieve the impossible because they possess several key characteristics that set them apart.  These include:

  1. 1. Unbridled courage and determination
  2. 2. Superior quantum-leap thought process
  3. 3. Highly effective deployment of human and economic resources
  4. 4. Strong capability in mobilizing and motivating the work force
  5. 5. Relentless pursuit of high performance and continuous improvement

Courage and determination: They serve as the foundation to transformational leadership. Courage gives you the ability to stand apart and espouse a new approach. “The reasonable man adapts himself to the world,” noted playwright George Bernard Shaw wrote, “while the unreasonable man adapts the world to himself; therefore, all progress depends on the unreasonable man.”  It requires courage to stand alone and adapt the world to you; Steve Jobs and August Busch had that fortitude. They also retained an additional quality: relentless determination.

Quantum-leap thinking: Transformational leaders know where and how in the distant future to win the heads and hearts of consumers with superior product benefits and highly relevant user imagery. They also know how to build a game plan that will supersede competition and deliver the results they envision. These leaders make it appear easy to do. James Mapes inQuantum Leap Thinking: An Owners Guide to the Mind outlines 14 principles of such thinking.  While CEOs can achieve this level of thinking; perhaps it’s part of successful CEOs’ DNA.

Highly effective resource deployment: Not only can transformational CEOs transform brands, products and services, they can transform individuals and teams by effectively allocating economic and human resources. This deployment that creates a breakthrough that extends to a quantum leap and dominates a market requires thoughtful organization of people and highly efficient use of economic resources. Simply look at the power of Apple and Anheuser-Busch. They were masters at deploying resources and dominating the markets they served with extraordinary distribution, marketing, merchandising and people.

Ability to motivate and mobilize: Transformational CEOs inspire employees and customers. They understand how to motivate the troops as they forge unexplored territory. As a result, the “inspired employee” becomes a clear advantage. Moreover, the CEO can mobilize the troops in the way that best monetizes ideas. It is one thing to have an exceptional idea; it’s another to mobilize thousands to believe in the vision and to fight for advantage in the marketplace. The transformational CEO gets the employees to own the vision through an aligned envisioning process.

High performance and continuous improvement: These are critical requirement for the transformational CEO. Schlitz wasn’t a high-performance organization focused on benchmarking improvement against world-class standards. If it had been, it may still be a serious competitor today. Sony neither maintained high performance nor looked for continuous improvement around breakthrough innovation.  Consequently, it became unfocused, diversified into non-core businesses and lost relevance with consumers on what had made it successful, namely consumer products such as the Walkman and the Trinitron. Ironically, the next evolution for Apple is the smart TV. Apple conquered the Walkman and the music library and now has its sights on the TV.

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” — John Quincy Adams