2012 has shown us the best and worst of insightful, courageous leadership — notably seen in the surge of Samsung and Apple, led by Shin Jong-kyun and Tim Cook, respectively, and the struggles of Reed Hastings at Netflix and the multiple CEOs of Best Buy.

Gutsy, courageous leaders know that it is the tough but carefully analyzed decisions that can lead to success rather than mediocrity. So, who in 2012 deserved to be acknowledged as the most courageous, gutsy leaders — and who were the least? Naturally, we all have our candidates for both ends of the spectrum. Here are mine.

The winners:

  • Amazon. Jeff Bezos of Amazon had an outstanding year as a gutsy leader and the stock price movement reflects that — going from $179/share to nearly $251. Not only has Amazon become a leading retailer that is giving the box stores fits, it has constantly capitalized on inflection points with products/services such as the Kindle, its cloud services and the Kindle Fire.
  • ARM Holdings. You may not know this company, but if you have a smartphone, there is a 95% chance you are indirectly a customer of ARM. The core microprocessor in 95% of smartphones is from ARM. Warren East has been CEO since 2001 and spotted the emerging need for low-electric-consumption microprocessors. An early application was for small laptops, called webbooks or notebooks, that were the rage about five years ago. Since then, ARM has consistently gotten out in front of key trends such as smartphones and tablets, and today it is a key supplier to the leaders: Apple, Samsung, LG, Microsoft, etc. In 2012, ARM’s stock price went from $28 to nearly $38.

The losers:

  • J.C. Penney. Expectations ran high for J.C. Penney. New CEO Ron Johnson of Apple retail store fame took over in November 2011. He immediately decided he could turn around the retailer by using Apple-like approaches — cleaner, contemporary-looking stores and abandoning the traditional price-oriented merchandising rampant among low-end retailers. Specifically, he eliminated the notion of deep price cuts on key items to attract traffic, which has been a cornerstone of low-end general merchandise retailing. Sales have declined each quarter in 2012, and the stock price fell from $35 to $19.71. Johnson gets an A+ for quick action, but a final grade of F for not first objectively and carefully analyzing the situation before developing and implementing an appropriate plan. He naively did what worked for him at Apple (in a completely different industry).
  • Zynga. This online gamer started as an application on Facebook (and was Facebook’s No. 1 app). That success led Mark Pincus, the founder and CEO, to believe he could conquer the world, and Zynga began to also offer its games independent of Facebook. Zynga did an IPO in late 2011 at a price of $10/share, and by spring 2012, the stock reached $14.50. Today, it is trading in the $2.50 range, simply because Facebook tends to treat Zynga as a competitor rather than a partner. It appears Pincus was seduced by his quick success and had no plan to advance Zynga after it marched out from under Facebook’s umbrella.

The two key characteristics that separate the winners from the pack are as follows:

  1. Confront reality and develop a sound, demanding game plan. At any given time, the courageous leader is looking things over, seeing what is going well, what isn’t and what are the opportunities that are emerging or imminent. They first objectively and carefully analyze the situation and then aggressively develop a game plan that will clearly move the organization forward.
  2. Exploit inflection points. Significant shifts in technology or consumer habits and practices underpinning an industry are often referred to as inflection points. They are important because they can cause existing products and services to be rendered inferior, out of date, or old-fashioned. Gutsy leaders put a priority on getting ahead of inflection points, organizing to learn of the potential and then fully exploit, if appropriate. They don’t let the status quo protectors get in their way.

Gutsy, courageous leadership is hard, and it is instructive to step back occasionally and study examples, both positive and negative, that we can learn from. In 2013, keep the above two principles in mind as you tackle your responsibilities.

Bob Herbold is the former chief operating officer of Microsoft Corp. and the author of the recently released book “What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders.” More on the book and Herbold’s blog on leadership can be found at BobHerbold.com.

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One Response to “Gutsy leadership: Winners and losers in 2012”

  1. JC Penney has been such a huge disappointment. ZNGA doing well over the last few weeks.