Nokia, RIM, Yahoo, HP: executives shooting in the dark
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!
Why change, when I am doing well?
There are two types of changes in a career setting:
- change born out of necessity
- change born out of an internal vision
Some positions should never be filled by people who want in because of their conditions: unhappy with current boss, job, etc., needs more money, being bored, etc.
In a sense no top positions should be occupied by such people.
There are of course top positions that don’t list internal vision in the job description but this can’t be an excuse for people who see what needs to be created to just take a number and comply with mediocrity.
http://www.prakhsis.com/contact.html
Changing who you are…
Simple truths often get lost in the noise so it’s good to reinforce them once in a while .
It’s not about changing who you are but about becoming who you are. Changing who you are is impossible (A will never = B).
It’s about getting rid of who you are not!
Inevitably who you are not manifests itself in
- illusions &
- attachments
in various ways, nowadays perhaps more and more often in a sentimental fashion.
There are a couple of key things:
- rigor in constant self-observation and analysis
- an unshakable will not to compromise oneself for the sake of illusions and attachments
- strength to go against the current (of illusions)
- and a bunch of other things
All this with awareness which is the most important factor in the whole thing. This awareness does not need something to be aware of, it does not come from knowledge, but knows: himself.
…”wisdom is the ability to diffentiate”.
The misfits
PR and sales guys talk a lot
search guys are networkers
marketing, branding, advertising guys are creative , but they have no grip on financial reality
IT guys are geeks (socially awkward)
finance guys are not creative (or too creative)
HR and purchasing guys are bureaucratic.
I think the key is control; in other words: control over talents and skills.
Control could be exercised by counter balance:
the outflow of ideas could be controlled by silence and listening,
meeting a lot of people maybe balanced by distance,
focus on numbers by focusing on people,
the maintenance of the system by breaking down barriers,
focus on coding by …. just about anything: people, nature etc.
Without this balance and control we have mediocre specialists, boring stereotypes.
E.g.:
The best IT specialists I know are passionate surfers, golfers, extreme sports guys who are also always full of business ideas,
the best finance guys I know are trying to re-define industries,
the best marketing guys I know are challenging CFOs,
the best entrepreneurs are highly intellectual,
the best CEOs challenge academia,
the best VCs & PE guys are the best integrators,
etc, etc.
The best is always an anomaly.
http://www.prakhsis.com/contact.html
The future of consulting
The future of any consulting field according to the visionary thought leaders involved in them will unfold according to the following rough pattern:
- we’ll become more and more strategic
- we’ll become less and less specialized
- eventually we’ll advise boards and CEOs directly
This of course applies to consulting fields that attract a lot of visionaries: marketing, branding, PR, HR, while it seems to be less relevant in consulting areas like IT and finance (not accusing of course consultants in these fields with lack of vision).
The future of consulting according to visionary clients:
It should become more and more specialized: I need the right guy for the right job/problem; we have tons of vision around here.
If this is really a trend, it means that specialists will work with visionary clients and visionary consultants with specialist clients.
Implications:
a. since visionaries are in minority and they are integrators, this means that visionaries in industry ( non – consulting) will have greater chances to prosper
b. since most specialists are not visionaries and not integrators this means that specialist in industry (not consultants) will only prosper if they are able to trust visionary service providers
Scenarios “b.” is clearly more difficult; exponentially more difficult and crucial: in this scenarios visionary consultants help with differentiation and/or break-throughs!
“Fair is not a good deal”
At least it often isn’t perceived to be.
Maximizing benefits is a mindset that often perceives fair to be a threat.
This mindset always thinks short term, it is mechanical and it thinks in opposites: it operates on an either or basis. Either with me or against me. If I don’t get everything, I get nothing. I am happy or I am pissed.
The will and the ability to create fair typically comes from a mindset that thinks in analogies or unity.
Ironically the “gray area” was invented by binary minds (feeling lost), while black and white clarity is characteristic to an intelligence that’s able to differentiate: between truths and half truths, shades of gray, etc.
http://www.prakhsis.com/contact.html
Loyalty
I am always entertained by how egos get bruised when (expected) loyalty gets compromised.
The guy in a management role acts hurt when one of “his” top players acts against his interests, or is just not grateful for the chance of being on the team. The vendor just can’t get it when the client moves on; after all he did for her! Etc.
Individuals have absolutely no ground to expect loyalty from each other. The foundation of true loyalty is always supra-individual: principles or values; from another aspect: superiority, since the foundation of vertical differentiation may only be supra individual faculties.
When loyalty is geared towards individual or sub-individual faculties the style elements are always inferior: impulsive, uncontrolled, dishonest, opportunistic, manipulative, suspicious, fearful, etc.
Past examples of true loyalty include that towards the principles of royalty (intellectual and spiritual dominance, control over power, etc.), the principle of virility (independence, detachment, sense of purpose), the principle of wisdom (differentiation).
Current examples of false loyalty include that towards various forms of money, profit oriented institutions and positions/titles therein, character traits (be it positive or negative), or behavior that is driven by a sense of sin, self deprecation or sentimentalism.
How to use anomalies – the expanded space
When the concept is checked, double checked, cross-checked, when it is crystal clear and approved, when the plans are in place, the tasks are laid out and it’s time to rock&roll, someone stands up and says: I don’t get it.
Maybe not literally, maybe with his/her actions or passivity. Everybody is aligned there is just this one or two guys…
What do you do?
The conventional way is the quick draw: confront the issue head-on: explain, perhaps ask how they’d do it different, explain again and if there is no improvement, get rid of them.
In this stage typically it goes about people who seemingly can’t add anything valuable to the process itself (if they could, they would already have). So the conclusion is relatively quickly drawn: the guy is not that bright, doesn’t belong to this project, etc. ; this maybe so. BUT
this is a clear anomaly, and you should not walk by anomalies: they could be viewed as windows to the truth.
Stop to reflect! Take time out! Take the guy out! Dig! What drives his resistence may not even be connected to the project, the proccess, etc. What drives his resistence may very well be connected to you!
Horizontal digging: don’t focus on the issue, look elsewhere. Dig with engaging conversation.
If you can’t produce results with this, you will probably remove these guys but always keep the perspective: there is typically way more depth under the surface that is perceivable at first glance.
Change the focus of your vision way behind what’s apparent, and operate continuously in this expanded space from a central position, observing events as intimately connected to and influenced by you.
Executive Search in Central Eastern Europe – basic overview of challenges
Executive search firms face a special situation in CEE: these markets don’t fit the classical search model. Below are 3+1 factors supporting this observation.
1. Markets here are fundamentally different from those in North America and Western Europe.
a. Multinationals that are present in the region are mostly managed by expats, with a board outside of this region. These operations don’t create strategies, just execute them; at best they create regional strategies, in context of the overall corporate strategy established elsewhere.
b. Most mid-sized companies are based in Western Europe. This means that local managing directors or general managers mostly execute a particular function (running the manufacturing plant, or the sales function, rarely doing both).
c. Other potential mid-sized clients are owned by local families.
2. Searches are run on a lower level. Due to the above market characteristics,
- there is almost no need for board searches, or classical CEO searches. Part of the responsibilities of expats running multies in the CEE is to ensure efficient succession planning: to be replaced by a local when they leave. For more than 20 years, this objective has almost never been achieved, so always a new expat is sent to continue running the business. It is still very common in multies, that a large percentage of direct reports of the CEO is also made up by expats (this being a declining tendency).
- Most retained search assignments are focused on general manager and managing director roles and their direct reports in organziations that range 50-2000 people in size (small and mid-sized companies), as well as on senior manager and director level (below VPs) searches at multies.
3. Markets are diluted. The gap that was left by the lack of classical executive search firms in this market were filled by recruiting companies essentially diluting the market (performing contingency based searches for higher level roles for a fee level that only fits recruiting services) and local search firms who lack global or international capabilities. Some of these managed to expand internationally, thus establishing themselves successfully. The overwhelming majority of new players trying to establish themselves in these markets, readily made price and business model compromises (e.g. working with inexperienced consultants facing the clients), which coupled with the resulting decline of service quality and credibility, further diluted the markets: a new generation of customers now have completely false expectations when it comes to executive search.
Dilution of players: while in North America and Western Europe it is not uncommon that ex chief executives of market leading companies are running search practices, in CEE this phenomena rarely exists.
This dilution of the markets resulted in fee levels that are much lower than the classical search fees.
+1. This last observation concerns the executive search market globally. Due to a number of involutive factors that we have outlined elsewhere, the executive search field has lost considerable prestige globally. Players are increasingly opportunistic and the perceived value has been continuously declining. Since an appropriate vantage point is missing (or disappearing), elitism is almost non-existent.
elitism and pricing
The question of elitism in business is an interesting one. Interesting because it’s paradoxical, to say the least. The only reason why we don’t say that the term business elite is an oxymoron is because there is still room -although rapidly shrinking- for the elite…also in business.
The purpose of business is profit. Profit provides context for the behavior for all players in a business organization. Ultimately the drive for profit determines the decisions concerning both resources and people. To put it in a different light, profit replaced principle as the foundation of one’s actions (be it mental, emotional or physical).
It not difficult to see that profit is fundamentally a quantitative factor. Since quality never originates from quantity, qualitative factors like leadership and value have been “adjusted” to the business setting, which resulted in absurd beliefs like “everybody is a leader”, which is essentially the almost open denial of leadership itself. It would come as absolutely no surprise if the next school of “management thought” openly propagated that leadership doesn’t even exist, and tried to prove from an increasingly inferior context, that it actually never existed.
Leadership is intrinsically elitist. It is not born out of profit driven initiatives.
- everybody recognizes the elite; in a business setting however the general attitude towards them is hostility. The foundation of the behavior of members of the elite is respect
- from the point of view of profit driven players the context that determines behavior is money in its various forms, including revenue, compensation, fees, cost, profit etc.
- from the point of view of the elite money is symbolical. It symbolizes value in its various forms, be it quality time, focused attention, differentiation. The behavior itself is not dependent on monetary considerations, the purpose is not the creation of profit.
With the exception of design, domains of mass production leave little room for elitism and value. Heute Cotoure in fashion, wine or other noble drink creation, food creation, hand made objects etc. maybe the only area in the product domain where elitism could still persist (although these “objects” no longer maybe considered as products in the conventional sense) as long as it doesn’t comply with dominant tendencies that are typically referred to as fashion or fashionable.
If design stays above fashion, it is timeless and such timelessness reflects the style elements of superiority. This is the solution to the “break-through paradox”, and the true foundation of luxury “brands” (the term luxury brand of course is an oxymoron, since luxury means unconditioned, thus superior; brands are driven by the mass, the most conditioned thus inferior factor of all).
In the service domain superiority comes from the vantage point above best practices, thus from an inferior point of view it is always dangerous; it is not dangerous because of the vantage point itself, since the higher doesn’t exclude the lower (meaning that best practices are well known, and better understood by the elite than those who just learned them and use them); the danger comes from the integrity of the elite in that they don’t sacrifice the superior for the sake of the inferior.
When members of the elite -horribile dictu - deal with each other, be it in the service or the product domain, value gets appreciated, which is reflected in the price that is agreed upon – in a way given- and not negotiated.
Trying to “talk down” the price of an elite service or product is an inferior effort.
This can’t be avoided, given that the inferior can’t comprehend the domain of the superior (if it could it would not be inferior), thus it can’t appreciate it.
In the business domain leadership may only come from the elite and it is crucial that the elite maintains relationships with each other in order to maintain the reality of leadership, values and in the end, quality.