Getting inside a leaders brain

Updated: Aug 28 2008, 07:34am hrs
Major transformations are often associated with one highly visible individual. Consider Chryslers comeback from near bankruptcy in the early 1980s, and we think of Lee lacocca. Mention Wal-Marts ascension from small-fry to industry leader, and Sam Walton comes to mind. Read about IBMs efforts to renew itself, and the story centers around Lou

Gerstner. After a while, one might easily conclude that the kind of leadership that is so critical to any change can come only from a single larger-than-life person.

This is a very dangerous belief. Because major change is so difficult to accomplish, a powerful force is required to sustain the process. No one individual, even a monarch-like CEO, is ever able to develop the right vision, communicate it to large numbers of people, eliminate all the key obstacles, generate short-term wins, lead and manage dozens of change projects, and anchor new approaches deep in the organisations culture. Weak committees are even worse. A strong guiding coalition is always neededone with the right composition, level of trust, and shared objective.

The food company in this case had an economic track record between 1975 and 1990 that was extraordinary. Then the industry changed, and the firm stumbled badly.

The CEO was a remarkable individual. Being 20 % leader, 40 % manager, and the rest financial genius, he had guided his company success-fully by making shrewd acquisitions and running a tight ship. When his industry changed in the late 1980s, he tried to transform the firm to cope with the new conditions. And he did so with the same style he had been using for fifteen yearsthat of a monarch, with advisors.

King Henry had an executive committee, but it was an information gathering/ dispensing group, not a decision-making body. The real work was done outside the meetings. Henry would think about an issue alone in his office. He would then share an idea with Charlotte and listen to her comments. He would have lunch with Frank and ask him a few questions. He would play golf with Ari and note his reaction to an idea. Eventually, the CEO would make a decision by himself. Then, depending on the nature of the decision, he would announce it at an executive committee meeting or, if the matter was somehow sensitive, tell his staff one at a time in his office. They in turn would pass the information on to others as needed.

This process worked remarkably well between 1975 and 1990 for at least four reasons: (1) the pace of change in Henrys markets was not very fast, (2) he knew the industry well, (3) his company had such a strong position that being late or wrong on any one decision was not that risky, and (4) Henry was one smart fellow.

And then the industry changed. For four years, until his retirement in 1994, Henry tried to lead a transformation effort using the same process that had served him so well for so long. But this time the approach did not work because both the number and the nature of the decisions being made were different in some important ways.

Prior to 1990, the issues were on average smaller, less complex, less emotionally charged, and less numerous. A smart person, using the one-on-one discussion format, could make good decisions and have them implemented. With the industry in flux and the need for major change inside the firm, the issues suddenly came faster and bigger. One person, even an exceptionally capable individual, could no longer handle this decision stream well. Choices were made and communicated too slowly. Choices were made without a full understanding of the issues.

After two years, objective evidence suggested that Henrys approach wasnt working. Instead of changing, he became more isolated and pushed harder. One questionable acquisition and a bitter layoff later, he reluctantly retired.

This second scenario I have probably seen two dozen times. The biggest champion of change is the human resource executive, the quality officer, or the head of strategic planning. Someone talks the boss into putting this staff officer in charge of a task force that includes people from a number of departments and an outside consultant or two. The group may include an up-and-coming leader in the organisation, but it does not have the top three or four individuals in the executive pecking order. And out of the top fifteen officers, only two to four are members.

Because the group has an enthusiastic head, the task force makes progress for a while. As everyone on the task force is busy, and because some are not convinced this is the best use of their time, scheduling enough meetings to create a shared diagnosis of the firms problems and to build trust among the groups members becomes impossible. Nevertheless, the leader of the committee refuses to give up and struggles to make visible progress, often because of an enormous sense of dedication to the firm or

its employees.

After a while, the work is done by a subgroup of three or fourmostly the chair, a consultant, and a Young Turk. The rest of the members rubber-stamp the ideas this small group produces, but they neither contribute much nor feel any commitment to the process. Sooner or later the problem becomes visible: when the group cant get a consensus on key recommendations, when its committee recommendations fall on deaf ears, or when it tries to implement an idea and runs into a wall of passive resistance. With much hard work, the committee does make a few contributions, but they come only slowly.

A postmortem of the affair shows that the task force never had a chance of becoming a functioning team of powerful people who shared a sense of problems, opportunities, and commitment to change. From the outset, the group never had the credibility necessary to provide strong leadership. Without that you have the equivalent of an eighteen-wheeler truck being propelled by a lawn mower engine.

Meanwhile as this approach fails, the companys competitive position gets a little weaker and the industry leader gets a little farther ahead.

Extracted with permission from Harvard Business School Press