Friday, October 25, 2013

A Level 5 Leader Makes a Bad Choice


Last week we had the chance to hear a Fortune 500 CEO talk about the company he was hired to turn around, and we got to chat with him afterword.  In his talk, he referenced the model Jim Collins laid out in Good to Great – that a leader’s first job is to “start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats."   

Our natural response is “Yeah, that sounds right.” 

In our chat with this CEO after his talk, he came across a great guy – humble, yet having intense personal will (the qualities Collins uses to describe a “Level 5” leader).  He clearly was focused on the greater good of the business, recognized that the company would only succeed through the effort of a strong team, and was not looking for personal ego gratification.

And yet. . .with all of that great intent, how he went about deciding who would be on the bus was just a terrible choice of methodology. [Read more. . .]

Figuring that the members of the team knew each other much better than he knew any of them, he asked the top 15 executives in the company to write down on a slip of paper the names of the people they thought should be off the team.  These submissions were anonymous.  The CEO then looked for names that appeared frequently, figured those people were ‘bad apples,’ and fired them.

This is the management version of the Survivor game show.  In the long run, it fosters politics, creates hidden agendas, slows things down, generates poor decisions and reduces results.  But more importantly, the method steps over the real reason the Board hired this guy to turn the company around.  Leadership!  None of the people named on the slips of paper had the opportunity to respond to his leadership.  That’s what the Board hired him to do - LEAD!  If someone needed to go, he should have known it intimately and shouldn’t have needed to get them voted off the island.

The notion that you start by eliminating people who’ve yet to benefit from your style of leadership is a mistake in Jim Collin’s academic approach.  The truly great leaders don’t do that and, as a result, build very strong teams.  Two great examples jump off the page; one more current, one more historical.  

The historical example is the NUMMI plant in California.  G.M. closed this ‘worst’ plant and fired all the incredibly bad union workers.  Toyota in a joint venture with GM, reopened the plant; hired back the same workers; and turned it into GM’s best performing plant in terms of both productivity and quality!  

More recently, when David Marquet took over the poorly performing submarine his boss gave him the freedom to start by getting the right people on the sub, the wrong people off the sub, and the right people in the right seats.  Commader Marquet made no change to personnel on the boat.  He didn’t know them well enough to make those choices.  In less than a year this crew delivered the best submarine performance in US naval history.  Great leaders in business and in the military take the hand their dealt and turn it into a royal flush.

What most CEOs lack is knowledge about what tried-and-tested tools are available to make these transitions easier.  That’s the tool kit we offer to companies.  In this specific case we utilize a couple of techniques to get a shared commitment from the team that they are the right people in the right seats, and that the right behaviors, strongly motivated sustain.  Occasionally, someone does get off the bus and in four out of five cases, the individual initiates their own exit.  Everyone who’s left is committed to the team and to an open, honest operating methodology.

Call us to find out how you can have a company that enjoys consistent extraordinary performance and to get more details on NUMMI or David Marquet, call me:  

Bill  Burnett at 847.219.2285 or email bill@innovationceo.com

Post a Comment