Perhaps one of these scenarios will resonate with you. Family controlled – While still in high school, the founder’s son decided to pursue a career dramatically different from the family business and he did just that, first acquiring the academic credentials and then entering the job market some 400 miles from home. The work was fulfilling but the compensation was not and with one child and another on the way, the son soon returned ‘home’ to work in his father’s business. The first few years were a learning experience, Gradually overcome by his inspiration that he should be running the business, the son pressed hard, first for an executive title, then for his father’s BMW in exchange for his own Toyota and ultimately, for his father’s office. The father’s love masked what was happening. Eventually, several key executives left, one to work for a competitor, profits became losses and the business was sold for half the value it commanded ten years’ prior. Closely controlled – A chief operating officer had run the closely controlled business for more than 18 years. He was essentially the de facto president, and even though there was a named CEO, he performed those duties as well. He had a record of continuous growth and profitability. Over time, the company’s handful of shareholders yielded all control to the COO, essentially disconnecting from the business having been ‘sold’ by his record of results. And then…the business was disrupted by a dynamic change in market conditions. A regimented management style that worked so well in the past no longer got the same results. Even so, the COO kept doing it harder! The disconnected shareholders were not able to contribute and, too late, stopped trusting that ‘it will come back.’ New management with new skills was brought in but the clock had run out. The business was sold in distress. Public company – A flamboyant president of a manufacturing subsidiary produced modest growth in revenues year after year and profits that grew disproportionately faster. The performance was personally worth it; his defined bonus plan payout became more lucrative with each year that passed. He was happy, senior management was happy and the shareholder reports frequently featured the subsidiary’s strength. To some not connected to the subsidiary, something didn’t seem right. Their focus turned to inventory. It had tripled over the course of three years but revenues had not done the same. A subsequent special audit showed it had been grossly overpriced to mask manufacturing losses and that the subsidiary’s controller, at the president’s direction, had supported the practice. Both were fired and the parent company took a $1millon+ write-off. Family controlled – A son, well-educated and well trained in the family business was appointed president as his father moved towards retirement. The son’s vision was to expand the enterprise well beyond its regional footprint and he began doing so through multiple, capital intensive initiatives. From the sidelines the father had concerns but when he raised them, his son pushed back and the father would retreat. It took just over two years for the vise to close. The business became cash constrained and couldn’t support its expanded operations; its lender lost confidence in the son, capped the credit line and then pushed the company into work out. The father came back in, did what he could to right the ship and rebuild the lender’s confidence but both failed at both initiatives. Chapter 11 followed ending with a discounted asset sale. Closely controlled – An executive was known to be curt, impolite, and even rude to some of the women in the organization and worse, he was also known to be inappropriately amorous to others in both word and action. His reputation was well known in the ‘office’ but not by his supervisor (the president), a personal friend. Eventually a woman who was a target of his amorous approach shared her concerns with another executive. By doing so the matter was brought to the board of directors which in turn then confronted the president. The latter agreed to ‘talk to him.’ Months passed and another incident was reported – again from the president…’I’ll talk to him.’ This time the board wanted confirmation and when they didn’t get it, they acted on their own. The offending executive was encouraged to seek other employment and sometime thereafter, for other reasons, the president was relieved of duty. Public company – A division prided itself as having the best and brightest game changers in the industry to serve its blue chip customers. These highly skilled individuals always solved the customer’s problem, were highly paid to do so and generated an enviable gross margin on almost every job they undertook. The problem was…they only did this about 40% of the time; the under absorption of their cost more than offset the margin they generated resulting in big losses. This dilemma was obvious to the board of directors and meeting after meeting they prodded the CEO to remedy the problem, either by generating more revenue with the same staff or reducing the staff. New customers didn’t come easy; the selling cycle was long and worse, the CEO seemed to have an affinity for each of his highly skilled game changers. He effectively refused to act and in time the board was forced to; the division was folded as was the CEO. Bad optics. Turn a blind eye. Suffer the consequences. Lesson learned.
While in graduate school I worked in an upscale men’s store. The store had two master tailors from Eastern Europe, both in their mid-70s, Aaron and Isaac—they had been there for many years. The tailor shop was very small, maybe 12 feet by 20 feet, cluttered with sewing machines, ironing boards plenty of garments and a steam press. One day. Aaron and Isaac stopped talking to each other. For months, they coexisted in that small space, never saying a word to each other and for months, all of us who worked there tried to broker a ‘peace.’ Years later, as president of a manufacturing company I was looking for a way to improve the work experience for employees. The plant was arranged by work center and our employees usually ate at their work benches. My idea: convert an underutilized space into a break/lunch area. It worked like a charm! Folks got to interact outside of their work area—including Bennie and Alex, a German immigrant. Turns out, both fought in WWII. As they got to know each other they discovered that Bennie’s outfit had captured Alex’s in the war and they stopped speaking. No one could broker a peace. Sound familiar? In all of our social experiences, we inevitably will find two or more individuals who discover they can’t agree on something and then, instead of changing subjects or mixing back into the crowd, they persist in trying to convince the other that their views are without merit. My point: Folks don’t need our help to find reasons to disagree. Which brings me to discussing politics in the workplace. Our goal as executives is to build a like-minded culture in pursuit of the organization’s goals. That’s where our influence should stop. Maybe they do exist, but it’s hard to imagine an enterprise having politically like-minded employees. More likely, there is a spectrum of interests and priorities ranging from healthcare to national security to entitlement programs and more. Tempting - because of our leadership roles, some will seek our viewpoints. Risky – if we give them we add to the polarization that comes with the political season. When asked I’m likely to respond with “you know, I’ve some catching up to do, I haven’t really been tuned in,” or “Right now I’m trying to be a good listener” or, “I’m still processing” and, if asked about a specific candidate I try to say something respectful but neutral. As in the cases of Aaron and Isaac and Bennie and Alex, folks don’t need any help from us in finding reasons to disagree. Our job, regardless of the subject matter, is to prevent internal disruption by preserving mutual respect and support. If you’re in an executive position, communication about economic policies and their influence on the enterprise is essential. But when it comes to political issues and candidates, my advice is to keep silent, or at least stay generic. Everyone is entitled to their opinion, but no one should feel compelled to adopt ours. It’s best for the business that we mind our own business. As for Aaron and Isaac, they made their peace, and we never did find out what issue had splintered them. Bennie and Alex never spoke again. Lesson learned.
Some things you just don’t learn from books. For this CEO, recognizing and understanding unique or unusual behavioral patterns is one of them. It’s an acquired skill which in his view, when respected, can enhance leadership.
Having a discernible energy or presence won’t help anyone make better decisions; it can however significantly contribute to the investment their team makes in them as a leader.
Our customers and clients place expectations on us and expect that we will meet them or exceed them and let them know ahead of time if we won’t. Don’t we deserve as much? Only if we ask!