Goldman and Sachs, a full-service global investment banking and securities firm, has recently been noted in Bloomberg Businessweek for being one of the top companies in leadership development. This is due in part to their recognition of this new concept of “managerial coaching”. This firm has been quoted as saying that “as soon as their people become good managers, they have to become good coaches.” This company believes that a good leader is not only good at giving feedback, but receiving it as well. This ensures that the chosen leader is helping individuals reach their full potential and can thus fully contribute to the company.

Goldman and Sachs emphasizes that the team is more important than the individual. It is not enough to just have one outstanding leader. That person must be able to train and teach others, to ensure the success of the next generation. It is within a company’s best interest to not only focus on present success but future success as well.

Authentic leaders are described as “those who are deeply aware of how they think and behave, and are perceived by others as being aware of their own and others’ values/moral perspectives, knowledge, and strengths; aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient, and of high moral character.” The authentic leader must possess a positive moral perspective, and when making decisions they draw upon reserves of moral capacity, resilience, and courage in addressing ethical issues.  Authentic leadership also requires heightened levels of self awareness. A true leader must be able to recognize their own abilities and understand their personal strengths and weaknesses. Self regulation is another important factor in authentic leadership. A leader must have the ability to exert self control and set internal standards. All of these factors are essential in a  successful leader, and key in creating a work culture and environment that allows all levels to function optimally.

We work with companies that are trying to move from a static-control culture to one that is dynamic-innovative.  This change is happening in many companies as their markets mature and as cost reductions get more and more difficult.  In this environment you need innovation leaders.  These leaders are not the creative/innovative people that come up with the ideas; they are the people that manage the innovation process from ideation to product launch.  They require both strategic understanding and tactical/operational focus.  It is an unusual position that cannot be filled with just anyone from marketing (which is what many companies do).

We have worked to develop a process that allows companies to identify and recruit the right people.  We also work with our clients to create individual development plans for each of their innovation leaders to support them as they drive the innovation process through the organization.

Already there are a number of firms that are looking at their business model.  The “of counsel” position is a recognition that the traditional transition from associate to partner does not work for everyone.  ”Of counsel” positions are filled by very capable lawyers, but who do not have the entrepreneurial skills to bring in their own business.  This way the firm can keep a very good resource that provide capability to the firm.  In the consulting business they call may name this position an “essential capability.”

The new economic outlook creates a much more competitive market place.  In both Law and Consulting there are now competitors everywhere making it harder for an associate who is in his 30s to build his client network than for the 60 year old partner that build their business in a different climate.  I am always amazed at the lack of development that firms offer their associates or consultants to develop the skills to be a entrepreneur and bring in business; it is often seen as a personality trait as opposed to a skill that can be taught and developed.

So what does this have to do with innovation?  Isn’t innovation about products?  As the market changes, firms need to change and creating an innovative culture will be critical to the future success of the firm.  An innovative culture will find better ways to interact with clients, develop the work product, manage finances and even manage their people.  The challenge is that both law firms and consulting companies are designed as independent little companies where tradition will stifle anyone with a new idea.  However very soon it will be “innovate or die!”

I had a very interesting meeting today with the 367 Project which is a new organization looking to develop ethical leadership.  I will be doing one of the modules on communication in March.

I sat in on one of the first modules of the year on empathy, which was led by the sociology professor Sam Richards, who gave a fascinating TED talk at Penn State.  The conversation with the undergraduate members of Project 367 ranged from being empathetic with people from other countries and cultures (Sam has a fascinating way of connecting Penn State students with students from the middle east countries) to how empathy can impact the students of daily lives.

This made me think about empathy within management and why it is important.  I spend a lot of time in “expert organizations” where people are promoted because of their expertise.  This happens a lot in consulting firms, law firms even IT groups.  The challenge for the new manager is that they need to oversee people in their department who are technically not as good as they are.  Often this leads to a lack of empathy for the team member as the new manager does not understand why the team member cannot do what the manager can do.

Fundamentally new managers need to follow the platinum rule when thinking about their team.  The golden rule is often seen as a key to inter-personal relationships – “treat others how you would want to be treated.”  However this lacks empathy.  The platinum rule states “treat others how they would want to be treated” and is the key for a new manager to help their team maximize their potential.