“Good leadership involves responsibility to the welfare of the group, which means that some people will get angry at your actions and decisions. It’s inevitable, if you’re honorable. Trying to get everyone to like you is a sign of mediocrity: you’ll avoid the tough decisions, you’ll avoid confronting the people who need to be confronted, and you’ll avoid offering differential rewards based on differential performance because some people might get upset.” According to Colin Powel, Chairman (Ret), Joint Chiefs of Staff, leadership means sometimes you will piss people off.
Such a simple concept yet one inherently the antithesis to basic psychological philosophy, Judeo-Christian belief, and the generally accepted rules of road.
Typical reaction of business leaders in economic stress includes downsizing staff, tightening financial belts and budgets, as well as tending to make the safe and conservative decisions versus the creative or innovative. During the past few months, I had the opportunity to speak with leaders in healthcare, civic, non-profit, government, and corporate business. Each sector has been impacted by the recession. Older leaders quickly note this recession is one of the worse experienced; but, sociopolitical and psychosocial trends have impacted bottom lines equally throughout the years. Disruption in day to day activity in any form creates leadership challenges. Leaders quickly cite change agendas within the business unit – any change in the corporate equilibrium, as disruptive as the events of the last twenty months.
Leadership, perceived as the great balancing act, therefore enables a model that can be examined, identified, and measured. Theoretical models pinpoint the midpoint of the decision continuum as the most advantageous position. In reality this midpoint is rarely achieved. If it is reached, its duration is short-lived.
A large business unit has been undergoing leadership change for the past eighteen months. Its senior leader announced her stepping down after nearly a quarter of a century at the helm overseeing seemingly tumultuous change on an annual basis. Lay leadership’s objective was to retain corporate culture as its premier task in selecting the new senior leader. The selection process translated this primary need into a decision to promote its next leader from within the corporation. Their rationale was that the current culture could be honored and prolonged by retaining a leader who spent their professional life at her (soon to be) predecessor’s feet.
This scenario denotes board leadership’s recognition of corporate equilibrium – any change movement to the corporate balance is disruptive requiring a new balance to be achieved. The internal candidate was part of the initial corporate culture for nearly two decades. Nurtured by its growth, she cut her teeth by creating change and innovation within the parameters developed by leadership. Board leadership supported ideas of continued change anticipating a new chapter in the life of this corporation; but within the same book.
Great concept. Senior leader change is a constant in business with countless textbooks and chapters published over the years. The concept begs the question of what makes a real leader. If the role of the leader is to shape and define the agenda can the previous culture survive and thrive? Peter Drucker, commenting on leadership’s primary task noted “that the bulk of time, work, attention, and money first goes to “problems” rather than to opportunities, and, secondly, to areas where even extraordinarily successful performance will have minimum impact on results” .Within this text is there time to change a staid culture when each day brings new problems?
The creation of a new senior management team, filling positions intentionally vacant until the leadership decision was reached, and managing a smooth transition between leaders is time consuming. Add to it financial issues heretofore unknown for a generations, and the result is an agenda overflowing with immediate needs. Each decision creates a new culture. Moving a new administrative assistant into the CEO’s admin is a dramatic change within the organization regardless of how long she or he had been part of the corporation. Simple and immediate decisions that forever change the corporate equilibrium during these initial days include:
· Communication style, tenor, and venue
· Members of the inner circle
· Candidate to fill the new CEO’s former position
· Management style
There is also the issue of being part of the corporation for two decades and reviewing the list of ideas or actions that never came to the forefront because they would not be accepted by the existing leadership. You know the list in one’s head (or for Type A personalities on the laptop filed under hidden agenda). Those ideas often shared with a spouse, significant other, locker room, or after party chatter. We all have the list. Regardless of how close to the leadership structures the plans that were just too out there to be accepted. The selection as new CEO presents an opportunity and affirmation by the Board your ideas are good ones and should shape the future of the corporation therefore now is the time.
It is virtually impossible to retain the culture of the current organization once the equilibrium has been changed. When Jeffrey R. Immelt took control of GE he was concerned with the GE culture of focusing on bottom-line results and “tendency to get rid of those who don’t meet them.” Immelt was concerned this embedded cultural belief would keep GE staff from risk taking and innovation. Immelt’s agenda was different from our original case. For Immelt, the agenda was one of total change and cultural revolution — move GE’s average organic growth rate (increase in revenue stemming from existing operations in lieu of new deals or currency fluctuation) to 8% from approximately 5% over the past decade. The Jack Welch led culture was out with the Board’s selection of Jeffrey Immelt.
Our CEO in the scenario was selected with a different purpose than Immelt. Remember, retention of the existing culture was job #1. Selection was predicated on a proven track record within the corporation supposedly ensures common values, vision, aspiration as foundation to the corporate growth. Each decision point during the first sixty days indicated
1. A different management style;
2. Commitment to her existing inner circle;
3. An agenda to shift priorities;
4. Desire to redefine senior management to conform to her style of leadership and management.
In actuality, a new definition of management structure and its composition was underway, removal of some senior leaders and top line management who now were labeled as culturally unfit. Once one individual carries that label the Board’s intent was absent. Either the label of incongruent with the culture of the organization is a sham for poor performance or inability to attain objectives over the course of ten years or more; or the label marks the beginning of a cultural revolution within the organization.
Tim Hobbs, M.D., a former colleague and CEO of Community Physicians of Indiana wrote a leadership paradox that that “(l)eaders are usually advocating change while maintaining the cohesion and stability of the organization.” Removing those who bring a different perspective, conflicting view, and overachieving or achieving at requirement doesn’t maintain the cohesion of the organization as much as it symbolizes the need to shift ones beliefs and attitudes to those of the new CEO…or become culturally incongruent.
GE’s board leadership was honest with themselves, their investors, managers, and workers with the transition from Welch to Immelt. Immelt’s cultural revolution was front burner and communicated as such with the approval, dare say directive, of ownership. In the scenario presented, board leadership believed retention of a known entity would afford respect of their wants and needs while tendering the illusion to internal and external audiences that the mission, vision, values would remain the same.
This position is certain for failure.
The newly appointed CEO has two options. The first option is to move forward along the same path travelled by the corporation, procrastinate on difficulty decisions trying to get no one mad, and quietly begin to designate individuals congruent or incongruent with cultural beliefs. The effect of this choice is angering the innovative, the creative, and the productive within the corporation. The ranks of those who are culturally sound tighten and a we/they culture develops. Typically what makes a leader successful within a broader organization is they tend to become outliers who are nurtured within the existing culture. Often provided sufficient locus of control to product results as a product of innovation while maintaining overall, macro-level status quo, these individuals appear to be the brightest and most talented. Once the outlier becomes the insider, the rules change — cultural equilibrium is disrupted and the system searches for a new midpoint.
The second option for our new leader is to begin introducing additional new players from the outside and intentionally creating disrupted equilibrium. Demonstrate breaks with the existing culture by challenging its most cherished traditions that are most often embodied in its leadership ranks. This approach is honest. This approach enables the current ranks to challenge themselves and determine if they can share in the new agenda or not.
The crucial decision in our case is the belief that choosing the tried and true, the known entity, is somehow retaining the corporate status quo is placing a mask over board/owners and the organization as a whole. The new CEO chosen for their winning record within the existing organization and perception they have been groomed for the new role as one of the brigade denies the individual the opportunity to bring independent thinking to the position. More importantly it denies one of the laws of nature – any change within the system is disruptive and its component parts will search for a new equilibrium.
Retired Chairman. Powell says that “Leadership is the art of accomplishing more than the science of management says is possible.” He doesn’t deny the laws of science; in acknowledging these laws the challenge of true leadership is to go above and beyond openly, honestly, and focused. As for our scenario, time will tell if the action of the board and new CEO result in growth, success, and attaining the corporate vision. In a time of constant change and internal/external challenge the fewer roadblocks created the easier success can be attained. Leaders create vision, bring the masses together to believe it, build it, and share it. Clarity of the vision is not achieved by changing the lens without changing the prescription.
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