Why CEOs leave
Depending on how much press we read, we can come across headlines that follow this pattern on a weakly basis:
XYZ has left his post after only x months due to differences of opinion on the strategy of the organization.
While we know that in most of the cases this is just a bullshit way to say that people didn’t keep promises, didn’t get along, new interests emerged that the new guy was crossing etc., sometimes this is really the reason why the new CEO leaves….and when this happens, it raises the following question:
How did the board decide exactly by this CEO?
Truth is in most cases the board doesn’t have a solid case for selection. Considering experiences, track records and chemistry is not enough; even ideas about strategy are not enough: how can the board decide if these ideas are good? Based on what?
The board MUST have a CONCEPT based on which a strategy maybe built before they start talking to candidates.
This concept should be discussed with the candidate who -if he’s good- can credibly add to it, modify it, etc. If the board hires the candidate, he’d present a strategy that complies with the concept and the board can approve it, or -if it’s a well functioning board- credibly add to it, modify it, etc.
In lack of this the typical schema goes something like this:
“can you increase profitability by 20% in the next 3 years?” “yes!” “how?”
“I see chances of reducing operational costs by introducing the following best practices and to increase revenues by cross selling, better marketing, expanding into new markets, etc.”
The schema is basically kept on the level of cliches which means communications is meaningless, which in turn means nobody knows anything.
Sure: in some industries it’s more difficult to come up with such a concept than in others. Being a 3rd tier supplier in automotive manufacturing SEEMINGLY leaves much less room for new/improved concepts that could serve as a base for strategy than in industries that cry out for new concepts, like media for example.
The common denominator across all industries is that only a handful of players have a concept, the rest operates on cliches….like the headlines they produce.
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How to implement gender quotas – Deutsche Telekom
The debate is on about the recent change in the board of Deutsche Telekom.
Claudia Nemat (42, from Mckinsey) will lead Europe (excluding Germany) from September, Marion Schick (52, ex minister of education and culture) will be responsible for HR from January 2012.
René Obermann announced plans last March that by 2015, 30% of all middle and upper level management roles should be filled by women, becoming the first DAX listed company to introduce gender quotes; since then approximately 200 women moved into management positions at the concern.
Overall it seems the transition is handled as a regular project project delegated to people on the lower echelons of the organization, not as a significant transformation that requires a well articulated integration approach.
Since the concept is missing for the transformation, no appropriate approach can be developed and in lack of a clearly articulated approach people are unavoidably set up for failure; the press already covered the first “victims”, quite intensively.
As more companies will follow suit and the competition for competent female leaders will increase, in order to ensure a leadership position in being able to attract the best, it is advisable to
- develop a defendable concept: why are we doing this? “…having more women in senior positions would make life “more colourful and also prettier” as Josef Ackermann, the head of Deutsche Bank said, is not exactly a concept; such statements typically signify that there is absolutely no concept behind the gender quotas besides simply the equality question which Obermann for example is trying to downplay. I’d go as far as saying that if you don’t have a defendable concept, don’t do the initiative!
- integrate this into the concept that already serves as the foundation for corporate strategy
- re-design the organization accordingly
These steps must serve as a foundation for successful implementation of any alignment initiatives, including those related to the implementation of gender quotas.
Without this, the whole initiative will lack any trace of qualitative consideration and will remain comparable to projects like: “let’s make sure that 30% of our switches come from Siemens”… that would be a disgrace for everybody involved…nothing against Siemens of course!
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Originality
It would be flat out crazy to discredit the originals just because there are much more copycats; yet this happens all the time: think about the startup scene, the investment scene (vc, pe), management theories and practices or if we want to go a little deeper, about philosophies and arts.
The problem is complex but it is worth addressing it for the benefit of those who are paid to make decisions that make a difference.
First off: there is no such thing as original! More precisely: originality cannot be attributed to an individual. An individual always thinks in frames determined by the era, the geography, social milieu, all that stuff which manifest sub and supra individualistic “currents”/tendencies which are much bigger than the individual. Looking into these in detail would lead too far; we have partially addressed them when talking about the emergence of identities.
Second: one of the main such currents of our era is precisely individualism: celebrating the limited, the small and confusing it with greatness. This has birthed a fascination with bigness in terms of size and numbers (quantity replacing quality); this confusion is the context for judging originality based on who is obeying actual/current trends and tendencies more blindly. Good examples are Warhol and more recently Hirst in the “art” domain and just about any rock/pop/musical/whatever sensation in the music domain for the past 60 years or so. Here the trends are clearly sub-individual: the pre-requisite for success is giving up the remaining integrative factors in the personality to PASSIVELY give room for the above mentioned disintegrative tendencies, fostering undifferentiation while complying with the already undifferentiated mass.
What about business?
A keen observer may easily recognize analogies between business and the examples above. Intellectual PASSIVITY has become the main style element in business as well that never goes beyond questioning what is popularly referred to as facts: academia gathers and organizes experiences (what has worked in practice), management consultants create “easily applicable” methodologies and management buys them and tries to implement them with the least amount of pain possible. Challenging all this typically result in the kind of hostility only the fearful may exhibit.
The same goes on in the startup and investment domain: module mentality. “We buy ready made stuff”. The tendency is social, green, whatever: within this we pick teams who already did it (most likely in a previous trend) and depending on our geography we try not to be the 5th, 10th, 20th player in the domain. This is what we do, this is what we don’t do. Simple. Best is if nobody questions the fundamentals in the whole process: not the founders/owners, not the advisers, not the facilitators (the limited partners never do and we comply with them).
To be absolutely fair: yes, most of the people who question the fundamentals do so because they don’t understand them, not because they do and see the inefficiencies. And this brings us back to our opening point: just because a lot of people don’t get the fundamentals, don’t assume that neither of them do (for example the whole concept of elevator pitch competitions is based on this assumption).
So what the hell is originality?
Like in everything else, there are two types: pseudo originality and real one.
Pseudo originality is all of the above mentioned music and arts examples. Let’s pick a popular one in the business domain too:
A significant tendency today in the Western hemisphere is the elimination of differences; one current of this tendency is sharing. Anything that has to do with sharing is going to succeed among the masses.
Original is whoever pursues this more aggressively. From this point of view facebook is more original than myspace or friendster was (both too specialized in music and dates respectively, thus not allowing maximum sharing) or linkedin is (also too specialized).
More original because it’s closer to the current, but only pseudo original from the point of view that it doesn’t capture the concept (of disintegration in this case) consciously but does so blindly and passively.
Somebody MUST be aware! Ideally it’s the decision makers: the investors, the chairman, the CEO.
Awareness is a key element of originality or authenticity; awareness of fundamental (original) concepts! These concepts have nothing to do with business.
The better one captures fundamental concepts (in other words principle based concepts) the more original and authentic one is.
Some fundamental concepts whose capture may result in authenticity: independence, differentiation, integration, loyalty, control, power, dominance, intelligence; they all have their negative pole that results in pseudo originality: dependence, uniformity, selfishness, manipulation, aggression, cynicism and arrogance, street smarts.
These are the ones that should be relatively easy to translate to the business domain, yet there is great confusion about them in business.
Without being aware of principle based concepts, nobody understands dominating tendencies; without truly understanding current tendencies, nobody can judge either people or business propositions and without this vantage point nobody leads anything.
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Setting the circumstance – the secret of distinction
A general once summed it up very succinctly (approximate quote):
” if I set a heroic task, heroic men come forth; if I promise benefits and convenience, the street hustler types come forth”.
That’s pretty much it.
I find it fascinating to observe how this works not only as a principle of attraction but also as a principle of repulsion:
If we set circumstances for the Right thing (which transcends individual interests), the small man flees; it often triggers bodily reactions in them like nausea, sweating, stuttering, etc.
Setting the circumstance is sometimes as easy as exhibiting the appropriate style:
When interviewing people in context of building leadership teams it’s educational to see what happens when one gives them the royal treatment (treating them as royalties; btw. this should always be the case).
The royal treatment may trigger humbleness and respect or arrogance and cynicism: it polarizes. People who are aligned to principles have a sense of style that goes beyond the domain of mere practicality; those who aren’t, can’t be lifted from the practical domain and thus they constantly contradict themselves.
The point is of course that similarities attract each other. To be more accurate, we should say: a given principle triggers the emergence of a given set of characteristics, a given style, certain type of people.
Without capturing the principle (NOT values!!!) there is chaos. As step zero, all fashionable domains must be approached from this angle, including
- innovation and creativity
- leadership and management
- organization (including anything “social”)
- media
- communications
- identity (including positioning)
Perfect differentiation
Is it plausible that only one concept exists for each industry? Only one perfect concept that must be actualized? One for automotive, one for aerospace, one for telecommunication, one for IT, etc.
Or perhaps one for each basic function: one for transport, one for communication, one for making (manufacturing), one for design, one for service, etc?
Let’s assume this is actually possible. What would that mean?
It would mean that whoever could “capture” this perfect concept, aligned the company to it and treated it as the company’s purpose, would be able to truly differentiate themselves; even in industries where differentiation is nearly impossible.
What would a near perfect differentiation mean?
It would mean being right: treating people right (customers, employees, other stakeholders), communicating right, growing right, thinking right.
It would mean acting very different (being right is different!), since the context for action is different.
How would it work?
1. the concept would be articulated; the HOW is so interesting, it deserves more space than this
2. based on the articulated concept, the RIGHT strategy would be developed
3. based on the concept and the strategy, the company would be transformed (if it’s not a new company)
Everything we know and do is an alternative to this.
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The QnA method for problem solving
After so many conversations with clients it seems like a good idea to simply share the premise of the QnA problem solving methodology. Although the following is simply the premise not the complete methodology, I think you may find it useful and it may guide you at solving complex social problems through design. If you give it a try, I’d like to hear your comments, questions, perhaps even cases if you’re willing to share.
The premise:
Reality breaks down to a hierarchy of Questions and Answers. At the top of the hierarchy is the Fundamental Question and the corresponding Answer, defining the Whole. The Questions are hidden while the Answers are visible.
A major mistake is to assume that we must focus our attention on the Solution(s) to the Problem (or worse yet: on the Problem) since the Problem is not the Question and the Solution is not the Answer. The Problem is the (an) Answer to the (a) Question. We must focus our attention on the Question. Once defined, the Question –assisted by our Thinking- “selects” the Answer elevating our Awareness to the whole reality, away from partial reality, which is essentially the definition of Illusion.
At this stage not only do we see our original problem and a range of possible solutions in perspective, but we also see the way of repairing or transcending the existing system that necessitated the changes in the first place.