Unsung Melodies: This week’s events I didn’t write about

January 24, 2013

Apps for apesThis week I would have liked to have blogged about Barack Obama’s second inauguration; David Cameron’s long-awaited speech on Europe; blacklisting of employees; Lance Armstrong’s interview with Oprah Winfrey; and iPads for Apes

President Obama’s inauguration

The UK, like the rest of the world, followed the inauguration. An estimated 40 million people watched [see the figures for Armstrong and Whitney, below]. A video of the 18 minute speech is available.

Initial reactions seem to be that the president will take steps to counter what he sees as obstruction to his policies by political opponents in the Senate. The speech signals this intention specifically on actions to preserve the environment, supporting human rights, and strengthening gun controls.

Prime Minster David Cameron’s European Speech

Meanwhile, over in Europe, Prime Minister Cameron makes what is considered his most committing political speech of his term in office. [23rd January 2012] His party’s stance on Europe will be built around a pre-election pledge for a post-election “in or out” referendum on membership of the European Community. The strategy appears to be a move to counter the rise of the anti-Europe UKIP party in the polls, and as a means of reducing trouble with his own anti-Europe MPs. He plans to renegotiate before the next general election [in 2015] to obtain changes in the EC and its arrangements with the UK. If successful. these will permit him to support a “stay in” vote in the subsequent referendum. A video of this speech is also available [via the BBC website]

Blacklisting of employees in the UK

This story is one which I believe will recur over the next few months, as a matter of corporate social responsibilities. Attention has been drawn to bullying and possibly illegal means through which organizations prevent employees from speaking out concerning their working conditions. The sanctions include the blacklisting of uncooperative employees from future employment. The examples suggest the practice has been widespread in some industries such as construction where part-time and supply work is common.

Lance and Oprah

The hero to zero story of Lance Armstrong played out as a full-blown televised confessional between Armstrong and Oprah Winfrey. It was watched by 28 million people worldwide. The charismatic figure considered the greatest cyclist of his generation once acquired cult status. Eventually he was revealed as a drug cheat who dragged his sport into disrepute. I like to describe leadership in terms of dilemmas. In chess terms, Armstrong moved not because he could or because he wanted to, but because he was forced to by a build up of stories against him.

Apps for Apes

Here’s a story which is fun and with animal rights implications. Apes like iPads. (Don’t we all?). The story was widely reported

The ‘Apps for Apes’ project came into being [in a Milwaukee zoo] because orangutans need constant stimulation – otherwise they become bored or depressed. Previous experiments have proved that the animals have an innate ability to use touchscreens.

‘The original idea came literally when Steve Jobs gave his opening presentation introducing the iPad,’ said conservationist Richard Zimmerman.

MBA student note

You may find a story for a leadership blog within these five items. Try to focus on a specific theme, and bring out its leadership implications around a critical incident.


Sir Martin Sorrell defends leaders’ pay rises

December 19, 2011

Sir Martin Sorrell has an impressive if sometimes controversial business career. His robust defense of his 70% pay rise captures his leadership style

Harvard educated Sir Martin Sorrell has been a candidate for a LWD leadership post for some while. He appeared on the radar screen again, as I caught the end of a BBC interview in which he justifies his most recent earnings rise of 70% last year.

His broadcast performance was consistent with that of an earlier interview [2009], suggesting a leader who was both tough and successful.

Sir Martin Sorrell is the chief executive of WPP, the company he founded in 1986, which is now the world’s largest group of advertising, marketing and communications companies. Widely regarded as one of the most important figures in his field, he recently joined Evan Davis on Radio 4’s business discussion programme The Bottom Line. He shared his vision about the future of advertising, the benefits of scale, why tough love means you sometimes have to bite the bullet and reduce your headcount, and how long the present financial crisis may last.

His 2009 predictions turned out to be rather refuted by events. However, that is largely true for other distinguished leaders in these turbulent times. There is an interesting parallel in his admiration of Rupert Murdoch with the comments made later by Tony Blair in his memoires. These endorsements of the tycoon’s achievements help us avoid the ‘hero to zero’ mentality which can be found in much of popular leadership narratives.

Furthermore, most pundits did not get close to anticipating the aftershocks of the credit crunch emerging in 2008.

Rupert understands…

Somebody like Rupert Murdoch understands that he’s not just in the TV business or the film business. He understands he’s in the communications business. Rather like Theodore Levitt used to talk about the buggy whip industry. They’re not in the horse and buggy industry. They’re in the transport industry. And when the railroads came in, they were threatened; but if you thought about it as being the transport industry, you won.
Rupert understands that. He’s in film, he’s in TV, he’s in outdoor sites in Russia. He’s spread his empire around the world.

“A recovery of sorts”

“The first half of 2009 will be very tough – I think the second half of 2009 will get relatively better. Relative to the first half.
And I think in 2010 we will get a recovery – what we called in a recent statement a recovery of sorts “.

Tough love

Sir Martin’s career has been hugely successful and his success has been rewarded with honours and wealth. He takes risks and cuts his losses when they occur. In the interview he also talked about ‘tough love’ and the benefits of ‘letting people go’ however painful the decision. (Although he didn’t seem too pained, it seemed to me).

The Daily Mail, a popularist tabloid newspaper, was unconvinced about Sir Martin’s case. In an article hostile to his lifestyle The Mail noted:

My pay is very low, moans advertising tycoon with a basic salary of £1 MILLION a year

Sir Martin, 66, said his bumper income, which rose by 83 per cent to £4.2million last year, was fully justified and was mostly linked to the firm’s performance. He added that he considered his basic salary, of just over £1million, to be ‘very low’.

The juicy details

The article also replicated much that can be found on wikipedia on juicy details of his high-profile divorce which has arguably contributed to his celebrity profile, albeit for non-business matters.

Acknowledgements

To the website Short Person’s Support for the image of Sir Martin. The site also offers the following quotable quote:

Aunt Vorthys: “A nice young man … A pity he’s so short.”
Lady Ekaterin: “He’s not so short … He’s just concentrated”

[Lois McMaster Bujold, in Komarr]


BP’s Hayward goes: How we get the leaders we deserve

July 26, 2010

Tony Hayward, BP’s CEO has been dubbed the most hated Businessman in America in the wake of the Oil Spill disaster in the Gulf of Mexico. His removal was inevitable. But does it make much sense, beyond being a symbolic gesture of a leader falling on his sword?

There is little surprise in the news that Tony Hayward is to be removed as CEO of BP. The BBC’s Robert Peston among others felt that Hayward’s days were numbered from the earliest days of the Deepwater Horizon fatalities. Peston reveals that the BP board had decided that its future would require a new CEO:

Directors also felt that the sacrifice of Hayward should not happen until serious progress had been made on staunching the oil leak and until it was possible to quantify the financial cost of fixing the hole, providing compensation and paying fines. In the last couple of weeks, there has been such progress. And if the moment has more-or-less arrived for BP to start building a post-Macondo future, then it also needs a new public face, a new leader.

The most significant charge appears to be his ‘PR gaffes’.

The demonization of Hayward

Since the Oil-Spill a storm of adverse publicity has been sustained against him. President Obama joined in with remarks in a television interview that Mr Hayward “wouldn’t be working for me after any of those statements”.

Mr Hayward has been demonised as being responsible for the world’s worst environmental disaster – and, let’s not forget, for the deaths of 11 men in the rig explosion that preceded it. Critics argue that, as the man in charge, it is Mr Hayward’s job to take the heat. Nor has he helped his cause with some misguided remarks about wanting his life back and optimistic comments about the clean-up operation. Other public relations own-goals included his refusal to answer questions put to him by a Congressional subcommittee and his decision to participate in a JP Morgan yacht race around the Isle of Wight. END

Leaders we deserve has followed this story closely. The background to Dr Hayward’s appointment in 2007 suggested that he had demonstrated top leadership potential, and had been selected for one of the most challenging of CEO positions with any global organization.

Growing stale in the saddle

CEO tenure remains a complex area for study. Danny Miller’s work is much quoted. He suggests although CEOs may ‘grow stale in the saddle’ that for many organizations, a change of CEO is most likely to take place only as a consequence of catastrophic performance. By generally accepted organizational criteria, Tony Hayward had appeared to making a good start in his job at BP. He declared intentions were to address issues to deal with unsatisfactory operational practices. But should he have been able to put enough changes in place to have prevented the specific errors that contributed to the catastrophe which led to the deaths of eleven people, and environmental disaster

What makes a good leader? How heroes become zeroes

Research into leadership has moved away from universalistic theories. We have stopped looking for presence or absence of a set of properties which differentiate a good leader from a bad one. Even success or failure of itself is insufficient to reveal a simple answer, because all leaders deal with uncertainties and make judgment calls.

In times of crisis, orchestrated anger against a leader builds up. His statements are analysed as evidence of his or her callousness, stupidity, duplicity. The symbolic significance of speech-acts are just as important as physical actions. Sound-bites become replicated in headlines and become elements within a dramatic narrative.

Psycho-analytical models of human behaviour suggest that social groups seek ways of dealing with fear and uncertainty which address inner phobias rather than practical means of overcoming unpleasant circumstances. Under stress and distress group members react as if a leader has betrayed them. According to one text-book such reactions draw on a basic assumption of dependency: a world in which

“The leader is the all-providing and all-knowing saviour who may also become another hate figure”

Lessons to be learned

Under such circumstances it becomes a social imperative to change the leader we have to the leader we deserve. There are lessons to be learned here, about leaders, dilemmas of leadership, and the social processes which result in complex issues being reduced to a leader’s incompetence.


Bob Nardelli. A good leader for Chrysler in its present plight?

November 4, 2007

bob-nardelli.jpgIf you believe in situational leadership you may feel that Bob Nardelli’s style is an appropriate one for Chrysler, following the Cerberus takeover

The bloodletting at Chrysler is not going to be pleasant. It calls for a special kind of leadership to avoid worse outcomes than might have been possible. There have been business leaders in the past who relished the prospects of being in charge in such a crisis. They had earned their reputations as uncompromising men willing to made the big decisions in a slash-and-burn situation.

Uncompromising men? It’s just that there are fewer stories about equally ruthless business women, because they haven’t had as many opportunities. A few years ago there was Linda Wachner, America’s first Fortune 500 female boss, whose high-handed management style was blamed for the bankruptcy of clothing company Warnaco. And I have little doubt that if Margaret Thatcher had found herself in change at Chrysler at the moment, she would have entered into the spirit of things with her legendary energy and decisiveness.

Heroes and villains

In times of crisis, it is tempting to portray events as dominated by the actions of great villains or heroes depending on your view of capital market mechanisms. The leader as hero rescues what can be saved, and in the process accepts that casualties as a vital part of winning the battle. That might be called the unconditional free-market view. Opposed to that, is notion of the leader brought in to a company in trouble is a villain, a mercenary, a ruthless bounty-hunter contracted to deliver what is required, ‘dead or alive’ in order to earn his own booty on behalf of a powerful rapacious corporate raider. That’s the unconditional anti-capitalist view.

Young people around the world learn of their national heroes and traitors in terms rather like these. Cultural forces sustain the views, as part of each culture’s ‘national heritage’, regardless of efforts at history teachers to offer a more nuanced explanation of events and of the impact of individuals.

Many years ago, Thomas Carlisle took the view that great leaders could be excused human flaws. Assuming they have something special which achieves great results, we must beware of belittling them for being all too human. That’s one argument. Carlisle warned against what he called valetism. (‘No man is a hero to his own valet’).

One of various objections to Carlisle’s idea is the way in which heroes suddenly become villains (the hero to zero effect), but in either case are granted exceptional abilities. It anticipated the more technical studies of leadership in search of the right stuff, the essence of leadership.

It took us a hundred years of work to suspect that the impact of great leaders was to a considerable degree based on the perceptions of followers. That’s why I am rather keen to promote the suggestion that we get the leaders we deserve, and that they are to some degree the creation of our collective imaginations.

Remember Chain-Saw Al?

Before returning to Chrysler, it may be worth recalling the rise and fall of other leaders once hailed great, and then trashed. ‘Chain saw’ Al Dunlap comes to mind. Older subscribers will remember Al as hero of Wall Street, the wizard of down-sizing. Al was in demand for a company in need of the slash and burn treatment. Al kept producing the goods, metaphorically. He eventually was found not to be producing the goods literally, and had been engaging in all sorts of creative accounting.

Morer recently, we witnessed had the rise and fall of Sam O’ Neal at Merrill Lynch. Sam had been lauded as Sam the Man who had shaken Merrill Lunch out of its strategic slumbers. He had also presided over the company at the time when it hit the buffers as one of the biggest losers in the sub-prime markets this year. Exit Sam with some $16 million compensation for his efforts during the good years.

Once the performance of Merrill Lynch fell, Mr O’Neal’s contribution, and his leadership style were called into attention. He was autocratic. He would not listen to advice. He could be very difficult to work with. And so on.

Which brings us back to Bob Nardelli

When Nardelli left Home Depot, earlier this year, the consensus was that

Home Depot faces a well-known dilemma. It has long passed a growth phase when its stock was rising in sensational fashion. Efforts to maintain the growth led to a decision to bring in new and dynamic management. When the desired growth was not achieved, the leader was deposed. Nardelli’s demise was made easier by his management style and a skill at extracting extremely favourable personal rewards. It should be noted that this might suggest he was a difficult boss, but not a stupid one

When Cerberus acquired Chrysler, they turned to Nardelli.

Why? Private Equity business deals require leaders to be able to follow a plan, stick to the numbers. They may or may not be ‘good with people’. If they are, it’s a bonus.

Matching the situation and the leader

Situational leadership suggests that different situations call for different leadership skills. In one well-known leadership formulation, leaders are invited to assess situations and seek an appropriate style. In Chrysler’s situation, the temptation for the new owners is to regard a directive style as appropriate. That’s how it’s worked in the past. Hello, Bob, I think we’ve got just the job for you …Yes, a bit like Al., but we don’t want any financial tricks. Remember what happened to Al.

So is Nardelli likely to be a good leader for Chrysler?

There are no easy answers in a case study like this one. Conclusions have to be supported by argument and indications of the assumptions being made. So far, I’ve been putting forward a qualification that it is not possible to put leaders into one of two boxes ‘good or bad’. This is based on the evidence that leaders may have a style that suits them to some circumstances better than others.

The next point to consider is good for what and for whom. In evaluating Nardelli’s impact at Chrysler we may wish to take the broad view that Chrysler appears to be in need of drastic and painful change, and that Nardelli was attracted with a deal in which he is generously rewarded for carrying out the painful operation of change.

I suspect he has some of the characteristics of the tough-minded leader required to meet the short-term financial objectives of Cerberus. I don’t know if he will succeed in the wider challenge of creating something permanent that will be recognised as the New Chrysler. Sadly, among the biggest losers at Chrysler will be tens of thousands of workers who will be without jobs over the coming months. The unconditional free-marketeers will Maybe argue that the alternatives would likely have led to even more job losses at Chrysler further down the line. Maybe a tough approach now will create more jobs elsewhere, than a more ‘humane’ and collaborative approach which fails to bring about changes in market prospects of the ailing corporation.