I have 5 stories for you today about CEOs, two who don’t and four that do.
Pundits (consultants, academics, bloggers) are fond of lauding CEOs for their vision and skill at imparting it to their followers—Richard Fuld, Bob Nardelli, Jeff Skilling, Bernard Ebbers, Dennis Kowalski, the list is long—but after their meltdown you hear only from the Monday morning quarterback crowd.
But if you want to sort the true stars from the others, you need to take a long-term look—not Wall Street’s typical quarter or even a decade—at more than the stock price.
Moreover, you need to look at the down times; the times when the economy sucks, yet the CEO still finds ways to foster a great culture and stoke innovation—not just cut staff and threaten execs with termination if they don’t make their numbers.
For better or worse, it’s not in the vision or the leading, it’s the doing.
Our first story is should be a familiar name to all of you. Remember Sandy Weill? The man who drove the repeal of Glass-Steagall in 1999 and whose deal making built CITI, the colossus that never really jelled. He was named “C.E.O. of the Year” in 2002 by Chief Executive Magazine, but that was then and this is now.
In today’s cutthroat business world how many CEOs would lift a finger to save their competition? Ted Baseler, CEO of Chateau Ste. Michelle did exactly that when freezing temperatures wiped out the grape harvest in 2004. He didn’t just save his competition; he’s credited with saving the entire Washington state wine industry. Baseler is the quintessential big picture guy.
“We want Washington known. All of it. We’re not about to fight over whose bottle of wine gets sold. We’re competing with Napa, with France. We’re not competing with Washington wineries.”
My last offering is an interview with Pete Peterson, co-founder of Blackstone Group, looks back on s storied career and offers his insights as to what’s needed to “rebuild the American dream.” There’s a video (that refuses to embed) and a PDF of the interview (requires free registration). I think you’ll find it interesting.
Vinod Khosla, the co-founder of Sun Microsystems and now a venture capitalist, considers himself a pragmentalist (pragmatic environmentalist) and his investments reflect that attitude.
“And I’m a firm believer, technology is the real solution. The world will not go backwards. Human beings aren’t made that way. And so you have to come up with different solutions.”
All well and good, but he goes on to say that leaders need to hold opinions based on their own belief system and that if you believe strongly enough you can lead confidently.
The examples he mentions are Steve Jobs and Larry Ellison and therein lies the problem.
It’s a common attitude, cite one of the “good guys” to illustrate so-called leadership qualities and ignore all the bad examples of the same action.
Ellison and Jobs are known for forging ahead based on their own opinion and convictions and damn the torpedoes and analysts. Fortunately, they’ve both been right far more often (not always) than wrong and so are held up as examples of the need to hold to passionately to one’s beliefs.
But what about all the leaders who follow their own belief system and blow up their companies when they damn the torpedoes?
Robert Nardelli at Home Depot; Richard Fuld at Lehman and the rest of the Wall Street CEOs who passionately believed in derivatives and minimized the risk; John Thain at Merrill Lynch; Al Dunlap at Sunbeam; the list is endless and timeless.
Khosla is interesting and obviously successful following his own advice, but I suggest that you look for more than confidence based on a personal belief system when choosing someone to follow.
No matter the size of your company, the true path to changing company culture is inherent in the MAP (mindset, attitude, philosophy™) of the CEO who must desire and support the changes or they won’t happen. It’s that simple.
In fact, that’s the main reason why culture so often changes when the top person changes. One of the most glaring examples of this was Robert Nardelli, who destroyed Home Depot’s culture and saw turnover rates at all levels soar.
Culture always looks like the boss, even when it bubbles up from the workers, since it’s the boss who allows and enables it to bubble up and then supports its implementation.
When seeking to change a culture it’s critical to identify the source(s) of each trait displayed in your Cultural Web (Power Structures, Organizational Structures, Rituals and Routines, Symbols, Control Systems, Myths and Stories).
If the source, CEO/boss, senior executive, etc., isn’t willing to change their MAP enough to let go of the previous approach then change is more than difficult, it’s unlikely.
Sometimes the bottleneck isn’t a person, its tradition, usually some variation of, “…we’ve always done it that way.”
But tradition is habit and habits are part of MAP.
Assuming that you aren’t the bottleneck, it’s your responsibility to not only engender, but also facilitate, MAP changes in those below you.
However, doing the same in those above you is far more difficult and often ends up as an exercise in futility.
Successful change, whether in your own MAP or in others, isn’t just a function of how open you/the person is, but of what level of trust is inherent in your organization. No one is going to admit to a problem, let alone to being the source of it, in a culture where the messenger is killed.
Finally, getting people to change their MAP is similar to getting alcoholics to stop drinking—you can explain the importance, appeal to their intelligence, threaten their livelihood, use any other coercion you dream up, but it won’t happen until they choose to change.
Moving forward means change and changing is a private decision that each of us makes consciously or not, in large and small ways on a daily basis—and that’s really the bottom line.
As you all know, I’m a corporate culture addict; I follow stories on culture the way most people follow celebrities. I have three to share today.
As anyone who follows business news knows Alan G. Lafley, CEO pf P&G for the last nine years is stepping down. Read this McKinsey interview with Lafley from 2005 and compare it to what he did. This is a guy who walks his talk. Then take a look at this short comparison by Bruce Nussbaum of Lafley and Bob Nardelli and decide which one you’d rather channel.
Want to read a short short story about changing corporate culture? Good, because here is one.
Last is a fascinating story on how to innovate from the outside in. Which leads you to Innocentive and the opportunity to innovate on your own and get paid for it. Don’t laugh, real creativity doesn’t have a job title, nor do colleges offer degrees in ingenuity.
The last few days have been about the importance of culture, so why change now?
If you’re a long-time reader you know that I’m a culture fanatic. I believe that culture is the root, driver and cure for 99% of business and, as is said today, that culture eats strategy for lunch.
Culture also makes companies a lot of money, think Berkshire Hathaway, Apple, Google, Southwest, and Costco. And if that doesn’t convince you look at the dark side and think about what happened when Robert Nardelli trashed Home Depot’s culture.
Next, a Rambus alumni talks about how culture influences innovation in a company that makes its money by inventing and licensing its IP.
I’m a firm believe in using your company’s culture as a screening tool and I’m not the only one. Steve Balzac has some thoughts on the subject, too, including the price you pay for not remembering that people don’t magically change after they’re hired.
When Idris Jala was hired as CEO of a failing state-owned airline he had exactly three and-a-half months operating cash in which to turn it around—no bail out, no other options.
He succeeded well beyond expectations with a combination of laser focus on the P&L statement and his own view of leadership. Here are some of the more intriguing thoughts from a McKinsey interview with him.
Jala is one of the most pragmatic CEOs in action today.
“At a board meeting on my first day, I announced our business-turnaround blueprint. I’d never worked a single day at an airline before, but looking at the P&L it didn’t take more than an hour to figure out the solution. If you have to control costs, you just go and cut the costs. If your network’s inefficient, get rid of the routes that are bleeding cash. And if you have a problem with low yield, fix the yield. What else are you going to say?”
What else, indeed? But in an era of exotic plans and visions, focus on something as basic as P&L is as refreshing as it is unusual.
Jala also had an interesting view of leadership.
“If the leader doesn’t believe in the journey, then it cannot begin.”
I find that profound because so often I hear corporate leaders add a multitude of caveats to what they plan; explaining ahead of time all the reasons why success may not happen and if they don’t truly believe why should anyone else?
“The single biggest thing a leader brings to a turnaround is hope.”
Not fear and trepidation, but a real belief that the company can be saved through hard work. One of the ways that Jala accomplished this was through his total transparency.
“Publishing helped us build a winning coalition not only with the government but also with other stakeholders, like the unions, the staff, and the public. Being upfront about the P&L and making it all transparent were very important to bringing the coalition together.”
I know this sounds cynical, but not in my wildest dreams can I picture your typical corporate chieftain doing this. Maybe I’m naïve, but this kind of transparency requires the guy-in-charge to open himself to all kinds of input and criticism. The mind boggles at the thought of Robert Nardelli (Chrysler) or Rick Waggoner (GM) doing anything similar.
“But once results begin to appear and new leaders begin to learn, you must be ready to let go and empower them…The corporate graveyard is full of people who thought they were indispensable.”
Jala has a good handle on this powerful leadership attitude that too often does not see the light of day.
Idris Jala’s 5 + 1 Embedded Principles of Change
The game of the impossible;
anchoring everything on the P&L;
building a winning coalition;
discipline of action; and
situational leadership.
And the additional one…
“The final principle is a subject people don’t talk about in the corporate world: divine intervention. More than 50 percent of what happens to you in life, and in my case probably more than 60 percent, is outside your control. It is important for everyone in an organization, particularly the top leaders, to understand that. I can’t, for example, control oil prices, SARS, or other things like that.”
Rigorous practice of the first five balance the last one.
Join me tomorrow and explore a new Saturday feature here at Leadership Turn.
Robert Nardelli, best know for almost killing Home Depot by trashing its customers and ignoring its culture and poster boy for the platinum parachute, is back in the news.
For those of you vacationing on Mars (the only way you could have missed it) last August, Cerberus hired him to run Chrysler.
A year later, in a marriage between surreal and oxymoron, Nardelli is teaching executives how to create a a quality-based customer-centric culture.
It’s a sweeping change in MAP, but apparently he read a book and was converted.
Wow! As Kevin Meyer said over at Evolving Excellence, “I guess I better get a copy of that ice cream book. It must really be something.”
But before you get too excited, let it be noted that Nardelli hasn’t actually talked to any dealers or showroom customers—probably too mundane and not measurable enough.
How committed do you think Robert Nardelli is to customer service?
I have 5 stories for you today about CEOs, two who don’t and four that do.
In fact, that’s the main reason why culture so often changes when the top person changes. One of the most glaring examples of this was Robert Nardelli, who destroyed Home Depot’s culture and saw turnover rates at all levels soar.
As anyone who follows business news knows Alan G. Lafley, CEO pf P&G for the last nine years is stepping down. Read this 
Culture also 
When Idris Jala was hired as CEO of a failing state-owned airline he had exactly three and-a-half months operating cash in which to turn it around—no bail out, no other options.
and was converted.
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