LEADERSHIP: WHAT PRICE ARE YOU PAYING FOR SILENCE?

Published: 2011-01-31   There are 10 comments ... please add yours below

This Potshot was prompted by:

Prompted by “Epiphany in Dearborn”
The Economist, December 11 2010

URL: http://www.economist.com/node/17673258?story_id=17673258

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You can turn a business around by helping people face the facts and take tough decisions
not letting a cancer of silence and pretending undermine the business and its culture

Who said the following? “We are forecasting a $17 billion loss and no one has any problems!” Alan Mulally, after the first meeting with his senior team on arriving to turn around Ford in 2006. For the Mafia, omerta or “the code of silence” hides crimes. At Ford, as in many other companies, silence is the crime – destroying value and eventually viability. Do facts and faults get talked through in your business; or is bad news stifled? What would your people say? Here are some actions Mulally took and others I’ve picked up over the years.

  • Monitor change: be brutally honest. Don’t, as the US auto companies did, first disdain Japan’s small cars, then their reliability and lastly their environmental credentials.
  • Recognise faults: face up to your risks and constraints. Mulally made this safe at Ford – thus building trust and mutual support and encouraging people to help each other solve problems.
  • Think the unthinkable: consider what else might go wrong; equally what options you have and their implications. Consider possibilities that go beyond the norm.
  • Reinvent strategy: upending the conventional wisdom, opening up new options, learning from your competitors – or other industries. Nothing can be sacred.
  • Re-align resourcing: make sure that funding and support (including your time and attention) follow the new priorities – giving others the courage for what needs doing including selling non-core businesses such as the prestige European brands Ford had previously acquired.
  • Take decisions: being as tough as is necessary. Turnarounds and setbacks call for courage and speed. Not every choice will be right but the status quo is the worst choice of all.
  • Seek diversity: of experience and views. The cultures of old businesses often reflect only the skills and mentality that built the business, lacking capacity for new challenges.
  • Ask customers: find out what they value today. Talk to them. Do they still want a wide range of chassis options or would they prefer reliability and economy?
  • Build teamwork: break down fiefdoms. At Ford, Mulally unleashed a new era of working together to solve problems – gaining synergy across the group.

Unlike Chrysler and GM, Ford didn’t seek protection in bankruptcy during the GFC. It was already progressing on its recovery. By now, it has cut $14 billion of operating costs and racked up its fifth quarterly surplus in a row – thus allowing it to slash $13 billion of debt.

Most of us work in businesses that are tiny compared with Ford. So, if it’s possible there, then why not in our own smaller operations? We don’t have to be Alan Mulally – all we need is to copy his commitment to dealing in facts, openness, courage and, above all, getting everyone working on the same team.

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Dr. Timothy Pascoe AM
PhD (Cambridge), MBA (Harvard), BE & BEc (Adelaide)
Creator, V|E|C|T|O|R Leadership®



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Comments (10)

Timothy Pascoe - date: 2011/02/07 08:08 am


Dear Peter,

Thanks for your comment - an interesting story. It doesn't matter where we turn, we can find "silence" happening - and undermining performance. I've seen it in families, in clubs, etc. as well as in business. And, particularly, in family businesses where there is dominant founder or patriarch. No-one dares to say the emperor has no clothes. It's an organisational cancer.

Best wishes and again thank you,

Timothy

Peter Cook - date: 2011/02/06 02:11 pm

Dear Timothy,

This is a great article and it resonates highly in my mind. A few years ago I tried to help a fading punk rocker and 'two hit wonder' to circumnavigate the world in a record breaking rock world tour on a par with cult 'rockumentaries' such as 'This is Spinal Tap'. One of the main reasons that the tour failed was the star's unwillingness to face up to facts and admit when things went wrong. He paid a huge price for this hubris.

Your Ford story is a scaled up version of this, with wider lessons for all to learn from. More on the 'comedy of errors' that was the John Otway World Tour at www.academy-of-rock.co.uk/tour all the best to you and yours.

Peter Cook

Timothy Pascoe - date: 2011/02/02 07:26 am


Dear Dave,

Thanks for your comment - and the passion behind it.

You're right re Mulally when you highlight "the need to copy his commitment to dealing in facts, openness, and courage and, above all, getting everyone working on the same team."

Re your broader question: big firms, as you say, have the benefit of more resources. However, small ones have flexibility - and faster feedback loops in terms of market and internal information.

My experience (as leader and consultant)covers both large and small enterprises. My takeaway from both is the need for effective leaders, who understands the key factors for success in their industry and organisation. People, who work out what's needed and help others to see the future, what's possible, how it can be achieved, etc.

My Leadership Action Planning tool was developed to help leaders think through exactly those issues, find the right actions and thus maximise their leverage within the specifics of their own business - whether large or small.

I look forward to hearing how you find it.

Best,

Timothy




Timothy Pascoe - date: 2011/02/02 07:11 am


Dear John,

Thanks for your kind comment.

I hope we'll be hearing from you again sometime.

Timothy

Timothy Pascoe - date: 2011/02/01 05:32 pm

Dear Noone,

You're right that businesses (and individuals) often hold to views or strategies that are patently failing and/or are not fact based. We've all done it at some time.

You're also correct that the culture must accept mistakes as part of being in business. As the old saying goes: if you make no mistakes, you're not trying hard enough.

All the best,

Timothy

Dave Outlaw - date: 2011/02/01 03:52 pm

Tim

Most of us work in businesses that are tiny compared with Ford. So, if its possible there, then why not in our own smaller operations? We dont have to be Alan Mulally all we need is to copy his commitment to dealing in facts, openness, and courage and, above all, getting everyone working on the same team.

This comment made me think a little more about what we are up against as small businessand I am sure you are no giant either so you can appreciate what I am saying.
While I do agree and I do ascribe to do the same...I find for a small company to be successful requires a bit more than just this. Unlike the major corporations we can be out of business in a heartbeat, Because larger organizations fly higher they get to go on and correct their mistakes and live to tell about it.

In the small business world we fly close to the groundwe do not have the luxury of resources or political pullthat gives us the time to pull out of the nose dive In my opinion we have to react quicker and be more alert and agile...our leadership style has to have more tactical components which are different that the strategies used by the major corporations.

do you agree? And if not would you mind expounding on this thought a bit more?

Thanks
Kind Regards

Dave
Outlaw

John Kitney - date: 2011/02/01 01:34 pm

Timothy,

Good clear summary of business strategies. Excellent.

Best wishes

John

Noone Joseph - date: 2011/01/31 09:10 pm

Many corporations promote a "green" culture where performance indicators and KPIs are forever green despite all the material and/or factual evidence pointing to the contrary. For obvious commercial or other reasons, companies cannot always admit mistakes but admitting mistakes is the first step in tackling the root causes. So if you want to change things, you have to promote a "no-blame" culture and ensure that decisions taken collevtively are not then blamed on individuals. This also means senior management taking responsibility for decisions taken because even if senior management can't be aware of everything, they can't constantly blame subordinates for errors taken under their watch. At the same time, you must promote an empowering culture where individuals take responsibility for their actions and if they make mistakes, accept to acknowledge them so that the errors can be corrected swiftly. Mistakes will happen, especially in a high pressure, high speed environment. Individuals will own up to mistakes allowing the appropriate corrective actions if they feel they are in a no-blame culture. If they can do so, they will have less fear of making mistakes and therefore make less mistakes. So to conclude, three key actions: senior management must take overall responsibility, a no-blame culture must be the goal and finally, empowerment is key.

Timothy Pascoe - date: 2011/01/31 05:27 pm

Dear Langdon,

An insightful and forthright comment. Many thanks. As you say, people prefer to ignore the elephant in the room. Not least since, if recognised, elephant issues are normally much more demanding and time consuming than the lesser ones people prefer talking about.

As well as tagging elephants, as leaders we also need to be courageous in speaking up on any aspect of an issue where the full story or the key priorities are being avoided. This is difficult but a key sign of a courageous leader.

Keeping to the animal metaphor: we not only need to recognise the elephant in the room but also (in the words of the old saying), bell the cat.

Timothy

Langdon Stevenson - date: 2011/01/31 12:07 pm

This week's Potshot is especially powerful to me. So many things in our society are effected by this exact problem. "As long as we don't mention the elephant in the room (that our company is going own the drain etc) then (I) will be ok".

There are now so many elephants everywhere in our economy and society in general that we (as leaders) must start recognising them.

The floods in Queensland, Australia and our government's response to them (cut spending and raise taxes to "rebuild") is a classic example. All very noble and no doubt will win them votes.

The elephant though is the next storm. And the next. Our leaders appear to be acting, but really they are only re-acting. They are still remaining silent on the critical issue: how our climate is changing and what the consequences of that will be.

I vote for breaking the silence and taking up the personal responsibility of fixing the problem, whether it's in our families, our work, or our greater society.

Langdon


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