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Review: Rich Karlgaard’s The Soft Edge: Where Great Companies Find Lasting Success

soft edgeThis review first ran in the Dec. 8 edition of The Hamilton Spectator.

The Soft Edge: Where Great Companies Find Lasting Success

By Rich Karlgaard

Jossey-Bass

$34

You’ve stocked your senior executive team with the sharpest analytical minds that money can buy.

They’re masters at making the numbers and keeping the trains running on time.

But your dream team’s a bust and your organization’s in trouble if no one trusts them.

Trust is the force multiplier of all things good in your organization, says Rich Karlgaard, author of The Soft Edge and publisher of Forbes magazine.

Trust gets you engaged employees and loyal customers. Trust gives you a recruitment and retention advantage and lands you on top employer lists. Trust buys you grace, forgiveness and a second chance when something goes wrong. “Maybe most important, trust underpins innovation by facilitating learning and experimentation,” says Karlgaard.

When trust is lacking, look to the top of the org chart. “Trust isn’t based on what the company is doing; it’s based on what its leaders are doing,” says Karlgaard. “Trustworthy organizations and insincere leadership are incongruous. Engaging in moral behavior is one of the easiest ways for any leader to demonstrate trustworthiness, while also creating a trusting climate.”

Leaders build trust inside and outside of their organizations by demonstrating genuine concern for others.  They put your interests of ahead of self-interest and personal gain. “We tend to trust people we believe will care about our welfare.”

Trust is one of five pillars that make up the largely misunderstood, neglected and underfunded soft edge of business that’s essential to lasting success for any organization.

Yes, you need the right strategy. As FedEX founder Fred Smith has said, “you can have the best operations. You can be the most adept at whatever it is that you’re doing. But if you have a bad strategy, it’s all for naught.”

You also need to execute precisely on the hard edge of business, where it’s all about speed, cost, your supply chain, logistics and capital efficiency.

But to be great, you must also excel on the soft edge of business, with a focus on trust, smarts, teams, taste and story.

“Great, enduring organizations are masters at both the hard and soft edges,” says Karlgaard. “In this tough, global Great Reset economy, mastery of the oft-neglected soft edge will become as crucial as (or even more critical than) mastery of the hard edge.”

Karlgaard defines organizational smarts as grit, perseverance and hard work.  “Grit leads directly to being smarter and results in an ability to learn more and adapt faster.”

Teams deliver accountability, passion and effort. “When we work together, we make each other better.”  Smaller is mightier when it comes to high performing teams.  Jeff Bezos, founder of Amazon, has the two pizza rule.  Your team’s the right size if you can feed them with two pies.  “Work your way to the smallest possible number you think you need and then subtract one,” says Karlgaard about building teams.  “The minus one philosophy forces the remaining team members to be creative. That’s where you start. Lean and hungry.”

Taste is about more than smart design. “It’s a universal sensibility, an emotional engagement that appeals to the deepest part of ourselves. We see it in those magical products that not only show us at our best but also make us feel and perform even better.”

And story creates a shared sense of purpose and builds an organization’s brand. “A leader’s job is to articulate and help people cohere around a shared purpose that embraces the company’s past and outlines its future. Few vehicles serve to deliver your message as effectively as the art of storytelling.”

Karlgaard says we’re at a crossroads, with hard-edge people running the show. “Too many business leaders today, pressured by a tough economy, badgered by shareholders, find it tempting to neglect their employees’ and customers’ deeper values. Alienation and distrust are on the rise. We can and should do better in the way we run our companies. It will profit us in the long run if we do.”

So start by asking for the hard truth. Do the people you serve inside and outside your organization trust you?  If not, make trust-building job one in 2015.

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