PRACTICE INNOVATION INDEX Team Leadership

Before you can become a transformational leader, you need to know the challenge. When you challenge the status quo, what do you come up against is the comfort zone, which is the inertia that keeps people stuck where they are. To fight it, you need to understand it. First, remember that those who are comfortable are not growing. This is one of the reasons that adversity is so often the catalyst for change. We are forced to rise to the occasion by digging deeper than we thought we could and developing new skills and capabilities, we weren't sure we could master. Another thing you need to know about comfort zones is that they are not static and they can close in on you if you don't pushback. For example, let's say you break your arm and you need a cast. When the cast comes off six weeks later, do you think your arm will be bigger, smaller, or the same? It's smaller because when you don't use muscles for a period of time they atrophy, our life and comfort zones are the same. If we stay in a comfort zone for an extended period of time, it will start to inhibit our ability to do more. We need to actively push out on it and test it. When fighting the comfort zone, you need to encourage your people to pushback and get them comfortable with being uncomfortable in order to move to the next level.

In science, the laws of thermodynamics are foundational principles that not only explain the way energy, heat, and pressure exists now, but also, because these laws are constant, can predict the potential outcomes that will happen in different situations without the need for experimentation. At Invesco, we believe life, business and leadership work the same way, and that adhering to certain principles can help explain and predict success while violating them can help explain where we went wrong. Here are the top five principles we believe can help govern your success, failure and fulfillment. Number one, caring. Are you leading for your benefit or mine? Number two, energy. Without physiological energy, nothing happens. Number three, humor. Life is a challenge without a sense of humor, it will overwhelm you. Number four, optimism. Where most see problems, they see opportunities. Number five, passion. Talent and skills are ignited by passion. We believe that when you look back at your biggest achievements in life, you can tie them to some of these principles, and we believe failures come from when we violate these. Another foundational principle is understanding what you do and do not have control over. What we've learned is that the only things that you can control are what you do and what you think. Everything else in life, they fall under the broad umbrella of influence. For example, you can influence your clients, but you can't control them. You can influence your children, but you can't control them. You can influence your health, but you can't absolutely control it. How successfully you are able to influence people comes down to your mastery of the three core principles of leadership.

We believe the three core principles of transformational leaders to be credibility, congruence, and caring. Let's take a look at these one by one. Credibility. The first thing people ask about their leaders is do they know what they're talking about? If they believe you don't know what you're talking about, or if you fall back on answers, like, "'Cause I'm the boss." Well, that's the way we've always done it. You're gonna lose your credibility. To build it, we believe you need to study diligently and deeply. Balance and augment your informational reading and viewing with the breadth and depth that only books can provide. Challenge your assumptions. Remember what got you here won't necessarily get you there. Expand your comfort zone. Look for new and improved ways to do things and move from reacting to responding. It's important to take a pause, consider the situation and then provide a thoughtful response. But credibility is only one of the key principles. The next is congruence. If you're not practicing what you preach, people will take that as permission to ignore your guidance. However, we find that when what you say corresponds to what you do, people will not only listen, but they will seek out your insight and your counsel. And the third most critical principle for leaders is caring. If you're not trying to lead people only for your benefit and not for theirs, they'll know it. You must take a genuine interest in the personal and professional development of the people under your care. If you help them achieve success beyond their wildest imaginations, they'll likely follow you to the ends of the earth. And while this will lead to your success as well, your focus will be on each individual and their own unique journey. We have numerous worksheets in the toolkit that can help you better develop and identify the fundamental principles that will drive your success as a leader.

Too often when someone underperforms or fails, our industry's knee-jerk response is to think that, well, they aren't a good fit or they don't have the skills. While that might be true, it's likely not the best place to start. What you need to do is determine if the reason someone is underperforming is fixable or not. Consider that there are two reasons people fail or underperform, they can't do it, or they won't do it. So before you assume someone doesn't have the ability or can't do it, observe them performing the task. See if they have a talent for it. Consider how is their energy doing the task? How long does it take them to do it? How is their attitude during the task? Now it's possible that they have the talent, but haven't been taught the skills to do what needs to be done. So consider how you can train them to enhance their talent. It's also possible that they have the talent, but don't have the time to complete the task. Determine if they're spending their time where you find the most value in return and if they have the right priorities, well, consider moving any obstacles. If there are other activities that are getting in the way of them doing the task, work to figure out what can be delegated or discontinued so they can focus where you want them to. Now the other challenge you may be facing is that your colleague has the talent to do the task, but they just refuse to do it. Try to understand why they won't do it. Do they understand why it's important? Make sure you've explained why it matters and the potential impact to the team, themselves or to the clients if it isn't done. Is the compensation aligned? Does your current compensation, bonus and recognition structure support and reinforce the direction you're attempting to take your team and the individual performers within it? If the compensation is aligned, the next thing to consider is incremental consequences. Talking isn't enough. You need to implement meaningful, consistent and incremental consequences just like with your kids. If you've done all this and still are getting no results, it maybe your time to employ an exit strategy and consider replacing this person.

At Invesco, we believe that people don't have problems, they have patterns. Consider that with a tree, the branches would be the problems and the root system would be the patterns. You can't fix the health of the tree without addressing the roots. We've identified seven patterns that we consider the deadly sins of business. One, returning to the scene of the crime. This is when you keep going with the devil you know, even though you know that process that person or philosophy doesn't work. To solve this, you need to embrace and evolve. Like we've said before, get comfortable with being uncomfortable because change is how you grow. Number two, don't just manage your time, manage your energy. Becoming unfocused, listless and irritable most afternoons because you were too busy to have a healthy lunch or workout doesn't help you, your team or your clientele. There are four keys to effective energy management. A, get enough sleep, B, eat healthy, C, exercise, get up and move around from time to time, and last, oscillation. Three, trying to change people. Rather than trying to change people or complaining about or challenging them, try establishing reasonable parameters in the relationship that must be met to continue the relationship. Four, trying to please everyone. Now, this isn't necessarily bad as long as you're trying to please the right people. The people you want to please other than yourself should be those of high character and high performance. Five, choosing comfort. You know, too many of us choose comfort over growth. Many of us spend all day avoiding doing those hard things, the things that make us uncomfortable. Six, fixing your weakness. You know, rather than working on your weaknesses, we believe you should deploy your strength. Seven, using a structure that hinders you. Consider if the structure or environment supports or hinders you. For example, if you want to lose weight, would you fill your fridge with cookies, cakes and ice cream? Or would you fill it with fruits, vegetables and lean meat? You have to set up your environment to support the success you desire. Now, Invesco has many more tactics, ideas and thoughts around how you can break these patterns and achieve success.

The final consideration transformational leader should keep in mind is their Motivational Style. While there are three motivational styles that have varying pros and cons, we believe that ultimately there is only one that will get you to a successful result long-term and provide an environment that helps you create an engaged, fulfilled and successful team. The styles are Coercive, Expedient or Transformational. Now coercive is the, my way or the highway option. And while this may be the easiest option is likely the least effective, as people tend to revert once your back is turned. Expedient is the you scratch my back and I'll scratch yours approach, where you reward someone for doing something. However, over time, this can stop working. As people expect more and more rewards for the same work. Now what's important to remember is that you can't control people's actions, but you can influence them. That's where the transformational approach comes in. With this approach, you can help the person discover who they are capable of becoming. The motivation becomes internal, and that holds them to a higher standard. More than any external motivation will it takes more work, but it's worth it. Thank you for your time. I hope you found that informative. If you have any questions or for more information on this or other programs from Invesco Global Consulting, please reach out to your Senior Advisor Consultant. Thank you.