Transformative Leadership Paper

Published by Soundview Executive Book Summaries, P.O. Box 1053, Concordville, PA 19331 USA
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Blanchard on Leadership and Creating High
Performing Organizations

LEADING AT A
HIGHER LEVEL
THE SUMMARY IN BRIEF

Management expert Ken Blanchard, co-author of The One Minute
Manager, and his colleagues at The Ken Blanchard Companies have spent
more than 25 years helping good leaders and organizations become great
and stay great. Now, for the first time, they’ve brought together everything
they’ve learned about outstanding leadership. In this summary, they show
managers and leaders how to go beyond the short term and zero in on the
right target and vision. They also describe how companies can empower
people and unleash their incredible potential.

A key aspect of Blanchard’s philosophy involves treating customers
right. This summary explains his three secrets for learning how to accom-
plish this and turn customers into “raving fans.” Other skill sets that are
detailed include the three keys to empowerment, the three skills of a situa-
tional leader and the three skills of a self leader.

Experts from The Ken Blanchard Companies who contributed to the
lessons presented in this summary include founding associates Marjorie
Blanchard, Don Carew, Eunice Parisi-Carew, Fred Finch, Laurence
Hawkins, Drea Zigarmi and Pat Zigarmi. Also contributing were consulting
partners Alan Randolph, Jesse Stoner, Susan Fowler, Fay Kandarian, Judd
Hoekstra and Scott Blanchard. Together they present more than 25 years of
breakthrough leadership insights.

This summary of Leading at a Higher Level will show you:
✓ How to ground your leadership in humility.
✓ Ways to focus on the greater good of people and the organization.
✓ Why it is important to have an engaged work force of self leaders.
✓ How to go beyond the short term and zero in on the right target

and vision.
✓ Ways to deliver legendary, maniacal customer service and earn

raving fans.
✓ How to determine your leadership point of view.

Concentrated Knowledge™ for the Busy Executive • www.summary.com Vol. 29, No. 3 (3 parts), Part 1 • Order # 29-06

CONTENTS
What Is Leadership?
Page 2

Is Your Organization
High Performing?
Pages 2, 3

The Power of Vision
Page 3

Serving Customers
at a Higher Level
Pages 3, 4

Empowerment Is the Key
Page 4

Situational Leadership:
The Integrating Concept
Pages 4, 5

Self Leadership: The Power
Behind Empowerment
Pages 5, 6

Leading Change
Pages 7, 8

Servant Leadership
Page 8

Determining Your Leadership
Point of View
Page 8

By Ken Blanchard

F
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:

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E

A
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IP

®

What Is Leadership?
For years we defined leadership as an influence

process. A better definition of leadership is the capacity
to influence others by unleashing the power and poten-
tial of people and organizations for the greater good.

When the definition of leadership focuses on goal
accomplishment, one can think that leadership is only
about results. Yet accomplishment is not enough. The
key phrase in the second definition is “the greater good”
— what is best for all involved. Leadership should not
be done purely for personal gain or goal accomplish-
ment: It should have a much higher purpose than that.

When you are leading at a higher level, you have a
“both/and” philosophy. The development of people is of
equal importance to performance. As a result, the focus
in leading at a higher level is on long-term results and
human satisfaction. Leading at a higher level, therefore,
is a process. It can be defined as the process of achiev-
ing worthwhile results while acting with respect, care
and fairness for the well-being of all involved. When
that occurs, self-serving leadership is not possible. It’s
only when you realize that it’s not about you that you
begin to lead at a higher level. ■

Is Your Organization
High Performing?

Those who want to lead at a higher level need to
understand what a high performing organization looks
like and what is necessary to create one. They need to
aim for the right target.

The Right Target: The Triple Bottom Line
In high performing organizations, everyone’s energy is

focused on not just one bottom line, but three bottom lines
— being the provider of choice, the employer of choice,
and the investment of choice. The triple bottom line is the
right target and can make the difference between medioc-
rity and greatness. The leaders in high performing organi-
zations know that their bottom line depends on their cus-
tomer, their people and their investors.

1. Provider of Choice: To keep your customers
today, you can’t be content just to satisfy them; you
have to create raving fans. Raving fans are customers
who are so excited about the way you treat them that
they want to tell everyone about you.

2. Employer of Choice: Today’s workers seek oppor-
tunities where they feel like their contributions are valued
and rewarded.

3. Investment of Choice: All companies require
funding sources, through stock purchases, loans, grants
or contracts. To be willing to invest, people must believe
in the company’s viability and performance over time.

The HPO SCORES Model
Because of their flexibility, nimbleness and responsive

systems, high performing organizations (HPOs) remain
not only successful and respected today but are also
poised to succeed in the future. HPOs demonstrate
results consistently over time.

SCORES is an acronym that represents the six ele-
ments evident in every HPO. An HPO SCORE hits the
target consistently because it demonstrates strength in
each of these six elements:

S = Shared Information and Communication.
Information needed to make informed decisions must be
readily available to people and openly communicated.

LEADING AT A HIGHER LEVEL
By Ken Blanchard

— THE COMPLETE SUMMARY

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Soundview Executive Book Summaries®2

The author: Ken Blanchard is the author of The New
York Times best seller The One Minute Manager. He is
chief spiritual officer of The Ken Blanchard Companies,
an international management training and consulting firm
he co-founded in 1979. Blanchard has sold more than 18
million books.

Leading at a Higher Level by Ken Blanchard.
Copyright © 2007 by Blanchard Management
Corporation. Summarized by permission of Prentice
Hall, an imprint of Pearson Education. 359 pages.
$24.99. ISBN 0-13-144390-9.

Summary Copyright © 2007 by Soundview Executive
Book Summaries, www.summary.com,
1-800-SUMMARY, 1-610-558-9495.

(continued on page 3)

For additional information on the author,
go to: http://my.summary.com

PART ONE:SET YOUR SIGHTS ON
THE RIGHT TARGET AND VISION

Serving Customers at a
Higher Level

The second step in leading at a higher level is to treat
your customers right. While everybody seems to know
that, few organizations are creating raving fans —
devoted customers who want to brag about them.
Scoring With Your Customers

In high performing organizations, everything starts
and ends with the customer. This is a radical shift from
organizations whose business design put the customer at
the end of the chain. For example, at the renowned
Golden Door Spa, all systems are set up to wow the

customer. Everyone knows that his or her job is to
exceed expectations and to back up the key front-line
person at that moment.

In high performing organizations, management has
regular face-to-face contact with customers — not only
with devoted customers, but also with those who are
frustrated, angry or not using the organization’s prod-
ucts and services. Leaders are passionate about develop-
ing sophisticated knowledge of customers and sharing
the information broadly throughout the organization.
Decide, Discover and Deliver

There are three secrets to treating your customers
right and turning them into raving fans:

C = Compelling Vision. When everyone supports such
an organizational vision — including purpose, picture of
the future and values — it creates a deliberate, highly
focused culture that drives the desired business results.

O = Ongoing Learning. HPOs are constantly focus-
ing on improving capabilities through learning systems,
building knowledge capital and transferring learning
throughout the organization.

R = Relentless Focus on Customer Results. HPOs
understand who their customers are and measure their
results accordingly. Everyone passionately holds and
maintains the highest standards for quality and service
from their customers’ perspectives.

E = Energizing Systems and Structures. The sys-
tems, structures and processes in HPOs are aligned to
support the organization’s vision, strategic direction
and goals.

S = Shared Power and High Involvement. In HPOs,
power and decision making are shared and distributed
throughout the organization, not guarded at the top of
the hierarchy.

Leadership Is the Engine
If becoming a high performing organization is a desti-

nation, leadership is the engine. While the HPO
SCORES model describes the characteristics of a high
performing organization, leadership is what moves the
organization in that direction. ■

The Power of Vision
When leaders who are leading at a higher level under-

stand the role of the triple bottom line as the right target
— to be the provider of choice, employer of choice and
investment of choice — they are ready to focus every-

one’s energy on a compelling vision.
A compelling vision creates a strong culture in which

the energy of everyone in the organization is aligned.
This results in trust, customer satisfaction, an energized
and committed work force and profitability.

The Importance of Vision
Once a leader has clarified and shared the vision, he

or she can focus on serving and being responsive to the
needs of the people, understanding that the role of lead-
ership is to remove barriers and help people achieve the
vision. The greatest leaders mobilize others by coalesc-
ing people around a shared vision.

When Louis Gerstner Jr. took the helm of IBM in 1993
— amid turmoil and instability as the company’s annual
net losses reached a record $8 billion — he was quoted
as saying, “The last thing IBM needs is a vision.” In an
article in The New York Times two years later, Gerstner
conceded that IBM had lost the war for the desktop oper-
ating system, acknowledging that the acquisition of Lotus
signified that the company had failed to plan properly for
its future. He admitted that he and his management team
now “spent a lot of time thinking ahead.”

Once Gerstner understood the importance of vision,
an incredible turnaround occurred. He saw clearly that
the company’s source of strength would be in integrat-
ing solutions and resisted pressures to split the compa-
ny. In 1995, delivering the keynote address at the com-
puter industry trade show, Gerstner articulated IBM’s
new vision — that network computing would drive the
next phase of industry growth and would be the compa-
ny’s overarching strategy. That year, IBM began a series
of acquisitions that positioned services to become the
fastest-growing segment of the company, with growth at
more than 20 percent per year. This extraordinary turn-
around demonstrated that the most important thing IBM
needed was a vision — a shared vision. ■

Leading at a Higher Level — SUMMARY
Is Your Organization High Performing?
(continued from page 2)

3
(continued on page 4)

Soundview Executive Book Summaries®

PART TWO: TREAT YOUR CUSTOMERS RIGHT

Empowerment Is the Key
How do the best-run companies in the world beat out

the competition day in and day out? They treat their
customers right. They do that by having a work force
that is excited about their vision and motivated to serve
customers at a higher level. So how do you create this
motivated work force? The key is empowerment.

Empowerment means letting people bring their brains
to work and allowing them to use their knowledge,
experience and motivation to create a healthy triple bot-
tom line. Leaders of the best-run companies know that
empowering people creates positive results that are just
not possible when all the authority moves up the hierar-
chy and managers shoulder all the responsibility for
success.

Researcher Edward Lawler found that when people
are given more control and responsibility, their compa-
nies achieve a greater return on sales than companies
that do not involve their people. Scholar Thomas
Malone believes that empowerment is essential for com-
panies that hope to succeed in the new knowledge-based
economy.

The Three Keys to Empowerment
To guide the transition to a culture of empowerment,

leaders must use three keys:
1. Sharing Information. One of the best ways to

build a sense of trust and responsibility in people is by
sharing information. Giving team members the informa-
tion they need enables them to make good business
decisions. High performing organizations continually
look for ways to incorporate knowledge into new ways

of doing business. Michael Brown, former chief finan-
cial officer of Microsoft, says, “The only way to com-
pete today is make your intellectual capital obsolete
before anyone else does.”

2. Declaring the Boundaries. In a hierarchical cul-
ture, boundaries are really like barbed-wire fences. They
are designed to control people by keeping them in cer-
tain places and out of other places. In an empowered
culture, boundaries are more like rubber bands that can
expand to allow people to take on more responsibility as
they grow and develop.

3. Replacing the Old Hierarchy With Self-Directed
Individuals and Teams. As people learn to create
autonomy by using newly shared information and
boundaries, they must move away from dependence on
the hierarchy. Self-directed individuals and Next Level
teams — highly skilled, interactive groups with strong
self-managing skills — replace the clarity and support
of the hierarchy. ■

Situational Leadership:
The Integrating Concept

If empowerment is the key to treating people the right
way and motivating them to treat your customers right,
having a strategy to shift the emphasis from leader as
boss and evaluator to leader as partner and cheerleader
is imperative.

Is the direct report new and inexperienced about the
task at hand? Then more guidance and direction are
called for. Is the direct report experienced and skilled?

1. Decide. If you want to create raving fans, you don’t
just announce it. You have to plan for it. You have to
decide what you want to do. What kind of experience
do you want your customers to have as they interact
with every aspect of your organization? Understanding
what your customers really want when they come to
you helps you determine what you should offer them.

A good example of how this works is Domo Gas, a
full-service gasoline chain in Western Canada, co-
founded by Sheldon Bowles. Back in the 1970s, when
everybody was going to self-service gasoline stations,
Bowles knew that if people had a choice, they would
never go to a gas station.

But people have to get gas, and they want to get in
and out as quickly as possible. The customer service
vision that Bowles and his co-founders imagined was an

Indianapolis 500 pit stop. They dressed all their atten-
dants in red jumpsuits. When a customer drove into one
of Bowles’ stations, two or three people ran out of the
hut and raced toward the car. As quickly as possible,
they looked under the hood, cleaned the windshield and
pumped the gas.

2. Discover. After you decide what you want to have
happen, it’s important to discover any suggestions your
customers may have that will improve their experience
with your organization. What would make their experi-
ence with you better? Ask them!

3. Deliver +1 Percent. Now you have to figure out
how to get your people excited about delivering this
experience, plus a little bit more. The responsibility for
establishing a shared vision rests with the senior
leadership. ■

Leading at a Higher Level — SUMMARY

4 Soundview Executive Book Summaries®

Serving Customers at a Higher Level
(continued from page 3)

(continued on page 5)

PART THREE: TREAT YOUR PEOPLE RIGHT

For information on how Trader Joe’s exceeds
expectations, go to: http://my.summary.com

That person requires less hands-on supervision. All of
us are at different levels of development depending on
the task we are working on at a particular time. To bring
out the best in others, leadership must match the devel-
opment level of the person being led. Giving people too
much or too little direction has a negative impact on
people’s development.

Situational leadership is based on the belief that peo-
ple can and want to develop, and there is no best leader-
ship style to encourage that development. You should
tailor leadership style to the situation.

Leadership Style
There are four basic leadership styles in situational

leadership: directing, coaching, supporting and delegat-
ing. These correspond with the four basic development
levels: enthusiastic beginner, disillusioned learner, capa-
ble but cautious performer and self-reliant achiever.

Enthusiastic beginners need a directing style, disillu-
sioned learners need a coaching style, capable but cau-
tious performers need a supporting style and self-reliant
achievers need a delegating style.

Development level is not a global concept, but it’s
task-specific. Development level varies from goal to
goal or task to task. An individual can be at one level of
development on one goal or task and be at a different
level of development on another goal or task.

The Three Skills of a Situational Leader
To become effective as a situational leader, you must

master these three skills:
1. Diagnosis. You must determine the development

level of your direct report. The key is to look at compe-
tence and commitment.

2. Flexibility. When you are comfortably able to use a
variety of leadership styles, you have mastered the skill
of flexibility. As your direct reports move from one
development level to the next, your style should change
accordingly.

3. Partnering for Performance. Partnering opens up
communication between you and your direct reports and
increases the quality and frequency of your conversa-
tions. Leadership is not something you do to people, but
something you do with people. ■

Self Leadership: The Power
Behind Empowerment

Managers must learn to let go of command-and-con-
trol leadership styles, because soon they will have no

choice. In the 1980s, a manager typically supervised
five people — in other words, the span of control was
one manager to five direct reports. Today, companies
have more mean-and-lean organizational structures,
where spans of control have increased considerably.
Now it is common to find one manager for 25 to 75
direct reports. Add to that the emergence of virtual orga-
nizations — where managers are being asked to super-
vise people they seldom, if ever, meet face to face —
and we have an entirely different work landscape
emerging.

The truth is that most bosses today can no longer play
the traditional role of telling people what, when and
how to do everything. More than ever before, companies
today are relying on empowered individuals to get the
job done.

Creating an Engaged Work Force
People need to be trained in self leadership.

Organizations on the leading edge have learned that
developing self leaders is a powerful way to positively
impact the triple bottom line.

For example, Bandag Manufacturing experienced the
value of self leadership after a major equipment break-
down. Rather than laying off the affected work force,
the company opted to train them in leadership. A funny
thing happened. Direct reports began holding their man-
agers accountable and asking them to demonstrate their
leadership capabilities. They were asking managers for
direction and support and urging them to clarify goals
and expectations. Suddenly, managers were studying up
on rusty skills and working harder.

When the plant’s ramp-up time was compared to the
company’s other eight plants that had experienced simi-
lar breakdowns in the past, the California plant reached
pre-breakdown production levels faster than any in his-
tory. The manufacturer studied other measures, too, and
concluded that the determining factor in the plant’s suc-
cessful rebound was primarily the proactive behavior of
the workers, who were fully engaged and armed with
the skill of self leadership.

The Three Skills of a Self Leader
Self leaders must be actively developed by teaching

people skills and mental attitudes that foster empower-
ment. Here are the three skills of self leadership:

1. Challenge Assumed Constraints. An assumed
constraint is a belief, based on past experience, that
limits current and future experiences.

2. Celebrate Your Points of Power. The five points
of power are position power, personal power, task
power, knowledge power and relationship power. The
sole advantage of power is the ability to do more good.

Leading at a Higher Level — SUMMARY

5
(continued on page 6)

Soundview Executive Book Summaries®

Situational Leadership: The Integrating
Concept
(continued from page 4)

Getting feedback on your points of power can be an
enlightening experience. The best way to increase your
power base is to gather people around you who have
points of power you don’t have.

3. Collaborate for Success. Self leaders take the ini-
tiative to get the direction and support they need to
achieve their goals. The direct reports of self leaders
diagnose their own development levels on a particular
goal or task and take the initiative to get from their
managers the leadership style they need to succeed. ■

Partnering for Performance
At its best, leadership is a partnership that involves

mutual trust between two people who work together to
achieve common goals. When that occurs, both leader
and follower have an opportunity to influence each other.

Partnering for performance, the third skill of effective
situational leaders, provides a guide for creating such
side-by-side leadership relationships. It is a process for
increasing the quality and quantity of conversations
between managers and direct reports. These conversa-
tions not only help people perform better, but they also
help everyone involved feel better about themselves
and each other.

The best way to improve people’s job satisfaction is to
help them perform well. That requires a good formal
and informal performance management system.

An Effective Performance Management System
An effective performance management system has

three parts:
1. Performance Planning. After everyone is clear on

the organizational vision and direction, it’s during per-
formance planning that leaders agree with their direct
reports about the goals and objectives they should be
focusing on. Goal setting, diagnosis and matching are
part of performance planning.

2. Performance Coaching. This is where the pyramid
is inverted and the hierarchy is turned upside down on a
day-to-day basis. Now leaders do everything they can to
help direct reports be successful. At this stage, managers
work for their people, praising progress and redirecting
inappropriate performance.

3. Performance Review. This is where a manager and
direct report sit down and assess the direct report’s per-
formance over time. When progress-check meetings are
scheduled, open and honest discussions about the direct
report’s performance take place on an ongoing basis,
creating mutual understanding and agreement. ■

Situational Team Leadership
Teams can execute better and faster and change more

easily than traditional hierarchical structures. They have
the power to increase productivity and morale or destroy
it. When working effectively, a team can make better
decisions, solve more complex problems and do more to
enhance creativity and build skills than individuals
working alone. The team is the only unit that has the
flexibility and resources to respond quickly to changes
and new needs that have become commonplace.

Organizations can no longer depend on hierarchical
structures and a few peak performers to maintain a com-
petitive advantage. The demand now is for collaboration
and teamwork in all parts of the organization.

Not only are teams hard-core units of production, they
also provide a sense of worth, connection and meaning
to the people involved in them. A study of 12,000 male
Swedish workers over a 14-year period revealed that
workers who felt isolated and had little influence over
their jobs were 162 percent more likely to have a fatal
heart attack than were those who had a lot of influence
in decisions at work and who worked in teams. Data
like this — combined with the fact that teams can be far
more productive than individuals functioning alone —
provide a compelling argument for creating high-
involvement workplaces.

The Reality of Teams
A team is defined as two or more people who come

together for a common purpose and who are mutually
accountable for results. Some teams achieve outstanding
results no matter how difficult the objective. High per-
forming teams cross all walks of life and vary in size,
complexity and purpose. Although each outstanding
team is unique, all share certain characteristics.

Building highly effective teams, like building a great
organization, begins with a picture of what you are aim-
ing for — a target. ■

Leading at a Higher Level — SUMMARY

Soundview Executive Book Summaries®6

Self Leadership: The Power Behind
Empowerment
(continued from page 5)

The High Cost of a
Disengaged Work Force

According to a 2003 Gallup study, “actively disen-
gaged” people — workers who are fundamentally
disconnected from their jobs — are costing the U.S.
economy between $292 billion and $355 billion a
year. The Gallup survey found that 24.7 million work-
ers (17 percent) are actively disengaged. These
workers are absent from work 3.5 more days a year
than other workers, or 86.5 million days in all.
Statistics show an even less engaged work force
worldwide.

Organizational Leadership
Just as team leadership is more complicated than one-

on-one leadership, leading an entire organization is
more complicated than leading a single team.

Constant change is a way of life in organizations
today. How do managers and leaders cope with the bar-
rage of changes that confront them daily as they attempt
to keep their organizations adaptive and viable?

They must develop strategies to listen in on the con-
versations in the organization so that they can surface
and resolve people’s concerns with change. They have
to strategize hard to lead change in a way that leverages
everyone’s creativity and ultimate commitment to
working in an organization that’s resilient in the face
of change.

Directive Behavior for Organizational Change
Behaviors that provide support in leading organiza-

tions are primarily related to facilitating the change
process and inspiring everyone to work together. -in
and cooperation are increased when change leaders lis-
ten to and involve others at each step of the change
process. This means sharing information broadly across
the organization, asking for input, sponsoring pilots, cel-
ebrating small successes and recognizing people who
are changing. ■

Leading Change
There are eight change leadership strategies, as well

as their outcomes, that describe a process for leading
change that is dramatically different from how change is
introduced in most organizations.

Eight Change Leadership Strategies
Strategy 1: Expand Opportunities for Involvement

and Influence (Outcome: -In). This strategy must
be used consistently throughout the change process.
Once a leader has diagnosed people’s stages of concern,
the leader must learn to use the appropriate change
strategy and corresponding behaviors to address the spe-
cific concerns people have in each stage of organiza-
tional change.

Doing so significantly increases the probability of
implementing successful change because it expands
opportunities for involvement and influence.

Strategy 2: Explain the Business Case for Change
(Outcome: Compelling Case for Change). This strate-
gy addresses information concerns. When leaders pre-
sent and explain a …