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What allows a leader to take the steps needed to
solve a problem or master a difficult situation?
What keeps the desire to act from being impetuous
and uninformed, as in "ready, fire, aim" behavior?
The answer is that the capacity to act effectively
and decisively is a complex mixture of brain and
gut, a combination I call threads in thinking. It
includes these qualities:
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An ability to distill
a situation to its simplest dynamics; to understand
the issues and the consequences of doing nothing;
and to formulate a specific plan.
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Being extro-spective:
seeing the business in the larger context of the
industry and in the marketplace; seeing a situation
from a high-altitude view and making sense of it on
the ground.
-
For opportunities, an
ability to see the true benefits and risks, which
are not always obvious.
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Possession of a mental
library of truly relevant analogies and other mental
models that can be applied to characterize the
situation in a way helpful for making a choice.
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An ability to identify
valuable sources of advice, experience, and wisdom
(inside the company and out); to elicit information
and know when to do so.
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An instinct for
calibrating the value of and motive for facts and
information people are giving you, the subtext of
real agendas.
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An ability to discern
both financial and nonfinancial impacts and include
them in the calculus (company reputation, morale,
future business options), then weigh the risks.
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An ability to
anticipate issues and define a point of view so you
don't have to do it for the first time under
crisis.
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Being able to think a
couple of moves ahead, as in chess, or as Steve
Kaufman put it: "the ability to look around the
corner and see what's coming." This ability and most
of the others can be tested and developed.
It's a tall order, but remember that no one starts
out with all of these abilities. You develop these
threads and judgment only with experience. This is
done mainly through on-the-job training. Just
remember how many of the leaders we've been
discussing failed in school, how many were far from
the top of their class, how none were rocket
scientists. Only by working through major challenges
in the first place do you develop and nurture these
abilities until they become part of you and part of
your instinct.
In the Eye of the
Storm
Deciding that you must act, and then acting, is not
as straightforward as it seems. Circumstances will
often make your decision to take action in the first
place very challenging. Remember that Paul Evanson
was an outsider with no attachments to the company's
past, no involvement in creating the current mess,
and no ties to its current leaders. Although shocked
by what he saw, he was intellectually and
emotionally detached and knew that he was seeing
clearly and knew in a heartbeat what had to be done.
If only knowing what to do were always that easy!
It
is harder to be detached when you are part of the
team -- part of the woodwork. It is an ability that
requires the right balance of constructive emotions
(your motivating adrenaline and empathy for others,
for example) and an objective, clinical assessment
unblurred by emotions.
Let's see how Arthur Martinez of Sears was able to
take action in spite of his insider status, when he
came to the sad but necessary conclusion that he
must fire someone he cared about a lot. Arthur was a
high-ranking executive at the BATUS retail group
(the onetime U.S. subsidiary of British American
Tobacco that owned numerous department stores,
including Saks, Gimbel's, and Marshall Field's) when
two of its department store chains were failing.
The
CEO of one of the chains was a well-liked, longtime
employee with a large and loyal following among the
managers. In earlier years, he had been able to do
an admirable job of building the chain and its
brand. That was why some pleaded with Arthur to keep
him. Others agreed with Arthur, who saw him "out of
gas," unable to keep up, as industry consolidation
and competition intensified. His poor performance
had gone on for several years, and the chain's
financials were slowly deteriorating. Pressure to
perform at BATUS was increasing at that time, as
tobacco companies were coming under increasing
attack by regulators and interest groups. Looking
beyond the immediate situation, Arthur was
anticipating that a hostile event could take place
in such an environment. Sure enough -- into this
difficult business environment strode the specter of
an imminent hostile takeover by British financier
Sir James Goldsmith, adding incentive to improve
financial performance and consider engineering a
spin-off of the retail group, which ultimately took
place.
Arthur had to take all of these factors into
consideration as he analyzed the situation before
him and weighed the alternatives. He knew and liked
the man personally but had to weigh many factors:
the risk of moving a popular executive from office
with the subsequent loss of knowledge, loss of
expertise, and impact on hundreds or thousands of
employees loyal to the executive against the
uncertain improvement in the retail chain's
performance that might ensue by putting someone else
in charge. Before firing a once valuable employee,
any prudent executive will have exhausted other
remedies: coaching, reinforcement of performance
goals, setting of deadlines. And Arthur had done
just this.
Ultimately, he made the tough decision to act,
engineered the man's resignation, and instituted a
host of changes in personnel and strategy.
In
a story of similar challenge, five topflight sales
executives of the national accounts team left Ecolab
to form a competitor -- creating a great deal of
uncertainty and worry among the division leaders. Al
Schuman launched an immediate communications blitz,
rallying everyone to work together to recover from
what he labeled as "our December 7." He also
launched a counterattack on the new competitor to
prevent its becoming a real threat. He credits this
intense passion to win to experiences in his youth
and in early employment.
Copyright 2007 Stephen H. Baum. Published by
Crown Business, an imprint of the Crown Publishing
Group, a division of Random House, Inc., New York (www.crownpublishing.com).
Stephen H. Baum has been an advisor and coach to
CEOs for more than twenty years, first as a partner
with Booz Allen & Hamilton, the global consultancy
-- where beyond the client work he was also on the
appraisal and development committee and mentored
young associates -- then as an independent
practitioner. Stephen's book, What Made jack welch,
Jack Welch is available from Crown Business.
Visit
www.stephenhbaumleadership.com.
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