Recently I had the opportunity to discuss with Karsten Martens the underlying reasons why management teams lose focus and wind up mired in internal conflicts leading to a gradual decline in the culture and performance of once great firms. Martens is CEO of Coverdale North America LLC, a 45-year-old global firm specializing in organizational change. Active in 80 countries, its mission is about “enabling people to succeed – together.”
I met Karsten at the 12th annual CEO2CEO Summit.
Coverdale seeks to help CEOs and their boards return their management teams to cooperative and cohesive functional partners in the quest for a sustainable competitive advantage. The firm’s clients include major multinationals like Daimler AG.
I asked Karsten to identify the root cause why otherwise successful firms tend to lose focus. What dilutes their value proposition and causes their customers to seek other alternatives?
His answer, based on years of experience, represents a wake-up call for CEOs:
- Short term concentration on the quarterly and annual budget. This creates a culture over time where individual managers are more reactive to short term events at the expense of developing proactive long term strategies.
- Not developing and updating an actionable long term plan. Without devoting the proper time to creating and maintaining a long term purpose-driven mission, updated by the well thought out input of the management team, old strategies stop working because markets are dynamic–especially in these volatile economic times.
- Individual managers tend to become absorbed by negative issues, which over time tend to block their ability to exercise creativity as they become more and more inwardly focused. Karsten finds that as responsibility increases and managers rise in organizations, decisions are taken more and more intuitively. Intuition is a powerful skill. However, it needs to be continuously developed like any other skill to maintain its effectiveness.
It is obvious that running any company, and more so as it grows in size and complexity, places perpetual pressurized demands on a manager’s time and energy. It is easy to see how all of these factors can lead to loss of focus and create a dysfunctional management team.
This is why it is critical to return to a strategic planning mode and get out of the typical firefighting/crisis management routine that overcomes many CEOs and their teams.
Once you have created a plan it is a relatively easy task to take a day on a quarterly basis to review progress against the strategic milestones in the plan and amend the plan accordingly if there have been major changes in the dynamics of the marketplace. Without this objective periodic review of your value proposition, it is easy to see how cultures can disintegrate when short term issues are allowed to overcome the long term sustainability of the company.
Cloverdale’s approach to assisting CEOs in returning their firms to a more positive and proactive cultural foundation is unique in that they do not act in an advisory or consultative way, but rather as coaches guiding managers to work together more productively. This different approach to leadership development is all about working together on mutual tasks not specifically related to any technical issues in their business.
The Cloverdale technique is more about developing team cohesiveness and cooperation with the end goal being to help the team develop a revised sustainable mission that they can work together toward collectively and productively. Once the proper alignment can be reestablished, then strategy alignment will be a natural byproduct of the process.
Given that 96 percent of their business comes from referrals and repeat customers their process is a proven model for implementing successful behavioral change.
If you have issues like those I have described, let me know and let’s start a dialogue on how to resolve them.