Gary Harpst leader of the month

National Leader of the Month for May 2008

Gary Harpst

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As an entrepreneur, Gary Harpst has successfully built businesses with his team. As a consultant, he has enabled other businesses to thrive. As an author, Gary has found a way to deliver his insights to the masses. For the remarkable accomplishments that his career has made possible, Gary Harpst is the National Leader of the Month for May 2008.

Favorite quote: Gary's paraphrase of the C.S. Lewis quote: the key to understanding man and the universe is we all agree on what’s right and wrong and none of us do it. Six Disciplines was started because of the idea that most business people know many of the things they should do, but they don’t do them. I was actually speaking at a conference one time..., and I asked the people how the conference was going for them. They said, “It’s great, but I probably won’t be doing anything about it two years from now.” I couldn’t get that out of my mind on the plane ride back, and the more I thought about it, the broader I thought that the issue was. C.S. Lewis would say that there is something about mankind: Whether it is fitness or business practices or relationships, we struggle doing the things we know we should do. That became a mission for Six Disciplines: let’s do what we can do to help small and midsize businesses to apply many of the things they know they ought to and just don’t.

Favorite book: That is [a difficult] question. I do like a lot of C. S Lewis’s material, including his Mere Christianity. [Lewis] is such a deep thinker with respect to laying foundational truth and integrating it into your life. From a business point of view I’ve always enjoyed the Peter Senge book, The Fifth Discipline: The art and practice of the learning organization. I’ve liked a lot of Al Reece's material. It’s older material, but he and his partner [Jack Trout] were instrumental to me in understanding marketing and positioning. Michael Porter has always been the best for me on strategic thinking.

Books recommended for aspiring leaders: For small businesses I like Michael Gerber’s material; his theme is wonderful in terms of getting an early leader to realize the different roles of leadership. A lot of John Maxwell's material has been really good on leadership thoughts. [Maxell] has so many different books in print that I couldn’t pick one, but his material is good.

Places in the world you most like to visit: I have really enjoyed New York and Broadway, and I’ve enjoyed London. I’ve only been to Paris once. I’ve not been anywhere in the Far East, but I’d really like to go to China, Singapore, and Australia.

Experiences vital to your development as a leader: My whole experience with starting a business (Solomon Software) in 1980 with my two partners. We committed to running that business with honesty and integrity to try to be true to our faith in the whole business. It was just a twenty-year wild ride. We happened to start right about ten or twelve months before IBM introduced the PC, and we were a software company. Over those twenty years we made about every mistake you can make in business and still managed to survive and even thrive. Ultimately, we sold the company to our competitor; 90 days later that company began negotiating with selling the whole thing to Microsoft. It was a special learning experience.

Brian Clark shares the following thoughts on the leadership of Gary Harpst: "The very concept of Six Disciplines demonstrates that Gary has the vision of a great leader – that’s the fun part. What truly sets him apart is the leadership he models to his team all day, everyday, in fighting through the seemingly endless challenges required to execute any great vision. In my experience, Gary Harpst is one of a kind."

Talk about evaluating a corporate mission and its goals: We do that as part of the methodology that we follow in helping businesses. We start with asking the owner’s leadership, "What’s important to this business?" That is the essence of strategy. I think it was Michael Porter who said something to the effect of, "The essence of strategy is deciding what not to do." Therefore, we ask our clients to answer [this] when it comes to vision or values: What is the purpose of this company from the perspective of our employees, and from our customers, and from our investors? When you ask that question from those three perspectives, you really are digging into the essence of why the organization exists. Lots of work is required to make sure that everybody is heard and you have a common vision...The key thing is to get everyone involved: not just one person’s point of view but really an open dialogue.

What about the notion of setting realistic yet challenging business goals across an entire organization. Could you talk a little bit about the challenge of doing that and how you go about getting that job done? We have learned a lot on that topic, and we’ve found that there’s a tendency for top leadership to set some top-down goals. [Top leadership personnel] need to give guidance to the organization, but then they need to view [that initial guidance] as sort of a draft. [Following the initial draft, the organization should] form teams below them. [Those teams] are comprised of the people who are going to be involved executing [the goals]; consequently, [those executors should] come up with the more detailed plans [for executing goals] right. We call that initiative development, and we have learned the hard way to not let the senior team go too far in crafting the goals before they involve those who have to deliver on it. This [practice] solves two problems. First, it verifies that the goals, themselves, are realistic. More importantly, it causes the people who have to work to deliver the goals to flesh through all the things that they need to do to meet the goals. The people get a better understanding of what the goals are all about, and they believe in them. [Without this methodology], either the people below the top leadership team don’t understand the goals or they don’t believe in them. How common is it for top leadership to be doing too much with that goal setting and visioning and not spreading that process out across the organization? I think it’s very common. There are two situations we see over and over and over. One is the organization that is very tightly led by just a handful of people, and [there is] not much effective communication or involvement below. The other is the organization that is running so hard that even the small senior team doesn’t have time to really sit and think about long term where they are trying to go. Those are the two different cases. In one, they have clear direction, but they don’t involve anybody else; therefore, the organization doesn’t execute very well getting there. In the other, everybody is running fast, and it is more reactive with no clear direction.

Could you talk a little bit about choosing the best business book for an industry and ways to implement lessons from the book? Do you have a process around that? [It is amazing how many people report having seen or read great ideas but not having done anything about those ideas.]

The first step is looking at books that your friends have read...to see those that have...stayed perpetually read. There must be people getting value out of those. To be honest with you, I’m not very optimistic that most organizations have the capability to act on what they read in those. I can give an example in our company: Solomon Software. When we were growing really rapidly, we were looking for a way to get control of the culture. The company had added so many people so fast that we felt like we were losing the character of the company. We went through the Seven Habits actual material. I personally trained everybody in the company on that material and became a facilitator, but two years later we really weren’t doing a lot with it. It just slips away. That’s actually what our new venture, Six Disciplines, is all about. I’m writing a new book called Execution Revolution that describes what we learned and what it takes to make those best practices stick. The ideas in the book are part of it, but they are only one of four things.

When you say "one of four things," what are the other three? The first of the four is what I call a methodology: some systematic way to work on the business. Every product you make--whether it’s a home or cookies or coffee--if you do it well, you have a repeatable methodology. The first thing that is needed is a blueprint to organize how you plan and set goals and measure the outcomes.

Second is some kind of a coaching relationship: an outside accountability relationship that needs to come from outside the company. If you go in and teach something and don’t have somebody to come back and visit you in a quarter and say, “Where are you at on this?” history (human nature) tells us that you won’t stick to it. It is kind of like a fitness program. Our program requires an ongoing coach forever with the client. If they don’t want to do that, we know they’re not serious.

The third element is what we call the execution system. It’s something that takes that methodology and helps every worker apply it everyday. Whether they’re working at home, in the office, or at the hotel, they can stay connected and know whether they’re on track for their goals or not. Today’s Internet Age has made that more practical. It really wasn’t practical years ago, but it is now, and it’s changing the game for small and midsize businesses.

The last element is what we call a learning community. Most of the practices we talk about have been proven in large businesses, but they’re very expensive and they are very hard to integrate into the organization. Big companies spend tens of millions of dollars putting all this stuff together. For small and midsize organizations, there needs to be some way to improve the economics. It needs to be practical for a smaller organization to learn best practices. With the Internet and the coaching network, you can share what you’ve learned from one client’s experiences to another. It’s like you end up having sort of a pooled R&D department for best practice development; that makes it economical.

Advice to aspiring leaders: [By far, the most important thing] is making sure you work with people you trust. There is just nothing that can overcome an environment or culture of not trusting the people around you. My advice, which I’ve given many, many times, is if you don’t trust those above you or beside you, find another place. It’s just not worth it. Of course that means that you, yourself, have to be trustworthy.

Who is your most admired leader? In my lifetime, Ronald Reagan has been a hero of mine. I know a lot of people have not thought of him as a great intellect, but it seems to me he had an internal compass that guided his decision making. What you saw was what you got, and I always appreciated that in leadership. In today’s politics, it’s difficult to know really what someone stands for. Therefore, in contemporary times, my most admired leader would be Ronald Reagan.

When you think about leadership highlights of your life, what would be some of the things that you would choose? One of the toughest times (and also the best time) was the time we had to do layoffs. I really had made a lot of mistakes as a leader and backed our Solomon Company into a situation where we couldn’t employ half of our workforce any longer. It was just heartrending to have to lay off people that you’ve worked with and helped build the company with. But in that whole experience was some of the greatest learning in my life. The "pulling together" that I saw with the team that remained and the determination to make the business work [was amazing]. In the next 10 years, the business grew 500 fold. Out of that tragedy came great success. It really gave me a conviction to never get in that situation again. I think it made me more mentally tough in this sense: As a manager, if you don't provide the discipline for your organization to be cost effective in doing what needs to be done, the marketplace will eventually do it for you. I resolved to never be a weak leader again [and neglect to] address the things that need to be addressed. That’s life; out of some of the toughest things [that you run up against], some of your deepest values are formed.

Is there a metaphor, a story or an analogy that you can offer about leadership in general? ...I married late in life, and I have a couple of teenagers who like playing a card game called Texas Hold 'em. I keep explaining to them that life itself is more interesting than any game of cards. In a game of cards, you are looking at your hand and seeing how good it is, and maybe you are betting some plastic chips or candy bars or something like that. Everyday in business life, it’s like that. You are looking at the hand you have, thinking about how to play that hand and determining what to keep and what to throw away. I just love life and the decisions that go along with life; you don’t always make [decisions] right, but they all matter and make life tremendously interesting. I never would have expected at this age when some people are retiring to have the energy and enthusiasm. I just can’t wait to get out everyday.

Traits most important in a leader: vision, honesty and passion

The vision is the first thing that I would look for. I remember reading in some ancient literature about Naphtali and a man called Issachar. The Old Testament, in fact, said that they understood the time and knew what to do about it. I think a leader really needs to be a student of the times and learn to know what to do about it.

Second, I think, is honesty. You just can’t be a leader without people trusting you, and you can’t be trusted if you can’t tell the truth. It’s more than just being truthful but that you have to be open as well. You can’t be covering things up or hiding things.

The third is passion. I forget who made this statement, but people go in the direction the leader is going rather than the direction [the leader] is saying. That passion [means that] you have to lead by example, and you have to really roll up your sleeves; otherwise, nobody else will be interested either.

How typical do you think those characteristics are in a lot of our leaders? I’ve been fortunate in my business life to work with small and midsize business organizations, and I think the honesty and passion is definitely there. I think sometimes leaders may not have the vision they need. It depends on the circumstances of the business. If you have somebody else on the staff [who is focusing on vision], or a [company] history of a parent who built the business, then being a caretaker [may work for a time]. In the long term, you need the vision.

What are some of the things that organizations do that either encourages, or conversely, stifles leaders? One is creating a culture of fear: fear of failure and fear of making mistakes. If someone reports to you and is afraid to make a mistake, he or she becomes…like my daughter in softball. She has not been hitting very well. Her fear causes her not to swing the bat very well, so it becomes self fulfilling. I think that’s a huge limiting [factor]. [A leader needs to be] encouraging people to learn from their mistakes. The organization will be a better and stronger organization if people learn together rather than being afraid to try.

What do you think are the best training programs out there for leaders and leadership? Our methodology is the best training program that I have seen. It wasn’t really designed to be a training program, but the way you train people is by showing them, helping them, coming alongside them, and letting them learn on the job. I’m not a huge fan of isolated training where all you do is go up and study. I much prefer the apprentice-master model where you are working alongside somebody and the nurturing and training are going on literally everyday.

Setting clear goals, helping people participate in defining what the goals are, and working to pursue the goals is one of the biggest training benefits that you can get…It reminds me of a golf coach I had. When he would give me lessons, he would say, “Now go practice what we just worked on,” and he would say, “if you go to practice and just hit balls and don’t have something to focus on, all you are doing is getting exercise. You are not practicing.”

That’s the way a goal is. If you give workers a clear goal, they are not always going to achieve that goal, but by focusing on it, they will learn faster. We are really big on the idea of clear goals and helping people work towards achieving them. To me, that is the way you grow leaders.

How has your leadership been challenged or tested, and how did you respond to that? I had another experience on the surface appear to be the opposite of the downsizing (referenced earlier). We had a tremendous success one time at Solomon Software where we won a major national award and got such publicity that our business doubled in about 90 days. On the surface, that looked really good, but it tested management unlike anything we ever went through. It took us probably almost a year to recover from being overwhelmed by having that much increase in a short period of time. Any of our processes and training of people on the phone broke down, and the quality got worse...

What does good leadership look like to you? It’s somebody that’s really involved in helping the people under them become successful. I’m one who likes to do a lot of things myself, and I have to constantly remind myself that if I do that, the organization can only do what I do. But if I learn to let go and hand things off and make people responsible, they grow into the responsibility. People are made to take responsibilities, but they can’t do it unless you give it to them. It’s a constant battle for me and for a lot of leaders. How do you let go? How do you let people fail? You know that’s what’s going to happen, but in the end you’ll have a stronger and better organization. A lot of leadership is pointing directions but not telling them how to get there.

It was late in the life of Solomon Software when we had concluded that the industry was consolidating, and we needed to either take it public or combine with another public company. We concluded that combining with another public company was the right thing to do, and we put together a transaction with Great Plains (who was our largest competitor in the U.S.). Great Plains was probably number one in market share and we were third or fourth. When we agreed to all the terms of the deal, it was a stock-based offering, based on their stock price.

We had really thought through who we were partnering with and why. We were confident that we were making the right decision and trusted the people who we were working with. Then, the day before the transaction was to be consummated, Great Plains missed their earnings for the first time in the history of the company, and their stock price dropped in half.

The CEO of Great Plains called and wondered whether we were going to go forward with the transaction. We had some advice from experts that said not to go forward. [Some suggested that we should] renegotiate. My partners and I just sat down and said, "How did we get to this decision [to sell the company]? Are these the right partners? If the value of the company and the relationship is there, then does an overnight change in stock price really change the facts?" We decided to go ahead, and we didn’t negotiate or do anything differently. Lo and behold, 90 days later Microsoft had approached the combined entity. By the time our six months was over and the lock up was over, the price of stock was higher than when we started. Many, many good things happened. Our team members got stock options loaded with a really low price because of the downturn in prices, and it ended up being one of the best things that could happen to our team members and our investors. In that story are the points I’ve been making all along: Think through your decisions, work with people you trust, and don’t be afraid to move forward.