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An Event That Changed the World and Fostering Compliance Leadership – Part I

 This coming Saturday, June 28th, is the 100th anniversary of most probably the single most momentous event of the 20th century; the assassination of Archduke Ferdinand and his wife Sophie in Sarajevo, then located in the Austro-Hungarian Empire. I view it as the singular event of the prior century because it led directly to the following events: the First World War, the Second World War, the Russian Revolution, the fall of the Hapsburg, Romanov and Prussian monarchies, the Cold War and a host of other events. One can point to 1963 in Dallas and 9/11 as direct descendants of the actions of the Sarajevo assassins.

One of the best articles I have ever read on the assassination was in the March 22nd edition of the Financial Times (FT) in a piece by Simon Kuper, entitled ‘The crossroads of history”. Kuper returned to modern day Sarajevo “to try and understand his act in its local context – the context both of 1914 and 2104.” I think that Kuper did come to some understanding through his reporting, which I found to be first rate. The attack on the Archduke itself came about through a plethora of mis-steps, foolish decisions and idiotic mistakes that rival any modern day industrial catastrophe. Kuper quoted the author Rebecca West for the following, “Nobody worked to ensure the murder on either side as the people who were murdered.” As this assassination started Europe down a road that led to well over 20 million deaths, it is an appropriate start to many more posts I will have during the centenary of 1914.

Just as Gavrilo Princip changed the course of history, I recently read an article in the May edition of the Harvard Business Review (HBR) which I think could significantly modify how you, as a Chief Compliance Officer (CCO) or compliance practitioner, will think about getting employees to “apply their talent and energy to move organizations forward” in compliance and ethics. The article is entitled “Blue Ocean Leadership”. In this two-part series I will explain the authors view of the problem that “According to Gallup’s 2013 State of the American Workplace report, 50% of employees merely put their time in, while the remaining 20% act out their discontent in counterproductive ways, negatively influencing their coworkers, missing days on the job, and driving customers away through poor service. Gallup estimates that the 20% group alone costs the U.S. economy around half a trillion dollars each year.” The authors believe that “poor leadership is a key cause” of this problem. The authors posit that leadership is a “service that people in an organization “buy” or “don’t buy” and when employees come to value you as a leader, they “in effect buy your leadership.”

Today I will focus on how ‘Blue Ocean Leadership’ differs from conventional leadership and tomorrow I will review strategies of how to execute this type of leadership and explore its implications for the CCO or compliance practitioner.

Key Differences from Conventional Leadership Approaches

The authors point to three key differences between ‘Blue Ocean Leadership’ and traditional leadership approaches.

The first key difference is that ‘Blue Ocean Leadership’ “focuses on what acts and activities leaders need to undertake to boost their teams’ motivation and business results, not on who leaders need to be. This difference in emphasis is important. It is markedly easier to change people’s acts and activities than their values, qualities, and behavioral traits. Of course, altering a leader’s activities is not a complete solution, and having the right values, qualities, and behavioral traits matters. But activities are something that any individual can change, given the right feedback and guidance.”

The second under ‘Blue Ocean Leadership’ is to “connect closely to market realities”. This is accomplished by having “the people who face market realities are asked for their direct input on how their leaders hold them back and what those leaders could do to help them best serve customers and other key stakeholders. And when people are engaged in defining the leadership practices that will enable them to thrive, and those practices are connected to the market realities against which they need to perform, they’re highly motivated to create the best possible profile for leaders and to make the new solutions work.” This allows not only employee buy-in both also quicker and more efficient engagement of the implementation of a leaders program.

The third key difference is that ‘Blue Ocean Leadership’ distributes leadership across all levels of management. The authors quoted one senior executive who said, “The truth is that we, the top management, are not in the field to fully appreciate the middle and frontline actions. We need effective leaders at every level to maximize corporate performance.” However ‘Blue Ocean Leadership’ is more robustly “designed to be applied across the three distinct management levels: top, middle, and frontline. It calls for profiles for leaders that are tailored to the very different tasks, degrees of power, and environments you find at each level. Extending leadership capabilities deep into the front line unleashes the latent talent and drive of a critical mass of employees, and creating strong distributed leadership significantly enhances performance across the organization.”

The Four Steps of Blue Ocean Leadership

Most importantly the authors believe that you have to see your leadership for what it is and not what you wish it to be. If you do not have a “common understanding of where leadership stands and is falling short, a forceful case for change cannot be made.” The authors created a template that they called “Leadership Canvases” which are visual representations to show what leaders actually do, rather than what they think they do. The authors’ research showed that 20% to 40% of all actions taken by managers are of little value to the organization. This led to the “biggest “aha” for the subteams was that senior managers appeared to have scarcely any time to do the real job of top management—thinking, probing, identifying opportunities on the horizon, and gearing up the organization to capitalize on them.”

Based upon this initial finding, the authors began to explore alternative leadership profiles. Here you are required “to think beyond the bounds of the company and focus on effective leadership acts they’ve observed outside the organization, in particular those that could have a strong impact if adopted by internal leaders at their level. Here fresh ideas emerge about what leaders could be doing but aren’t. This is not, however, about benchmarking against corporate icons; employees’ personal experiences are more likely to produce insights. Most of us have come across people in our lives who have had a disproportionately positive influence on us. It might be a sports coach, a schoolteacher, a scoutmaster, a grandparent, or a former boss. Whoever those role models are, it’s important to get interviewees to detail which acts and activities they believe would add real value for them if undertaken by their current leaders.”

The next step begins to take what I call some real corporate courage. It requires that middle and frontline managers critique what senior management has come up with in step 2, developing alternative leadership profiles. Some of the more interesting changes were ‘Cut through the Crap’ in which “frontline leaders did not defer the vast majority of customer queries to middle management and spent less time jumping through procedural hoops. Their time was directed to training frontline personnel to deliver on company promises on the spot” and to resolve problems. Another was ‘Liberate, Coach and Empower’ where leaders “time and attention shifted from controlling to supporting employees.” Finally, there was ‘Delegate and Chart the Company’s Future’ where the front and middle line managers had more responsibility so “senior managers would be freed up to devote a significant portion of their time to thinking about the big picture—the changes in the industry and their implications for strategy and the organization. They would spend less time putting out fires.”

Blue Ocean Leadership’ challenges companies to allow its employees to “think about which acts and activities leaders should do less of because they hold people back, and which activities they should do more of because they inspire people to give their all.” Just as you begin to think through the changes wrought by one action in a small town, very long ago, which changed the 20th Century forever, you may wish to use these concepts to think about how your leadership can be made more effective.

In tomorrow’s post I will look at how the authors believe you can execute a ‘Blue Ocean Leadership’ change in your company.

 Visit the FCPA Compliance and Ethics Blog, hosted by Thomas Fox, for more commentary on FCPA compliance, indemnities and other forms of risk management for a worldwide energy practice, tax issues faced by multi-national US companies, insurance coverage issues and protection of trade secrets.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at

© Thomas R. Fox, 2014

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