Standoutinacrowd Next week I'm leading a 1 1/2 day conference on Change and Leadership . Today, I had lunch with one of the speakers who I am thankful will be able to participate.

Tony Palazzo is a very experienced director with a high-profile defense contractor whose products can mean the difference between life and death. Tony is also a Naval Academy grad and retired Navy pilot. His life has been filled with many opportunities to lead and to follow. He knows the importance of both.

But he surprised me when, during the conversation, he became passionate about a dichotomy that I've always thought was somewhat of an intellectual exercise:

The dichotomy of management vs. leadership.

His take isn't intellectual navel-gazing; it's a powerful thought grounded in a lifetime of experiences and observation.

Tony says that he sees  a lot of good managers out there--people who effectively run the day-to-day operations of their respective work groups.

He sees the issue as one of leadership. In his mind--and in his experience--leadership is demonstrated when someone stands up and says, "We can do this better. Here's how. Let's go!"

"Isn't that happening every day?" I asked.

"No," he responded emphatically, "and here's one huge reason. When engineering firms were run by engineers, leadership emerged because you could quickly evaluate the individual, the idea, and the opportunity. Manufacturing companies found leadership as operations people found new ways to make things run better. They stood up and said so, and people said 'Yeah, let's roll!'"

"What's changed?" seemed like a natural question.

His take: The gods of Finance are setting the rules for how business will be done. Shareholder value is now the end product. Standing up and taking the lead in your area of discipline is a risk that is not only not rewarded, it may get you into trouble if the "Finance Guy" doesn't like it--or doesn't understand it.

If this is so, it would help us understand a couple of things we see more and more:

1. Talented people leaving large organizations to start their own businesses

2. An ongoing plea for more risk and innovation

So I thought about it while driving home. If a company's primary customers are it's investors and not it's revenue-generators, only those with the largest stock positions--and those in the company closest to them--are seen as "valuable." That has implications for power, control, and financial rewards.

Is shareholder value just one more fad--or is my thinking on this just plain wrong?

What's your experience been?








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