Be Decisive – Great Leadership Idea No. 62

Change involves risk, and there will never be enough information to guarantee that you have made the right decision. At some point, leaders must trust their accumulated experience and their gut instinct and seize the moment.

An effective decisions made at the right moment

Making decisions is the defining aspect of leadership. There has never been a leader who made only right decisions. An effective decision made at the right moment is far better than no decision at all.

The most forceful exponent of this school of thinking was probably George S. Patton, the US Army General who led the astonishing armoured dash across France towards Germany after Allied forces had established a beachhead in Normandy, in north-western France, in order to bring an end to the Second World War. Patton had started life as a cavalry officer at a time when men on horseback carrying swords were about to be replaced by men in armoured vehicles carrying firearms. His experiences in the First World War as a captain in the newly-created United States Tank Corps, during which he witnessed the futility of trench warfare, convinced him of the need to keep an attacking force constantly on the move. Patton was convinced that establishing a defensive line was what lost battles and got soldiers killed. “Attack rapidly, ruthlessly, viciously, without rest – however tired and hungry you may be, the enemy will be more tired; more hungry.”  This aggressive, take-the-fight-to-the-enemy approach led to one of Patton’s most famous quotations: “A good plan, violently executed now, is better than a perfect plan next week.”

Even the right decision is wrong if its made too late

Lee Iacocca, President and CEO of the USA’s Chrysler in Corporation in the 1980s offered a modern, corporate version of this philosophy:

“If I had to sum up in one word the qualities that make a good manager, I’d say that it all comes down to decisiveness. You can use the fanciest computer in the world and you can gather all the charts and numbers, but in the end you have to bring all your information together, set up a timetable, and act. [. . .] Too many managers let themselves get weighed down in their decision-making [. . .] at some point you’ve got to take that leap of faith. First, because even the right decision is wrong if it’s made too late. Second, because in most cases there’s no such thing as certainty.”[1

Be Decisive is further explored in 100 Great Leadership Ideas

January 8th, 1976. The first Premier of the People’s Republic of China, Zhou Enlai, dies

Zhou Enlai was Premier of the People’s Republic of China from the moment the Chinese Communist Party achieved power in 1949, following their defeat of the Nationalist government, until his death in 1976. A dedicated and lifelong communist, Zhou Enlai’s political instincts were moderate and progressive. Famous for his punishing work routine, intelligence and subtlety, Zhou worked all of his life to improve the condition of the Chinese people and was to become famous for his diplomatic skills in opening a dialogue with the West after the political conflict created by China’s involvement in the Korean and Vietnamese wars.

Chairman Mao: famines and purges

Throughout all of his time as Premier, Zhou reported to Mao Zedong (often written as Mao Tse-tung), Chairman of the Communist Party of China. Mao had begun his rule of China with a series of vicious purges of opponents. In the late nineteen-fifties, Mao proposed a disastrous programme of agricultural collectivisation and ideologically-driven peasant initiatives, such as a plan to produce steel in makeshift furnaces in villages across China (or for peasants to construct canals without interference from ‘bourgeois’ engineers). Unfortunately, it is only possible to make steel under controlled conditions at consistently high temperatures – something that, ironically, the ancient Chinese had fully understood. Woods were cut down, labour was diverted from agriculture, and the end result was a great deal of nearly worthless pig iron. Local communes over-reported the amount of food that they were producing in an attempt to be seen to be meeting their targets, and were then required to hand a percentage of this inflated amount to the state to feed the cities. The so-called ‘Great Leap Forward’ resulted in a famine that is estimated to have caused the death of between 20 and 43 million people. Mao’s various purges of political opponents, ‘middle-roaders’, intellectuals and recidivists killed millions more.

Mao’s last great initiative, the Cultural Revolution, threatened to plunge China into a state of total chaos.

The Cultural Revolution – ‘Out with the four olds!

Mao decided that the country was in danger of losing its revolutionary zeal. The Party, and the country, must be purged by a brief spell of violent anarchic change, driven by the people. Students, peasants, workers and soldiers were called upon to abolish the ‘Four Olds’: Old Customs, Old Culture, Old Habits, Old Ideas. The Red Guards—a term used for all young people embarking on Mao’s new mission—were offered free travel to anywhere in the country. Exhilarated by their new powers and fired up with revolutionary fervour, they began to take China down the road of mere anarchy.

Tribunals were set up to ‘try’ capitalist-roaders and anti-revolutionaries. Teachers, academics, writers, journalists were attacked; museums, temples and shrines were ransacked; ancient books and works of art were destroyed. There were many suicides and murders. Party members were sent to detention camps, where many died. Future Premier Den Xiaoping was sent for ‘re-education’, ending up as a worker in an engine factory (he was later rescued by Zhou and brought back into politics). Throughout these terrifying times, Zhou trod a difficult path, rescuing those whom he could, but not stepping so far out of line that he became an easy target for the Red Guards, though there were virulent campaigns against him. Zhou closed museums to protect their contents and drew up lists of temples and shrines that were to be preserved as national treasures. To save politicians, his favourite ploy became the despatch of those at serious risk to ‘Hospital No. 301’ – a hospital reserved for high-ranking party members – citing some supposed illness of theirs. They were to emerge, years later, miraculously cured.

The Gang of Four

During the Cultural Revolution, Mao’s last wife, Jiang Qing, had become a power in her own right at the head of the infamous Gang of Four. At the height of the chaos, Red Guards were given the political sanction to seize weapons from the army – the ultimate symbol, after all, of hierarchical authority. They began to overthrow local governments and to take control of factories. Rival Red Guard factions began to shoot each other with liberated weapons. The Gang of Four were ecstatic: here was true people’s power, unmediated by any Party, government or military involvement.

Zhou presented the figures on the economy to Mao. Production was collapsing; the Chinese economy was facing ruin. Mao called on the People’s Liberation Army to end the Cultural Revolution. A whole generation of dangerous Red Guards were sent off to work in the country in the charmingly named ‘Down to the Countryside Movement.’

Beloved Premier

With Mao’s health declining (though he was to outlive Zhou by eight months) the Gang of Four remained in effective power, and the Cultural Revolution is deemed to have continued up until Zhou’s death in 1976. After his death, the traditional annual day of mourning became the occasion for a massive national show of respect for Zhou. The Gang of Four cleared Tiananmen Square, where huge crowds had gathered, and arrested Zhou’s old political ally, Deng Xiaoping. But the Gang’s power was broken by this demonstration of national feeling. Deng was to rise to power in 1978; the Gang of Four were arrested, tried and imprisoned. All served their sentences and were released, though Mao’s wife, Jiang Qing, committed suicide in 1991. A year after Mao’s death in 1976, Deng Xiaoping became the effective leader of China. He denounced the Cultural Revolution, launched the liberalising ‘Beijing Spring’ and opened China to foreign investment and international markets. Zhou Enlai became increasingly revered as the ‘Beloved Premier’ who had worked to mitigate the previous regime’s worst excesses and had doggedly persisted with his own agenda of laying the foundations for future modernisation.

Zhou Enlai is featured in Section 6 of History Lessons: Making Things Happen

Apple strikes deal with Microsoft – forging strategic partnerships

After their death, people’s reputations begin to eclipse the real facts of their lives. ‘Steve Jobs fired as Apple chairman’ and ‘Steve Jobs strikes pragmatic deal with Microsoft’ are not the sort of sub-heads you find in most of the obituaries.

Apple versus Microsoft

Steve Jobs was the genius who founded Apple Inc, the quirky, creative corporation that was (in the popular imagination) the corporate antithesis of everything that Microsoft stood for. Jobs, in this version of reality, started Apple in a garage in Silicon Valley with his friend Steve Wozniac (that much is true, and worthy of legend) and built it into the multi-billion dollar success story that it is today. Driven, uncompromising and motivational, Jobs inspired his organisation to ever greater heights of creativity, driven by his own remarkable vision of how things might be, rather than how things currently were.

I wouldn’t want to argue with much of that analysis, but I wonder how many people now remember that Jobs was effectively fired from the company that he had created (partly because of sliding sales but mainly for having become the chairman from hell, and a serial corporate plotter) and that when he achieved the astonishing feat of becoming the CEO of Apple for a second time, he set out to do the unthinkable – to make a partnership with Microsoft. Apple staffers booed Jobs when he made the announcement at the Macworld Conference in Boston in 1997. The fact that Apple was nearly bankrupt and that the deal was a lifesaver didn’t fit with their world view, in which Apple were the good guys and Microsoft was the evil empire.

A keyboard and a screen!

Steve Jobs founded the consumer electronics corporation, Apple Inc, with Steve Wozniac in 1976 and launched the Apple I Personal Computer Kit: an assembled circuit board. The next product, Apple II, represented a huge leap forward. It was the world’s first commercially successful personal computer, incorporating such radical features as a keyboard, a screen, a case and twin floppy disc memory drives. The new company went public in 1980, generating more capital than any stock market launch since the Ford Motor Company in 1956, and creating about 300 new millionaires overnight. In 1985 Steve Jobs was removed from managerial duties in a boardroom power struggle with John Sculley, whom Jobs himself had appointed as Apple’s CEO, and resigned from the company that he had created.

Eleven years later, in 1996, when Job’s subsequent venture, neXT Computer, was bought by Apple, Jobs re-emerged as Apple’s CEO. (Along the way, Jobs happened to have bought a little company called The Graphics Group, which he turned into Pixar – but that’s a different story).

With Apple struggling and near bankruptcy, one of Jobs’s first actions was to arrange a strategic partnership with the software giant Microsoft, with whom Apple had been engaged in a drawn-out and costly series of legal wrangling over patent rights. In 1997, at the Boston Macworld Expo, Steve Jobs took to the stage to deliver one of his famous keynote speeches. He stunned his audience—for whom the world had become defined by the struggle between the underdog Apple and the increasingly all-powerful Microsoft Corporation—with the following announcement.

A meaningful partnership

‘Now, I’d like to talk about meaningful partnerships’, said Jobs.

‘Apple lives in an eco-system and it needs help from other partners; it needs to help other partners. And relationships that are destructive don’t help anybody in this industry as it is today. So during the last several weeks we have looked at some of the relationships, and one has stood out as a relationship that hasn’t been going so well, but that has the potential, I think, to be great for both companies. And I’d like to announce one of our first partnerships today, a very very meaningful one. And that is one with Microsoft.’

As he began to summarise his announcement, Jobs said:

‘We have to let go of this notion that for Apple to win, Microsoft has to lose . . . the era of setting this up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy and [. . .] about Apple being able to make incredibly great contributions to the computer industry, to be healthy and prosper again.’

The deal set up a number of arrangements for the cross-licensing of patents. It guaranteed that Microsoft would continue to release Microsoft Office products for the Mac platform. Apple undertook to make Microsoft’s Internet Explorer the default browser on all new Mac products. Microsoft also bought $150m of non-voting Apple shares at market prices and undertook not to sell them for three years. Microsoft now had a vested interest in seeing Apple’s share price increase, rather than collapse. When the market heard about the deal, Apple’s stock rose by 35%.

Steve Jobs was a dreadful manager – visionaries generally are. But he was certainly a great leader.  Forging strategic relationships – with major competitors if necessary – is one of the hallmarks of great leadership.

These ideas are explored further in chapter 98 , ‘Look for Partnerships’, in  100 Great Leadership Ideas .

Cameron’s EU stance shows decisive leadership

Whatever you may think about the politics of David Cameron’s decision to play the ‘no’ card at the European Union summit by vetoing moves to use the current European treaty to endorse greater fiscal unity of the eurozone nations, that decisive moment has had one undeniable effect: Cameron’s leadership credentials have suddenly received a massive boost.

It is far from clear whether the decision was even politically wise: he has delighted the Eurosceptic wing of his party, but put further strain on the relationship with his coalition partners, the Liberal Democrats, and handed the Labour opposition a golden opportunity to blame just about anything that goes wrong in Britain’s relationship with Europe for the next several years on Mr Cameron. His coalition government may fall, in time, as a result of this decision. The anti-Euro wing of the party, scenting European blood, may run amok and wreak political havoc, creating who knows what seismic shifts in the UK’s political landscape.

That most terrifying of leadership decisions – a brave one
Cameron’s lone decision has without doubt removed Britain from ‘the heart’ of Europe (if she was ever anywhere near this vital organ, which is doubtful: Britain has never been a fully signed-up member of the Franco-German vision of Europe). It has raised the spectre of the dreaded ‘two-speed’ Europe, with Britain stuck, as you will have guessed, in the slow lane; outside the debating chamber; left on the sidelines – select your own favourite metaphor.

From a leadership perspective, none of this matters. Cameron has taken his first steps towards a place in history as a leader of note. His decision was that most terrifying of all leadership decisions: a brave one.
There are some very imaginable scenarios in which Cameron’s decision is seen as having been so disastrous that Britain is forced to go back to Europe, cap in hand, say sorry, and ask if we might be allowed to carry President Sarkozy’s and Angela Merkel’s bags for a decade or so until they decide to be even a little bit nice to us again – in which case Cameron will be obliged (or forced) to step down and let somebody else do the grovelling. I’m not suggesting that this is likely scenario, but it is one possible outcome of decisions as brave as this one.

Even the BBC’s political editor, Nick Robinson, thought that Cameron’s threat to use Britain’s veto was a bluff: as he says, “few – including, I ought to say, me – believed that he’d actually do it”.

Up yours, Delors!
This is the point. Cameron, for better or for worse, for richer or poorer, has demonstrated that he has the bottle to be decisive, and the guts to be unpopular. In fact, ‘unpopular’ is too weak a word to describe what Cameron and the country he leads now are in most of Europe: ‘Does the UK still have a place in Europe?’ asks Le Figaro, one assumes rhetorically. ‘Auf Wiedersehen, England!’ says Spiegel Online, with a discernible smirk. President Sarkozy insultingly ignores Cameron’s tentatively extended hand of greeting on the morning after the fateful veto.

Well, ‘Up yours Delors!’ as The Sun newspaper’s famous headline said in 1990 of another ‘Froggie Common Market chief’ (their words, I assure you). If there’s one thing most Brits can unite behind, it’s having our leaders snubbed by foreign leaders who don’t understand exactly how special and important we are – an experience that is likely to become increasingly familiar, especially in the wake of Mr Cameron’s brave decision.

Nevertheless, what is it that we actually want from leaders? Decisiveness; knowing where they stand.

Do we want them to be popular? Not necessarily; in fact, we rather like being able to grumble about a leader’s tough decisions while admitting, grudgingly, that they might be right after all. And of course their decisiveness means that we can blame every thing on them if it all goes wrong.

Does history remember the uncontroversial leaders; the jolly nice ones; the well-meaning compromisers? It does not.

European leaders may now choose to despise David Cameron, but they cannot ignore him. Some countries, facing the drastic measures required to be part of the increasingly regulated and centralised European may even chose to join Britain in its new semi-detached (or just plain detached) relationship with Europe as the champion of a more lightly regulated, ‘Anglo-Saxon’, free-market approach.

Mr Cameron has taken a bold step towards becoming a leader of note. Commentators will argue about the political wisdom of what he done for the next decade or so. This is exactly my point: since his decisive moment, Cameron, come what may, has become a leader to be reckoned with.

Options and consensus – Great Leadership Idea No. 35

Change is implemented more quickly and successfully when alternative options have been discussed in advance, and when the team as a whole has reached a consensus decision on the right way forward. Consensus also helps ensure that the people who are closest to the likely results of a decision get to make their voices heard.

The idea

Sir John Harvey-Jones, chairman of ICI from 1982-1987, worked closely with Japanese organizations and saw the benefits of their more consensual approach to decision-taking. ‘Those of us who have worked with the Japanese and who admire their business achievements, as I do, know how long it takes the Japanese to reach a decision. One is lulled into a totally false sense of security by the apparently endless debate and the thoroughness of the involvement of people at every level of the organisation in the decision, because when the action stage comes, they move like greased lightning.’

John Mackey, CEO of American natural and organic product retailer, Whole Food Market, advocates consensus decision making. ‘I almost never make a command-and-control decision’, says Mackey. ‘I make a ton of decisions where I consult with people I trust, with the people involved.’ Mackey’s National Leadership Team of 24 people often vote on decisions. Employees at every store meet monthly in search of general agreement. Even hiring decisions are made by consensus: new employees join a team for a trial period and the team votes as to whether they are employed; a two-thirds vote in favour means they get to stay. Since teams’ bonuses depend on their productivity, team members have good reason to choose their colleagues carefully.[1]

The principle of consensus-seeking is featured in The Toyota Way: a set of principles set out by the Toyota Motor Corporation in 2001 to describe the system of values that should underpin every aspect of corporate behaviour. Principle 13 talks about consensus:

Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). Do not pick a single direction and go down that one path until you have thoroughly considered alternatives. When you have picked, move quickly and continuously down the path. Nemawashi is the process of discussing problems and potential solutions with all of those affected, to collect their ideas and get agreement on a path forward. This consensus process, though time-consuming, helps broaden the search for solutions, and once a decision is made, the stage is set for rapid implementation.

In practice

Leaders tend to believe that their role is to consider the options, take the advice of colleagues and experts, and then personally to make a decision. In a consultative process that involves the wider team, issues are debated by large sections of the organization. Likely problems, consequences and wider issues are explored in depth. Once the organization has reached a consensus decision, the thorough understanding of the process by the team as a whole, and the prediction and avoidance of likely difficulties, greatly speeds up the process of implementation.

Options and consensus is further explored in 100 Great Leadership Ideas

Give people autonomy – Great Leadership Idea No 31

Successful leaders offer substantial autonomy to members of the team and to parts of the business. Individuals are empowered, and respond to this; decision-making is de-centralised, bringing more opinion and directly relevant experience into the process and, ideally, bringing decision-making closer to the customer. Whole units can be allowed to take control of their own destiny while remaining ‘part of the family.’

The idea

Azim Premji is still chairman of the global information technology services company, Wipro, based in Bangalore, India. He took over the company in 1966 at the age of 21, following the death of his father, at a time when the company’s product range was based largely on the cooking oils and fats on which his father had founded the business. In the 1980s, Premji diversified the company into toiletries and lighting products and then into computer manufacture and software services. Wipro is now a global IT services provider.

In an interview with Ravi Aron, Professor at Wharton University of Pennsylvania, Premji says this:

“The most important thing you must appreciate is that, with the reorganization, we tried to bring Wipro’s leadership closer to the customer. In the process, we tried to de-layer the organization and empower our business leaders with a much higher degree of P&L and growth responsibility. That is why we removed an entire layer which was there previously. Our executives are seasoned enough in their jobs and they have performed long enough in their roles to be confident that they can deliver results through the new structure.”

Premji created a new ‘vertical’ structure that organised the company into units such as Telecom Service Providers and Enterprise Solutions.

“Each vertical is like a self-contained business . . .  Though they work under a common structure, with resources such as Finance, HR, Quality and Marketing, each vertical has people who represent these functions. So, in effect, each vertical is like a separate company . . . It all goes back to leadership. It speeds things up and gets decisions made faster. It empowers people more, and it allows them to further empower those who report to them, because their jobs have suddenly become much more responsible . . . I hope the reorganization will make Wipro more agile, because it’s one thing to design a new organizational structure, and quite another to execute well. We believe that the new structure will help us execute our strategy well.”

In practice

Trust colleagues, and give them as much scope for independent action as possible. Consider giving a high degree of autonomy to devolved operations: give them overall objectives and allow them to deliver results within these parameters. Decentralize decision-making so that many opinions and wide experience influence the organization’s decisions—which also reduces risk. Move decision-making closer to the consumer, making the organisation more responsive and more agile.

Encourage real debate is further explored in 100 Great Leadership Ideas

Zero tolerance and the staff kitchen – Great Leadership Idea No 60

If the tap in the staff kitchen is broken and nobody mends it, colleagues quite quickly begin to draw a number of very negative conclusions—in particular, that management isn’t particularly bothered about the welfare or comfort of the staff and that, since management don’t fix things that are broken in the staff’s day-to-day environment,  it is not reasonable to expect staff to worry about things that are broken elsewhere in the organisation: like computer systems, or production lines.

The idea

In a famous paper called ‘Broken Windows’, the academics and political scientists, James Q. Wilson & George L. Kellling set out the idea that a failure to mend small things in communal area sends out a signal that nobody cares. Even normally well-behaved and law-abiding members of the community may join in destructive behaviour as things begin to degenerate. “Social psychologists and police officers tend to agree that if a window in a building is broken and is left unrepaired, all of the rest of the windows will soon be broken. This is as true in nice neighbourhoods as in run-down ones. Window-breaking does not necessarily occur on a large scale because some areas are inhabited by determined window-breakers whereas others are populated by window-lovers; rather, one unrepaired broken window is a signal that no-one cares, and so breaking more windows costs nothing . . . Untended property becomes fair game for people out for fun or plunder, and even for people who ordinarily would not dream of doing such things and who probably consider themselves law-abiding.”

When Richard Baker took up his role as CEO of the Boots Group in 2003, he started work at 7 am each day in his first weeks by visiting three Boots stores in quick succession; later he spent two whole days on the shop floor at a branch in Loughborough.  At every opportunity, he asked staff for their opinions as to what was working and what was not. The exercise gave him twenty-one significant ideas with which to begin his stewardship. Some ideas, like a member of staff’s insight that some Boot’s prices were so high that staff bought them from other outlets despite their staff discount persuaded him to review pricing policies. But he also learned at Loughborough that the tap in the staff canteen had stopped working years before and never been fixed. Mending a broken tap was an important symbol of a wider problem. ‘For years,’ says Baker, ‘Boots invested any profits in other parts of the group but not in the stores. Everything looked neglected. We reversed this and invested in the stores. Our colleagues saw we were doing the right things and the mood in the company quickly improved.’

The practice

Small things matter—to a surprsing extent. Colleagues may even be unwilling to embrace major new strategies or initiatives simply because some minor but significant aspect of their working life convinces them that they are not valued. Fixing the small things has a disproportionate effect. A small amount of effort and expenditure convinces people that the leadership does, in fact, care.

Encourage real debate is further explored in 100 Great Leadership Ideas

Giving colleagues reasons to feel proud: the Greg Dyke Way

In an earlier blog Greg Dyke and John Birt: lessons in leadership I explored the dramatic difference in leadership style between two previous Director Generals of the BBC: John Birt, and his successor, Greg Dyke.

I used this case history recently in a morning session on leadership development at Oxford Saïd Business School, and it reminded me of how dramatically—and how remarkably quickly and effectively—Greg Dyke changed the mood at the BBC when he first took over. It also reinforced what a tragic loss it was for the BBC when Dyke became a victim of the political shenanigans surrounding the infamously (and allegedly) ‘sexed up’ Labour government dossier about Saddam Hussein’s Weapons of Mass Destruction published in the run-up to the War in Iraq (see The Hutton Inquiry).  Dyke resigned, having failed to gain the support of a supine board of BBC Governors. The BBC had been accused of showing ‘defective’ editorial management processes for having allowed a journalist to broadcast accusations against the government, despite the fact that these accusations seem to have been well-founded and (dare one say it?) true.

As Dyke said after his resignation, ‘This report casts a chill over all journalism, not just the BBC’s. It seeks to hold reporters, with all the difficulties they face, to a standard that it does not appear to demand of, for instance, Government dossiers.’

But I digress. These are the key conclusions that I drew in my earlier blog about the leadership lessons that could be drawn from ‘The Greg Dyke Way’.

Don’t get obsessed with the planning

Some leaders become obsessed with planning. Planning is important, but there is never a perfect plan. In the time that it takes to keep polishing and perfecting the plan of action, things will have moved on, events will have altered the general scenario and—perhaps most importantly—opportunities will have been wasted.

Plan enough, and then follow your (well-informed) instincts. More planning won’t help you find the answer: you may be right and you may be wrong, but if you don’t actually do it—and do it at the critical moment—there will never be an outcome for you to learn from.

Efficiency has a purpose: explain it

As with planning, some leaders become obsessed with efficiency. Organisational efficiency and cost-savings are essential, but they are only the means to an end. Most of your colleagues will experience them as pain, not gain. Colleagues need to understand the long-term purpose of this pain; they need to agree, at a fundamental, emotional level, that the pain is worth it. This can only happen when there is high-quality, consistent and persistent communication from the leader about the purpose of the changes.

When colleagues truly understand what that purpose is, and understand the necessity of a given course of action, they will undergo substantial upheavals and even the pain of job losses with remarkable tolerance. More than that, they will put their shoulders willingly to the wheel of change. ‘Efficiency’ that is apparently for its own sake is meaningless and is quite rightly resisted and resented.

Give people a vision that makes them feel good

Forget about vague aspirations and grand slogans: colleagues need something fundamental, concrete and realistic that will get them out of bed and excited about coming to work; something simple and motivating that they can hang everything else on; something that informs their every decision and makes them feel good about their working lives.

Some good examples might be: pride in the organisation’s overall achievements; feeling part of something bigger than oneself;  feeling that one is a valued part of a greater cause; the pleasures of camaraderie; the rewards of shared endeavour.

Tell a story; paint a picture

Teams need detail to help them ‘colour-in’ the broad vision. Highlight the strengths and successes of your organisation: dig into the archive, find good stuff and spread it around. People are far more likely to remember a good story or an inspiring video than they are to remember your words—no matter how well-crafted and inspirational they are. Find some compelling images and ideas that will stick in people’s minds. Engage people’s emotions. Give them that reason to come to work.

Touch a chord

All change involves doing something differently, and we all resist change. People don’t go the extra mile because of the compelling logic of our arguments—much as we would like to believe that they do—they do something different only if we have managed to touch some important chord that resonates in their real lives. Show colleagues that the organisation to which they devote much of their waking hours plays a significant role in the world; remind them that their contribution is essential and valued. Get them involved.

You don’t need to be an expert in BBC corporate history to get the drift of the initiatives that Greg Dyke used to get his colleagues on side: ‘One BBC’; ‘Making it Happen’; ‘The most creative organisation in the world’; ‘Cut the Crap’.

You get the picture.

Leadership and courage: Napoleon returns from exile in Elba

One of the defining aspects of leadership is courage: having the bravery not only to stand up and ask people to follow but also to put one’s head over the parapet. It is only in the military that this is a literal and life-threatening process; in modern business, it is merely career threatening. When Chief Executive Officers make a choice of direction and ask the organisation to follow them, they are staking their careers on the outcome. When leaders at lower levels of the organisation ‘stick their necks out’ for something that they feel strongly is right, but which goes against accepted wisdom, they are doing something equally brave.

Napoleon in exile: too close to home; too lightly guarded

When Napoleon Bonaparte made his dramatic return to France from exile in Elba in 1815, he was uncertain of the reception that the French people would offer him. Napoleon had finally been defeated by another alliance of the most powerful states in Europe as France struggled to recover from Napoleon’s disastrous invasion of Russia. His famous Grande Armée had been literally wiped out on the appalling retreat from Moscow (of the unprecedented army of 600,000 that invaded Russia in 1812, only 93,000 returned to France). Napoleon quickly built a new army, but his enemies – quite rightly – scented blood. After his defeat, Napoleon had been exiled to Elba: too close to home, too lightly guarded. After less than a year on Elba, Napoleon escaped and set sail for France. He was re-entering a country that could very easily have decided that it was as heartily sick of him as it was of his murderous wars.

His initial reception at the coast of Provence (in what is now the heart of the glamorous French Riviera, but was then a very rural backwater) was distinctly chilly. Many Provençals were supporters of the restored Bourbon monarchy, represented by the monstrously fat Louis XVIII, previously Comte de Provence. Napoleon headed north with the 1,050 troops that he had most unwisely been allowed to retain as his garrison on Elba, marching his little band up into the French Alps, towards the more cosmopolitan, and hopefully more republican, city of Grenoble.

‘Your Emperor is advancing towards you: if you fire he will be first to fall.’

Louis XVIII’s new government, terrified at the news that the great man was back in France but certain that he could quickly be brought to heel, had already declared that it was every soldier’s duty to shoot Napoleon on sight. As Napoleon’s band approached Grenoble, a royalist General made a stand with his troops at a narrow pass approaching the city, near the village of Laffray. Napoleon was determined that his return to power would be a bloodless coup; that the people of France would be seen to have welcomed him back with open arms. A messenger was sent to the troops at Laffray. ‘The Emperor is on the point of advancing towards you.  If you fire he will be the first to fall and you will answer for it to the whole of France.’

The government troops took nervous aim as Napoleon’s few Polish lancers rode towards the pass and then wheeled aside to reveal the veteran soldiers of the Old Guard. These had been the shock troops of the imperial Grande Armée, thrown into battle at a decisive stage to break the enemy line. Utterly fearless and fanatically devoted to the Emperor, they had accompanied Napoleon into exile and had returned to bring him back to power. On Napoleon’s orders, the Guard advanced with their muskets reversed, with Napoleon himself at their front. The commanding officer of the government troops gave the order to fire. The soldiers disobeyed and refused.

‘If there is one of you who would kill his Emperor, here I am.’

Napoleon continued to walk on, to within easy range of the guns.  ‘Soldiers, I am your emperor.  Know me!  If there is one of you who would kill his Emperor, here I am’.  He threw open his famous grey greatcoat, inviting a shot. It was more than the government soldiers could bear; they abandoned their weapons and ran towards the invaders shouting ‘Vive l’Empereur!’ They tore the white royalist cockades off their shakos and threw them to the ground. They clamoured around Napoleon, reaching out to touch him, weeping. Their great leader was back amongst them.

The hapless officer offered his sword to Napoleon and may well have feared the worst. Instead he was swept into a forgiving embrace. From this moment on, Napoleon’s pitiful invasion began to turn inexorably into a victory parade towards Paris: he was to enter the capital only twenty days later, carried into the Tuileries on the shoulders of an adoring army. Louis XVIII and his aristocratic supporters had already left the country.

The 100 Days

Napoleon, having swept back to power, was to have the famous ‘100 days’ in which to attempt to prevent the Allies from defeating him once more and reinstalling Louis XVIII.  He showed much of his previous brilliance and capacity for sheer hard work, driving his Minister of War, the faithful Marshal Davoud, to distraction as Napoleon galvanised the nation for yet another decisive struggle. The British and the Prussians were massing troops in Belgium; Napoleon attacked the Prussians before they could join forces with the Duke of Wellington’s British army – seeking , as ever, to destroy his enemy piecemeal before they could assemble decisive force against him. He beat the Prussians, but allowed himself to be persuaded that they would retreat back down their lines of communication. The veteran Prussian commander, Marshal Bluchner, had promised to meet up with Wellington. Ignoring the advice of his Staff, and fortified with gin and garlic, he marched to meet Wellington, as promised. The Battle of Waterloo was won, and Napoleon’s remarkable last attempt to regain power was lost.

Napoleon is an outstanding example of a leader who was meticulous in his planning: he had a formidable intellect and a remarkable memory; he thought through all of his major endeavours in minute detail. But the return from Elba was always a desperate throw. In decisive incidents such as that at Laffray, planning goes out of the window.

In moments of crisis, great leaders stand up fearlessly, asking people to follow them.

Napoleon Bonaparte is featured in Section 3 of History Lessons: Doing the Planning

Louis Gerstner’s vision for IBM: the customer is always right

In my blog ‘Gerstner and the IBM turnaround: vision or execution’, I wrote about the life-threatening hole that IBM had got itself into by the early 1990s, before Louis Gerstner was persuaded to take up one of the most challenging Chief Executive roles in the history of the modern corporation, and about how Gerstner rather mystifyingly said to the press in his early days with the company that ‘The last thing IBM needs right now is a vision’.  He went on to say, more understandably, that what the company needed was a series of ‘tough-minded, market-driven, highly effective strategies for each of its businesses’.  But the ‘We don’t need a vision’ statement baffled everyone. It also earned him some adverse press comment, as shown in my earlier blog: “IBM stock, down 6% since Gerstner took over, has done nothing because he’s done nothing.” “Does cost-cutting amount to a strategy for survival?” “George Bush may have called it the vision thing. Others may be calling it the ‘lack-of-vision’ thing.”

Change without vision?

With hindsight, perhaps none of this matters. Gerstner did an astonishing job, turning around a company that appeared to be in terminal decline. In 1993 IBM had declared record losses of over $8 billion.[1] The PC revolution and the accompanying client/server revolution (whereby desktop computers—‘clients’—were supplied with data and applications back-up from more powerful, remote ‘servers’) had not merely undermined IBM’s position as the preeminent supplier of integrated solutions to large corporations but had, on the face of it, taken away its reason to exist. IBM was declared to be a dinosaur about to enter an evolutionary dead-end. Yet Gerstner took control of a company that was fighting for survival and brought it back to vigorous health.  So who cares about the vision thing?

Well, for one thing, if Gerstner really did achieve such a dramatic turnaround without having a clear vision of where he was headed, then a lot of leadership textbooks will need to be rewritten. It is generally accepted that leaders can only bring about significant change if they offer people a different, believable and desirable vision of the future; that the people who are being asked to do the changing have to have a clear idea of what all of the grief and pain is for. If there was no new vision for IBM, then what Gerstner was effectively saying was, ‘Don’t worry guys, I’m going to carry out a classic rationalisation and restructuring of the company and save us a bunch of money so that we can carry on as before, only profitably.  Lots of people will lose their jobs but—hey—that’s business. Now let’s get started.’  This is the scenario implied by the journalist who asked, quite correctly, “Does cost-cutting amount to a strategy for survival?” No, it does not. A programme of rationalisation and restructuring is a management process. It doesn’t set out to change the fundamentals of a business, it just improves efficiency. So was Gerstner really just ‘doing a McKinsey’? Was he just knocking the business back into shape without making any fundamental changes to its goals, direction, philosophy and culture? Is it really imaginable that IBM’s $8bn hole was caused merely by a lack of efficiency? The answer is an emphatic ‘no’. Gerstner changed the very culture of IBM. Indeed, reflecting on his time with IBM some years later, he wrote: ‘I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.’

I speculated in my earlier blog that Gerstner may have had several things in mind when he made his provocative statement. There were several possible explanations, I felt, but they boiled down to one of two options: either the long-term vision for IBM could wait until Gerstner had secured its short-term survival (and Gerstner couldn’t even be sure what that vision should be until he had done all of the unglamorous stuff needed to keep the company alive) or Gerstner did, in fact, have a vision for the future direction of the company, but he didn’t want people to get distracted by philosophical ideas about ‘new visions’ before they had sorted out the essentials. Gerstner himself says that no one paid enough attention to the fact that he said ‘The last thing IBM needs right now is a vision’—but this still brings us back to my two fundamental options; either Gerstner knew where he wanted to take the company, but would let people know in good time where all the changes were headed, or he himself didn’t know where they were headed, but would figure it out later.

And if it was the latter—that Gerstner was hoping that the vision would become clear to him as the restructuring progressed, then we are going to have to start rewriting those textbooks again: a major change programme that isn’t held together by an overriding vision is supposed to unravel very quickly, as all of the changes done to the various parts fail to add up to something that is greater than the mere sum of its parts.

Gerstner’s guilty secret – a  new vision for IBM

Well, guess what? Gerstner did have a clear vision of the fundamental changes that he wanted to make to IBM, of the different that he wanted to make to its very culture, and he was giving his key staff very strong indications of this new direction from day one.  He himself rather sheepishly defended ‘The last thing IBM needs right now is a new vision’ by saying that he had come to realise that his new vision for IBM was actually a bit like taking the company ‘back to its Watson roots’. (Thomas J. Watson, Senior became President of IBM in 1915 and handed over to his son, Tomas Watson Jr., in 1952. Thomas Watson Jr. led IBM to become the dominant force in the global computing industry. He retired in 1971. In 1998, he was included in Time Magazine’s 100 Most Influential People of the 20^th Century.) So what’s wrong with announcing that you are going back to the Watson days? Gerstner thought that people might laugh. He also suggests that he didn’t want to tell the company’s competitors about the new vision for the company.[2]

So, rightly, or wrongly, Gerstner declined to announce to the world in his early days at IBM exactly what was his vision for the company. But he sure as hell had one (which is a relief for the writers of leadership textbooks.)

And what, in a nutshell, did Gerstner actually do to save IBM?

In his book, Who says elephants can’t dance, Gerstner makes it plain that from the earliest days of his appointment, he had a gut feeling that the most-favoured rescue plan—to break IBM up into a number of independent ‘Baby Blues’ (from IBM’s nickname of ‘Big Blue’)—was the wrong solution. In his very first meeting with IBM executives, he said this about the advice to break the giant into smaller, independent units: ‘Maybe that’s the right thing to do, but maybe not. We certainly want decentralized, market driven decision-making. But is there not some unique strength in our ability to offer comprehensive solutions, a continuum of support? Can’t we do that and also sell individual products?’[3]

Gerstner had another deeply-held conviction, which came from having been an IBM customer during his days with American Express. He understood customers’ potential frustrations with IBM’s rather patrician attitude towards its clients—but he also understood the benefits of IBM’s famed commitment to customer service. His customer’s-eye view showed him what the company did right and what it could do much better. In one of his early, broad brushstroke list of expectations for the transformation of IBM, Gerstner put forward this list:

• “We would redefine IBM and its priorities starting with the customer.
• We would give our laboratories free rein and deliver open, distributed, user-based solutions
• We would recommit to quality, be easier to work with and re-establish our leadership position (but not the old dominance) in the industry.
• Everything at IBM would begin with listening to our customers and delivering the performance they expected.”[4]

The mainframe is not dead – and the PC is not the future

Gerstner had one other really important belief that he brought with him from American Express. The mainframe computer was not dead, despite the clever and persistent PR being put out by the new kids on the block—the personal computer manufacturers and their software allies like Microsoft. Gerstner understood, despite what the personal computer lobby was implying with all of the hype about ‘the death of the mainframe’, that you cannot run a major international transactions-based business on a personal computer, even with remote server back-up. You need something—what shall we say?—bigger. (In fact, and very impressively, Gerstner had realised something far more fundamental: as the supposedly all-powerful PC would need more powerful back up from remote servers if it was to cope with heavyweight computing tasks so, ironically, the PC itself became almost irrelevant. The power of the network was what mattered, and the network (which IBM strategists began to call ‘the cloud’) could power any number of remote appliances, from PCs to mobile phones to TVs. So although the expensive IBM ‘mainframe’ computer in the basement might be about to become a thing of the past, the personal computer was only, in fact, a small, part of the future. The network—‘the cloud’—would be the driving force.)

‘Lighting a fire on your head and putting it out with a hammer’

What Gerstner embarked on in his early days was a gruelling and deeply unglamorous programme of ‘reengineering’ the company – getting all of the really dull but vitally important systems right.  “Reengineering,” says Gerstner, “is difficult, boring and painful.” He tells the story of one of his senior executives, who came up with the marvellous quote that ‘reengineering is like starting a fire on your head and putting it out with a hammer.’  Some reengineering was definitely needed. As Gerstner writes, ‘We were running inventory systems, accounting systems, fulfilment systems, and distribution systems that were all, to a greater or lesser degree, the mutant offspring of systems built in the early mainframe days and then adapted and patched together to fit the needs of one of twenty-four independent business units.’ The company had 266 different general ledger systems. The company also had 128 different people with ‘Chief Information Officer’ in their title. And, as Gerstner recounts, ‘Our HR systems were so rigid that you actually had to be fired by one division to be employed by another.’[5] Each of the overseas divisions of IBMK operated as what Gerstner dubbed ‘Fiefdoms’ operating with significant and fiercely protected independence, each with their own non-compatible finance systems. The duplication of services worldwide was horrific. Europe alone had 23,000 support people.[6] One of the key changes that Gerstner made to the remuneration system at IBM, in addition to making stock-based compensation the largest component of senior executive’s pay (to drive home the point that external perception of the company’s success was at least as important as meeting internal goals), was to ensure that part of the bonus was paid against IBM’s overall performance, and not the performance of any one territory.

Based on his real  concern that IBM could actually run out of cash, in July 1993 Gerstner cut the shareholders’ annual dividend from $2.16 to $1.00 and started a programme of selling-off unproductive assets. They sold the corporate HQ in New York, the fleet of airplanes and the fine-art collection. They also sold of parts of the business that were essentially successful but that were struggling to make sufficient profit within IBM’s overall cost structure as Gerstner began to shed commoditised areas of the business and consolidate around high margin areas. He also analysed the comonay’s major competitors and found that they were spending an average of 31 cents to achieve $1 of revenue, and that the same result was costing IBM 42 cents. Across the company’s vast revenues this amounted to a $7 billion dollar issue.

Putting the customer first

Gerstner was to reduce the IBM workforce worldwide by over 100,00 during his restructuring process—and this in a company that had attempted to run a ‘jobs for life’ policy.[7]

On the more positive side, and pursuing his obsession with the customer, which was at the very core of his new vision for IBM, Gerstner asked every one of top fifty member’s of the senior management team to visit at least five major clients in the next three months, and for each of their direct reports to do the same. For very visit, he asked for a short report (one or two pages). He read these reports and took action when necessary. Staff began to see that he was serious about keeping customers happy.

One of Gerstner’s most radical decisions was to slash the price of mainframe computers: IBM’s vital cash cow and—arguably – the revenue stream that was keeping the company afloat (just). Gerstner could have kept milking this cow, but he felt that to do this was to ignore what IBM customers were asking for: a lower price. The few competitors in mainframe supply were offering products that were 30-40% cheaper. And, in fact, Gerstner had a potential ace up his sleeve: IBM research had been working on a new technology that would replace the current mainframe technical architecture. The new CMOS technology had the potential to deliver ever more powerful mainframes for less cost. Gerstner signed off the continuing $1 billion investment in CMOS development. It worked. IBMs aggressive pricing policy infused new life into mainframe sales.  As the cost of a unit of mainframe processing decreased radically over the coming year, IBM turned around potentially fatal slump in mainframe sales and began to increase sales dramatically year on year from 1994 onwards, while the new technology helped to maintain profitability.

Finally, every aspect of Gerstner’s new vision for the company is represented in Gerstner’s most remarkable decision: to pursue IBM’s commitment to customer needs by unleashing an Integrated Services unit that would supply all of a customer’s IT needs in a rapidly changing technological world, even if it meant recommending non-IBM products if these represented the best solution to a customer’s needs, and to maintain and service those products also as part of the service contract. This deeply unpopular strategic move resulted in the creation of a division that came to deliver 50% of IBM revenues.[8]

Oh—and it was during Gerstner’s watch that IBM embraced the internet as a serious business tool.

[2] Louis Gerstner, Who says Elephants can’t dance, Harper Collins New York, 2002,

[3] Ibid., p 23

[4]Ibid., p 47-48

[5] Ibid., p 64

[6] Ibid., p 86

[7] http://en.wikipedia.org/wiki/Louis_V._Gerstner,_Jr.

[8] http://en.wikipedia.org/wiki/History_of_IBM