You are chairing a board and/or are the CEO of a company that has a brutal problem at hand, the kind that Nokia, RIM, Yahoo or to some degree HP faces in the technology arena nowadays: new players better understand the concept behind your business and consistently eat away your share of the pie; since you are stuck in the very pattern that made you successful or worst yet your patterns have been causing your troubles for years, time is not on your side.
What do you do?
If you take Yahoo’s, HP’s and Nokia’s example you try to solve this by hiring a new CEO (not sure if yahoo’s looking for a new CEO or a buyer right now. This point applies to when they hired Carol Bartz). If you follow RIM’s example, you’ll try to…. stick it out I guess.
Both hiring and sticking it out may work if you do it based on the right foundation. This foundation is painfully missing in most cases so fundamental questions are not being answered or worst yet, they are not being asked; questions that apply equally to hiring (leadership) and strategy.
When this foundation is not set up the context may very well be wrong for all your initiatives; when the context is wrong, the smartest people will inevitably fail or if they’re really smart they do everything in their power to create this context BEFORE they do anything at all. Step Zero!
What happened at Yahoo was that this foundation was simply missing; a clueless board brought in a (good) CEO to act like in a typical turnaround situation: cut cost, get rid of unprofitable businesses, focus on what’s supposed to be (arguable) strengths, etc. Yahoo’s situation was NOT a turnaround situation! When a company faces a strategic inflection point it’s more than turnaround: a new concept needs to be developed for a new strategy.
HP’s board is similar in that they have absolutely no concept moving forward. They just replaced one pure operations guy without the slightest trace of vision (Apotheker) with another (Whitman) to “lead HP”. Is that her mandate? …based on what exactly?? An important question to investors, employees and the new CEO.
If you do decide you will hire a new CEO, you must create your OWN concept so the CEO can develop the appropriate strategy.
If you can’t develop the concept, you’d better choose your next CEO based on whether (s)he can provide you with a convincing one. I don’t know how the hiring of Stephen Elop took place at Nokia, maybe it fell under this category, maybe not. Right now the company is not communicating anything that may hint at a concept behind the Windows 7 decision, which by itself doesn’t seem to be a long term strategy to me; if there isn’t any, Elop (just like Apotheker recently and Whitman soon at HP or Bartz at yahoo) will not stay longer than 3 years, but this is another story.
RIM is also making moves based on a strategy that seem to be lacking a foundation. Too much focus on competitive moves, too much reacting, bitter and stubborn fear lingering above the heads of the co-CEOs, not one initiative launched that’s based on a concept the company owns (unlike in their prime).
Doing anything without articulating the concept behind your strategy is like shooting in the dark: it smells like panic, it doesn’t look good and it’s flat out irresponsible!
In most of the cases there are more than one perceived options available for decision making. I won’t deal with them now.
What’s interesting is when there are no options so the decision is a “yes or no” question: the only available option is going to be maintained or discarded. Chances will be developed or one finds himself with no options, “outside” of the familiar domain.
In mechanical (e.g. business) organizations almost always the same decision is made: (at least partially) keep the available option!
This is due to the lack of vertical integration within the organization:
- There is no concept that could serve as an integration platform
- Since there is no concept the roles and functions within the organization are mechanical, mostly without foundation
- The illusion of integration is maintained by the presence of options
Most managers don’t have the freedom to make decisions that eliminate options and/or simply can’t create new options, thus they are often forced to make decisions that don’t align to the concept: they make bad decisions.
The essence of leadership is a principle based concept; by representing the principle concept, the leader creates options, seemingly out of thin air; in reality however, out of the concept.
Decision making, that aims at maintaining options, even bad ones, is a clear sign of that there is no concept, there is no leadership and of course that there is no organic element present in the organization.
This is characteristic to all organizations. Almost all of them lack a real concept.
It is obvious that without an appropriate concept we can’t talk about strategy, leadership or organization.
It is less obvious that leadership, strategy and organization are based on the same foundation.
Define this foundation, and you’ll change entire markets.