Brains, Guts, and the Capacity to Act
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Brains, Guts, and the Capacity to Act
By Stephen H. Baum
author of What Made jack welch Jack Welch
What allows a leader to take the steps needed to solve a problem or master a
difficult situation? What keeps the desire to act from being impetuous and
uninformed, as in “ready, fire, aim” behavior? The answer is that the
capacity to act effectively and decisively is a complex mixture of brain and
gut, a combination I call threads in thinking. It includes these qualities:
* An ability to distill a situation to its simplest dynamics; to
understand the issues and the consequences of doing nothing; and to
formulate a specific plan.
* Being extro-spective: seeing the business in the larger context of
the industry and in the marketplace; seeing a situation from a high-altitude
view and making sense of it on the ground.
* For opportunities, an ability to see the true benefits and risks,
which are not always obvious.
* Possession of a mental library of truly relevant analogies and other
mental models that can be applied to characterize the situation in a way
helpful for making a choice.
* An ability to identify valuable sources of advice, experience, and
wisdom (inside the company and out); to elicit information and know when to
do so.
* An instinct for calibrating the value of and motive for facts and
information people are giving you, the subtext of real agendas.
* An ability to discern both financial and nonfinancial impacts and
include them in the calculus (company reputation, morale, future business
options), then weigh the risks.
* An ability to anticipate issues and define a point of view so you
don’t have to do it for the first time under crisis.
* Being able to think a couple of moves ahead, as in chess, or as
Steve Kaufman put it: “the ability to look around the corner and see what’s
coming.” This ability and most of the others can be tested and developed.
It’s a tall order, but remember that no one starts out with all of these
abilities. You develop these threads and judgment only with experience. This
is done mainly through on-the-job training. Just remember how many of the
leaders we’ve been discussing failed in school, how many were far from the
top of their class, how none were rocket scientists. Only by working through
major challenges in the first place do you develop and nurture these
abilities until they become part of you and part of your instinct.
In the Eye of the Storm
Deciding that you must act, and then acting, is not as straightforward as it
seems. Circumstances will often make your decision to take action in the
first place very challenging. Remember that Paul Evanson was an outsider
with no attachments to the company’s past, no involvement in creating the
current mess, and no ties to its current leaders. Although shocked by what
he saw, he was intellectually and emotionally detached and knew that he was
seeing clearly and knew in a heartbeat what had to be done. If only knowing
what to do were always that easy!
It is harder to be detached when you are part of the team — part of the
woodwork. It is an ability that requires the right balance of constructive
emotions (your motivating adrenaline and empathy for others, for example)
and an objective, clinical assessment unblurred by emotions.
Let’s see how Arthur Martinez of Sears was able to take action in spite of
his insider status, when he came to the sad but necessary conclusion that he
must fire someone he cared about a lot. Arthur was a high-ranking executive
at the BATUS retail group (the onetime U.S. subsidiary of British American
Tobacco that owned numerous department stores, including Saks, Gimbel’s, and
Marshall Field’s) when two of its department store chains were failing.
The CEO of one of the chains was a well-liked, longtime employee with a
large and loyal following among the managers. In earlier years, he had been
able to do an admirable job of building the chain and its brand. That was
why some pleaded with Arthur to keep him. Others agreed with Arthur, who saw
him “out of gas,” unable to keep up, as industry consolidation and
competition intensified. His poor performance had gone on for several years,
and the chain’s financials were slowly deteriorating. Pressure to perform at
BATUS was increasing at that time, as tobacco companies were coming under
increasing attack by regulators and interest groups. Looking beyond the
immediate situation, Arthur was anticipating that a hostile event could take
place in such an environment. Sure enough — into this difficult business
environment strode the specter of an imminent hostile takeover by British
financier Sir James Goldsmith, adding incentive to improve financial
performance and consider engineering a spin-off of the retail group, which
ultimately took place.
Arthur had to take all of these factors into consideration as he analyzed
the situation before him and weighed the alternatives. He knew and liked the
man personally but had to weigh many factors: the risk of moving a popular
executive from office with the subsequent loss of knowledge, loss of
expertise, and impact on hundreds or thousands of employees loyal to the
executive against the uncertain improvement in the retail chain’s
performance that might ensue by putting someone else in charge. Before
firing a once valuable employee, any prudent executive will have exhausted
other remedies: coaching, reinforcement of performance goals, setting of
deadlines. And Arthur had done just this.
Ultimately, he made the tough decision to act, engineered the man’s
resignation, and instituted a host of changes in personnel and strategy.
In a story of similar challenge, five topflight sales executives of the
national accounts team left Ecolab to form a competitor — creating a great
deal of uncertainty and worry among the division leaders. Al Schuman
launched an immediate communications blitz, rallying everyone to work
together to recover from what he labeled as “our December 7.” He also
launched a counterattack on the new competitor to prevent its becoming a
real threat.” He credits this intense passion to win to experiences in his
youth and in early employment.
copyright 2007 Stephen H. Baum. Published by Crown Business, an imprint of
the Crown Publishing Group, a division of Random House, Inc., New York.
www.crownpublishing.com
Stephen H. Baum has been an advisor and coach to CEOs for more than twenty
years, first as a partner with Booz Allen & Hamilton, the global consultancy
– where beyond the client work he was also on the appraisal and development
committee and mentored young associates — then as an independent
practitioner. Stephen’s book, What Made jack welch, Jack Welch is available
from Crown Business.
Visit <http://www.stephenhbaumleadership.com/>
www.stephenhbaumleadership.com
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