September 17, 2014
"Computers make excellent and efficient servants; but I have no wish to serve under them. Captain, a starship also runs on loyalty to one man, and nothing can replace it, or him."
Recent observations along the road regarding corporate derailment have led me to write my first article in a considerable while, addressing the issue of what happens when a company finds itself without a leader, and why a company needs a strong day-to-day leader if it is to grow and prosper in the long term.
-- Spock, in Star Trek: The Ultimate Computer, stardate 4731.3.
A company can find itself without its day-to-day leader due to a wide variety of causes, such as death or illness of the person in charge, a change of their life circumstances, or their being hired away by another company. When this happens, a company with a robust management structure can and should be able to continue to operate strongly for a period of time.
But under such circumstances it is a mistake to presume that a business will continue to grow and outpace its competition over the long term. Over time, a company without a strong day-to-day leader will tend to lose direction and drift off course. There are four main reasons why this occurs:
- A company in such circumstances tends to fall into the trap of management by committee, which leads to indecision, lack of ownership of critical issues, and lack of alignment between responsibility and authority. No one person is responsible for the "big picture" of where the company is heading, and the decisions that require such perspective end up getting deferred and avoided. Friction can also develop between senior management when no one is available to mediate and resolve conflicts amongst individuals of equal rank. Clear lines of ownership over decision-making are essential in a healthy company.
- There is a difference between working "in the business" and working "on the business," and the latter typically does not happen without a strong leader. A company with a strong COO, for example, can continue to operate efficiently in terms of executing day-to-day operations, even without a President or CEO. But it is often the President's or CEO's unique role to focus on where the company needs to be years ahead, and to set the vision for the future of the enterprise. Without a leader to focus "on the business" while everyone else is focused on working "in the business", a company over time tends to tread water and fails to take the kinds of major steps forward that will allow it to evolve, prosper, and respond to competitive pressures over a period of many years.
- As Mister Spock noted in the quote at the beginning of this article, a starship runs on loyalty to one man (or woman), and nothing can replace it, or him... and the same is true for a strong company. Employees need a strong leader to look up to for inspiration, to establish corporate culture, and to provide them with a sense of where they will be heading in the future. There is security in having someone in charge whom they can have confidence in, and they need to have such confidence because they know that the livelihoods of themselves and their families depend upon it. Without such strong leadership in place, employees lose faith, confidence, and direction, and turnover tends to increase.
- Large business deals between organizations are typically made between people who believe in each other, and it is such inter-personal trust, even more than contractual commitments, that provides the confidence that the other party is truly committed to upholding its end of the agreement. Without someone in charge, it becomes far more difficult for a company to enter into major deals and partnerships with other organizations. Many business deals between organizations are appropriately negotiated at the President/CEO to President/CEO level. Without having a person setting the course for the company whom external parties believe in and trust, a business will often be viewed with uncertainty as to its future direction, and others will be hesitant to make major business deals with the organization.
Where will a new leader come from when there is such a leadership void? Typically the board of directors, or owners/shareholders, will step in to provide one in a timely fashion. It might be someone promoted from within, or someone brought in from outside to provide new vision and perspective for the organization. Putting a company under the leadership of a new person under such circumstances can surely be a scary proposition for the board/owner, but failing to take such action carries even scarier repercussions.
What makes a good leader? According to Dr. Brent Smith, who is currently Associate Dean of Executive Education and Associate Professor of Management and Psychology at Rice University, studies have found that a lack of adaptability is the most common and most significant problem that holds a leader back from fulfilling their potential. Effective leadership requires that the leader have a good understanding of their strengths and weaknesses, that they be able to seek help in areas in which they are weak, and that they are able to turn their mistakes into learning experiences that help them become better leaders in the future.
Experience is critically important, but it needs to occur in a context in which others are there in a coaching capacity to help manage the process and ensure that proper lessons are learned. And it is not suitable or even possible for a leader to turn to one of his or her employees to provide such a mentoring role without conflict of interest - it needs to come from someone independent and outside the organization, and who is able and willing to loyally provide the leader frank advice even at times at which they don't particularly want to hear it.
Over the years I have found, particularly through my membership in the Entrepreneurs Organization (EO), that getting this kind of external coaching support from others has been critical for my personal growth as a leader, and I also find again and again that my serving as a coach to others helps me see my own strengths, weaknesses, and actions in a vastly clearer perspective. My experiences in serving as the Regional Communications Director for EO gave me the opportunity to serve as coach and guide to business leaders serving as Communications Chairs for EO Chapters across the western USA, and it was an extraordinarily fulfilling challenge.
Business IS rocket science. Whether you are conning a starship, or just an ordinary company, having the right man or woman at the helm is absolutely critical to your ability to set a course for a profitable and rewarding future.