John C. Bogle, founder of the Vanguard Mutual Fund Group, is one of the most successful and respected business leader's and investor's of all time. Period. Mr. Bogle has a new book out that is a must-read during today's economic climate. The title of the book is Enough: True Measures of Money, Business, and Life.
One chapter in the book titled Too Much Management, Not Enough Leadership has great relevance to readers of this blog. The focus of the chapter is how most businesses are overmanaged and underled, and the profound differences between leadership and management.
Mr. Bogle cites management guru Warren Bennis' key distinctions between management and leadership - some include:
- The manager administers, the leader innovates.
- The manager imitates, the leader originates.
- The manager relies on control, the leader inspires trust.
- The manager focuses on systems and structure, the leader focuses on people.
- The manager has a short term view, the leader has a long range perspective.
- The manager has their eye on the bottom line, the leader has his/her eye on the horizon.
Bogle mostly agrees with the distinction but believes the dichotomy is overdrawn (e.g., great leaders don't ignore the bottom line and great managers build trust).
Bogle then shares his ten rules for building a great organization - rules that apply to both managers and leaders. I wanted to share the rules with readers of this blog - they are right on the mark and particularly welcome given what's going on in business today. They include:
- Make Caring the Soul of the Organization
- Forget about Employees. Employees come to work at 9am, leave at 5pm, do what they are told, keep their mouth's shut and collect a paycheck. "Crew members' (as Vanguard refers to staff) are excited, motivated, committed, and caring people that work together on a worthwhile voyage.
- Set High Standards and Values - and Stick to Them.
- Talk the Talk - Repeat the Values Endlessly.
- Walk the Walk - Actions speak Louder than Words.
- Don't Over Manage. Bogle takes issue with the saying "if you can measure it manage it" calling it a hindrance in building great real-world organizations and saying "it is character, not numbers, that make the world go 'round".
- Recognize Individual Achievement. Vanguard was one of the first companies to create a formal "employee" recognition program. The point wasn't to make a select few rich but to recognize achievement.
- A Reminder - Loyalty is a Two Way Street. Says Bogle: "It is really incredible that it has taken most American companies so long to realize that it is simply not right to ask those who do the daily work to be loyal to the organization without making the same commitment, with the same fervor, that the corporation will be loyal to them in return.
- Lead and Manage for the Long Term. Bogle says "Once you decide whether you expect to be in business for a short time or a long time, most of the right decisions are easy.
- Press On, Regardless. Bogle illustrates this point by quoting Calvin Coolidge:
"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not;unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan "press on" has solved, and always will solve, the problems of the human race."As we witness the demise of so many organizations these days - small and large - consider this fact. Of the 2,000 companies that at one time or another made Fortune Magazine's annual 500 list since 1955, only 71 of the original list remain on the list today. Bogle cites economist Joseph Schumpeter who attributes this turnover to entrepreneurship, the "vital force that drives economic growth - the gale of creative destruction". However, my guess is that poor leadership is also a major factor.
Enough. Thanks Mr. Bogle.
Labels: book review, John Bogle, leadership