What makes a great leader? Former Secretary of State Colin Powell described it in detail today for nearly 6,000 attendees at focus 13, LPL Financial's annual conference for financial advisors.

The retired U.S. general was appointed secretary of state by President George W. Bush and previously served as chairman of the Joint Chiefs of Staff for Presidents George H.W. Bush and Bill Clinton, as well as national security advisor for President Ronald Reagan. He told the crowd at the San Diego Convention Center that he began to understand leadership as a 21-year-old at Fort Benning, Ga, where he learned that it's the followers who get the job done.

"So for me, to be a successful leader, you always have to concentrate on putting the followers in the best possible environment and then empowering those followers," he said. "In order for them to have confidence in you, you have to have confidence in them and you trust each other."

A leader needs ambition and goals, but one also needs purpose. "But a purpose can also be at the lowest level of the organization," Powell said. "Every night when I left the State Department, somebody would come in and clean this beautiful suite of offices that I had. And before leaving, I would stop and say, 'How are you? How's it going? Did your boy finish high school? Ah, good. Thanks so much.' And the simple reason for that was to let this person know that I didn't see them simply as a cleaning lady or cleaning man. I didn't see them as a tool in our organization. You have a purpose! Your purpose is that tomorrow morning when people from all over the world come to this beautiful suite of offices, it shines. And if you didn't accomplish your purpose, I couldn't accomplish my purpose as secretary of state. We're all all in this together."

Powell said the best organizations are ones where the leaders have communicated to every single person what his or her purpose is in achieving the purpose of the organization. "I always wanted to make sure that my people knew that there was no such thing as an unimportant position or unimportant person in my organization," said Powell. "Every human being has value and is appreciated by the organization, all the way to the very top. Otherwise, you don't have a functioning organization."

Great leaders empower the people who work for them, said Powell, who proceeded to tell a story about when he worked as Reagan's national security advisor. Powell walked into the Oval Office and proceeded to describe the terrible problems he was having. He says he told Reagan, "State is arguing with Defense. Commerce is unhappy. I don't know what I am going to do!" But the President was paying no attention. "He was looking over my shoulder into the Rose Garden. I didn't have anything else to say. Suddenly, Mr. Reagan says, 'Colin, the squirrels just came and got the nuts that I put in the Rose Garden.'"

Powell thanked Reagan and left confused. "I went back to my office looking out over Lafayette Park, and it struck me. He crystallized it for me and I've practiced it ever since. What he was saying was, 'Colin, I really love you, but so far you're just talking about your problem. You jump when I have a problem, but until then I'm watching the squirrels in the Rose Garden.'"

"The message that I have communicated with this little story is that if you want to have a functioning organization, you've got to empower the people. He was saying that I hired you as my national security advisor to handle this kind of thing. You have the power to do it. And ever since then, I've always tried to find the best people I could to work for me. And I tried to clear the deck of all special assistants and other hangers on so that there was a direct line of authority between me and the empowered people. And that's what I'm saying. Empower the people. Show that you trust them and in return, they'll do impossible things for you."

Powell was quick to add that he didn't want the audience to think that Reagan was "getting loopy." He cited another example of a far different reaction from Reagan a few weeks later, when cabinet members marched in to the Oval Office.

"Colin, we have to see the President right away. The Japanese are buying everything!" Colin recalled they said in 1988. "The Japanese are buying everything! They bought  Rockefeller Center! They bought Pebble Beach! We've got to do something! Congress and the people are irate!"

The President was totally engaged, because this time he knew that the issue was his problem, not one for his national security advisor. "He listened to everything that they had to say. And when they were all through, the President just thought for awhile, and he looked back and said, 'Well, I'm glad they think about these as good investments.' That was the end of it. Nothing else to be said. What he was saying is, what's wrong with you guys? Somebody wanted to invest in America and we're going to get annoyed by it?"

"That's what makes a really great leader," Powell continued. "Somebody who does't get tied up in details of things that he hires other people to do for him. Somebody who is looking beyond the tactical. Someone who is sensing opportunity. Somebody who's measuring risk and trying to figure out how do I make something more efficient and more effective? How are demographics changing?"

Powell said those were great strengths of President Reagan and he's tried to emulate them throughout his career.

After you empower people, Powell said, it's important to recognize them. "Sometimes it's not with a promotion. Sometimes it's just an arm around the shoulder. 'Hey, I'm so glad you're a part of my team. We're going to do great things together. I just called your wife, I just called your husband, to let them know that I'm so proud that you're part of my family."

But the most important element of leadership is trust. "The essence of all leadership, the essence of making a difference, is to have the trust of people who make the difference for you. That's what great leaders do. They make a difference because they can trust and respect [their people], and in return they get trust and respect. There is no other answer to it."