The need for Understanding
A cameo and some key themes
"I know all that. I´ve read all the hype too, but it only makes things worse".
Harry was one of the leading HR directors; relaxed, charming, unflappable and now he looked very different; very flapped.
"What do you mean, make things worse?"
He leaned forward and spoke quietly as though we might be overheard.
"We´ve paid far too high a premium".
"Premium?"
"He´s rushed through the deals at too high a price. We´ll never show a return on them."
"But Harry, the share price is sky high, your CEO´s on the cover of Fortune, he´s been described as one of America´s greatest business leaders. How could he have got it so wrong?"
Harry's eye looked vainly round the room; he waved his hands.
"He doesn´t listen to anyone, he never has, sees himself as a genius,the only one who knows the industry, can read the tea leaves, he is the White Knight."
I said nothing, waiting for him to go on.
"That's why we are starting to lose people. They get no chance to grow, he gives them no elbow room. This isn't a team, its a one-man mutual admiration society or you´re out. He's done it before and he's doing it again a great deal maker but he couldn't harvest a bed of roses."
"Done it before? I thought he was one of the great success figures. He changed the industry."
"No way. I´ve spoken to some friends in his earlier companies. He built great sandcastles in the sky and then got out before they exploded in his face."
"So how come he was recruited here in the first place?"
"The Board wanted a saviour, they were looking for someone to take the heat, they needed a success. The part-timers were out of touch, didnt understand the technology and liked the cachet of being a Non-Exec. His earlier companies were happy to see the back of him, were frightened that their share price would be compromised. They were afraid of him."
"Afraid! What of?"
"After a while he is left with teams of yes men, frightened of their own shadows, wanting to trust in his success and his sun. Challenging him becomes challenging yourself."
"And these new mergers?"
"They are acquisitions. They have built our debt to unsustainable levels. We will have a honeymoon period of pooling the vanities and then the fallout will start. We´ll lose the people who made the business work, nothing will be integrated, any benefits will just drift away from us."
"So get rid of him now!"
"You can´t. The Board is too scared. It´s got too much running on him winning."
Most companies fail. Few live for more than 40 years. Business plans fail. Acquisitions fail (sidebar 1). Most projects are inherently high risk, in that they involve large amounts of money and usually considerable conflicts over the vital issues that future success depends upon: people, key staff and their motivations. The conversation above is a distillation of discussions that took place with several world renowned groups. The issues they revealed are happening daily:
- Managers are not confronting the truth, taking sufficient trouble, helping their CEO to retain an objective coolness
- Boards of directors fearing failure, are falsifying the evidence.
- CEOs are leaping at dreams, hoping to gain glorious successes, hoping that their successes will cover up their own past failures
- Operating directors, no less frightened of failure, unable to listen or challenge because they do not know how to, become yes men or leave the firm.