ACT Change

The thrust of the concept of ACT change is that real leadership requires a revolutionary moral journey of the self.  Going to work in a frenzied business world every day with Martin Luther King Jr., Gandhi, and Jesus Christ as the standards for your conduct in the workplace is a tall order, to say the least.  Tall, but noble.  Tall, but beautiful.  Tall, but perhaps even indispensable.

The authors’ main contention is that change leadership requires first a revolutionary change within the leader.  When this takes place other traditional methods of bringing about change may be rendered unnecessary.  The most important thing is for the leader to make a shift out of egocentricity.  The leader must stop being concerned with him or herself, and surrender to the common good.  Also, the leader must work to purge hypocrisy out of their paradigm.  It is essential that leaders who want to inspire change reduce their own integrity gaps.  These leaders must also work outside the box right up to the edge of creating chaos while always seeking to bring out the best in those around them.  This is revolutionary stuff indeed.

When leaders can do this, great things happen.  The main impediment is our fast-paced, quantitative, results-oriented culture.  Leaders who want to practice this face a battle within organizations that are focused on quarterly numbers.  This is a more qualitative and slow process that is likely to be completely misunderstood by many pragmatists.

Organizational Silence

Organizational silence is the rule, not the exception.  I suspect this has been the case throughout human history right back down to the first tribes.  The tendency to not rock the boat of those in power is a manifestation of the self-preservation instinct.  It is political at its core, and like politics, usually leads to rank corruption of both the powerful and the powerless.

To narrow the scope, the problem with organizational silence in business is more than philosophical.  It’s bad for the numbers.  It can negatively impact market share.  It can put you out of a job.  Now that should trigger the instinct of self-preservation in the opposite direction.  The long view requires that managers have the self-confidence to take criticism, and that they stop assuming all criticism from below comes from a place of self-interested manipulation.

HBS Treadway Tire

It seems to me the problem with Treadway Tire in this case is a lack of leadership.  The high turnover in the line foreman position cannot be blamed on a lack of adequate compensation.  The money is relatively good, so the job itself is churning them out.

The case talks about how the majority of line foremen come up from the ranks of the hourly unionized workers.  A small percentage are college grads, and an even smaller percentage are experienced transfers from within the company.  There is no formal training program in place, so line foremen are thrown into a meat-grinder with heavy accountability to daily numbers with no support.  The plant manager is quoted as saying that he feels the line foremen are disconnected from the upper levels of management.  His solution is a periodic social hour.  This is way off base as it does nothing to address the lack of training.  The plant manager refuses to implement a formal training program, citing cost as prohibitive.  It would be interesting to see the cost of the turnover he is experiencing and compare that with the cost of a training program.

In addition to training the foremen, upper management needs a shot in the arm.  The case states that most managers above the foremen came up through the ranks.  They are running roughshod over their foremen, and then wondering why the foremen abuse the hourly workers!  The foremen are emulating the management style they were raised with.  A focus on leadership and development must be added to the narrow focus on maximizing efficiency in order for the plant to overcome its turnover problem.

The Men’s Wearhouse Case

This Stanford Business School case examines the extraordinary performance of the Men’s Wearhouse in a declining industry.  The market for men’s tailored clothing in the 80s through the 90s was stagnant or declining, creating a zero-sum game for competitors.  The Men’s Wearhouse won customers from their major competitors and flourished while many of their competitors went bankrupt.

The case focuses heavily on the unique life experience and philosophy of George Zimmer, which heavily influenced his unorthodox management style.  Zimmer was a child of the 60s and was involved in the counter-culture.   This instilled in him a commitment to unlocking human potential that he brought into his business.  Indeed, the company mission statement included self-actualization as a goal.  Maslow is applauding somewhere from his grave.

Zimmer relied heavily on the concept of servant leadership to guide management behavior.  Managers were expected to live in the stores, and the philosophy was that store employees were their customers.  In this way, management expected the focus on service to roll down through the ranks and reach the customer in the store.   Alongside the focus on servant leadership, was a culture built on selling.  Zimmer’s charisma, commitment to selling, and constant presence in the stores in the early days selling alongside store staff greatly contributed to a commitment to selling in the company.

Zimmer got the culture and the “touch” right, but also key is the fact that he got compensation right.  The commission structure created above-market compensation on average.  The nasty side effect of unethical “sharking” did raise its ugly head, but, according to the case, management vigilantly watched for this and terminated those who were not team players.  There was a strong emphasis on teamwork reinforced through the informal training structure and the PA system. 

Management training was not outsourced, but was owned by the executive leadership of the company, many of whom worked their way from the ground up in side the organization.  Also, many of the executives were young compared to their counterparts in other organizations.  The training sessions focused on culture, selling, and having fun.  This created an energized atmosphere that seemingly paid off in spades for the company and shareholders.

While the family atmosphere and the socialization between managers and subordinates created a fun, close-knit, committed environment, problems with nepotism and sticky ethics could not follow far behind, especially as this company grows.  Also,  while the performance appraisal form clearly reinforced company values, it was too complex and detailed to be effective.  It had too many categories for too many different behaviors that a manager could not possibly effectively observe and evaluate consistently.  Aside from the hard sales data at the top, it boiled down to a subjective thumbs up or thumbs down on how well the employee fit the culture.

Jeffrey Pfeffer prepared this case, and the emphasis on the value of servant leadership is clear.  However, there seem to be other possible contributing factors to the success of The Men’s Wearhouse that are mentioned only in passing.  For example,  the product was consistently offered at 20%-30% less than the competition.  This is huge.  All we are told about how Zimmer was able to do this is that he offered his handshake guarantee that his suppliers would not be mentioned in advertising if they sold to him at massive discounts.  This is a pretty significant supply-chain and pricing coup that contributed to his success.  In addition, the marketing strategy through the television ads was very effective, as was the company’s tailoring of their services according to the understanding that men don’t like to shop.  They made it as easy as possible for men to get an inexpensive, high-quality suit without having to deal with malls and price shopping.  So, I think the leadership style is crucial to their success, but the marketing and supply-chain cannot be ignored.

HBR-Layoffs

This Harvard Business Review case study details the plight of Astrigo facing financial crisis and possible layoffs.  I enjoyed Jurgen Dormann’s commentary following the case, particularly his critique of the executive team.  The CFO and the head of legal ride up to their luncheon in a cherry-wood paneled elevator, joking amiably with one another before dining in a private room.  They then begin to discuss the best way to cut costs through layoffs without even a hint of irony.  That they manage to finish the meal without choking on their own hypocrisy would seem to be a minor miracle.  I also agree with Bob Sutton’s point that layoffs may not cut costs as much as assumed.  Oftentimes the wrong people get laid off in the wrong way, causing long-term damage to morale.  Then there is the expense of getting good people back on the bus when the economic climate changes. 

In this case the CEO, Robin, needs to adhere to first principles before all else.  He has a conflicting mandate from the tradition of his father: fiscal conservatism and taking care of the team.  But these do not have to be mutually exclusive, even in tough times.  Robin needs an executive team that sees layoffs as a last resort, not a first reaction.  All other extraneous expenses need to be cut first, including executive perks. Pay cuts across the board should be implemented before anyone is laid off.  That is Fred Smith at FedEx did.  He cut all managerial compensation including his own in 2008 before he laid anybody off.  Layoffs are easier to swallow by those who remain if it is clear that management put their best good-faith effort to avoid them.  The executive team must first start leading for the good of the whole and see their own culpability in largesse.

WSJ Article Good Leadership

This WSJ article drives home the importance of CEOs and executives being willing to put the organization and good ethics ahead of their own benefit.  This article was published in 2004, and one wonders if anyone outside a classroom read it because with the bursting of the housing bubble and the onset of the Great Recession, there certainly has been no shortage of disgusting levels of fraud, deceit, and greed perpetrated by individuals at the expense of the many.  Perhaps I am just in a cynical mood, but does any of this thinking about leadership and ethics penetrate at all in the halls of real power, ala Goldman Sachs for instance?  But I digress….

The article tells the story of Michael Leven, who heroically and admirably did The Right Thing despite risk to himself.  Would that there were more of him.  The point of the article, of course, is that truly great leaders are never self-serving.  They always put the good of the whole as the first priority.  They do not seek to hoard power.  They seek to socialize it to benefit the many.  They are humble, Collins’ Level 5ers.  They are too few and far between.

Covey’s Servant Leadership

Covey argues that with the servant leadership concept, it’s all or nothing. You can’t espouse servant leadership and still have your managers running around setting goals and throwing carrots and sticks at people to goad them across a line in the sand.  And forget about performance appraisals.  The huge assumption underlying servant leadership is that the “followers” of the servant leader see the big picture and are committed to improving it.  In other words, they must be good organizational  citizens.  They must have both the work ethic that will prevent them from exploiting free reign, and the intrinsic motivation to function well in the absence of feedback.  I just don’t see these assumptions as being realistic in many industries.   If we are taking a workforce like this as the premise, why have we ever in history had managers in the first place?  I know, I know.  I sound terribly backward.  So Type X.  I love the philosophy of the servant leader, and I agree that leaders must be a resource for their teams, but do we really have to throw all performance measures out the window?  Our economy is extremely complex.  I think it would be very naive to assume that a particular leadership style is going to bring great results in every industry, every task, and every workforce.  I just don’t buy the one size fits all philosophy.

Level 5 Leadership

Jim Collins’ concept of Level 5 Leadership flies in the face of accepted wisdom about what makes a good leader.  I find it interesting that despite the fact that Good to Great has become a huge business blockbuster, I still see most people aspiring to Level 4-type management styles and expressing open suspicion of soft-spoken, humble types.  Collins argues that the crux, and the rarity, of Level  leadership is a clear personality-based duality between humility and fierce will.  Now, statistical problems exist with Collins’ research and the conclusions he has drawn.  Level 5 leadership may not be a magic key to greatness for all organizations at all times.  Nevertheless, it is an interesting phenomenon, particularly because the value of Level 5 leadership is that it builds greatness around the organization rather than attaching it to an individual ego.  Individual greatness goes with the person, but organizational greatness can persist.  This is a great example of a healthy use of power, i.e. power socialized for the good of the whole rather than hoarded for individual self-aggrandizement at the expense of the whole.

Lt. Withers and Col. Dowdy

Both of these articles tell the stories, generations apart, of military leaders who deviated from the chain of command to follow the dictates of their consciences.  In the case of Lt. Withers, he stayed true to a higher law during WWII by housing and caring for two prisoners from Dachau in violation of military orders.  Lt. Withers was a black man who at the time was facing legalized discrimination in his own homeland, and yet ws fighting for the liberation of the Jews.  His ability to identify with the prisoners led him to make a humanitarian leadership decision that was, in fact, deviant.

The case of Col. Dowdy, more recently, is similar.  Dowdy was relieved of his command during the Iraq War because he deviated from the explicit Marine strategy of speeding through enemy territory.  Instead, Dowdy wanted to assess the level of resistance in the interest of preserving his men.  His deviant behavior was prioritizing men over mission. 

Both if these men operated as servant leaders.  They made the people they were in charge of their first priority, rather than the wishes of those up the chain.  In so doing they both risked their careers, and one lost his.

The Dean’s Disease

In reading Bedeian’s scathing critique of dean’s bad behavior the first question that occurred to me was: And…this is unique how?  To be fair, I think Bedeian is really writing an article about the pitfalls of leadership and how to navigate sudden rises to power without completely destroying yourself and everyone around you.  His analysis and his solutions are highly generalizable.  I assume he just writes about deans because his experience is in academia.  Methinks a grudge or two might lay barely below the surface as well.  But I digress.

Bedeian points out that deans fail miserably when they retreat into silos of insulated power, and lose touch with their reference group of origin, i.e. the faculty.  Deans often surround themselves with sycophantic yes-men who enable the dean’s growing addiction to admiration.  By isolating dissenting voices on the fringe, deans grow ever more disconnected from the reality of their colleges.  Bedeian seems to resent that deans often prioritize raising funds over scholarly pursuits, though in this it seems the dean is as much a victim of systemic necessity as anyone. 

These criticisms could easily be transferred to any situation where one individual has gained power over a group, whether it’s a fast-food shift supervisor or the President of the United States.  I think the basic fundamentals of a power dynamic gone off the rails is the same all over–the only variation would be in the magnitude of the consequences.  The key takeaway for me is that effective leaders stay as connected as possible, invite dissent, and model the values they want to instill in the organization.  Easier typed, then done.