19 February 2011

Getting a Good Fit

It was announced recently that Time Warner Inc. had forced out Jack Griffin, chief executive of the media company's Time Inc. publishing unit after less than six months on the job.  This according to an article in the Wall Street Journal.

The main reason for this separation coming from inside the company seems to be a lack of "fit" between Mr. Griffin and Time.  So Jeff Bewkes, CEO of the parent company, decided to cut his losses and let Mr. Griffin go.

One of the more important things not on any resume' is "chemistry."  This partially explains why companies, even those who take their time in succession, often fail to ask the right questions.  Will this person fit culturally?  Organizationally?  Alongside current management?  With the board?  With our customers? 

Is there such a thing as a perfect fit?  Once in a great while.  Most of the time a more realistic succession goal is a close fit.

Sometimes the situation requires an incoming leader to be different than the current culture, especially in a turnaround situation.  I often think of Lou Gerstner going to IBM in the 1990s in the midst of that crisis.  He was a one-man "counter-culture."

With the help of a lot of people in the company, Mr. Gerstner led one of the great recoveries in the history of business.  The inside story is told with clarity in his book, "Who Says Elephants Can't Dance?"  http://www.amazon.com/

From press reports, it sounds as though Mr. Griffin had a mixed bag of things going against him:
  • He succeeds a long-time executive, Ann Moore, who was there more than 30 years.
  • His behavior is described as "imperious."
  • Early meetings were called, some starting at 7:30 a.m.
  • There was a clash of personalities and styles.
  • An over-reliance on outside consultants.
  • A refashioning of sales and marketing to reflect his former company, Meredith Corp.
We look forward to hearing his side of the story, and there are always two sides.

Short-tenures often follow long ones like Ms. Moore.  Why?  It is primarily due to a period of transition.  Businesses need to work their way through the process of changing leaders. The price for this transition is often paid by the person willing to take on an assignment of this kind.  That is why "interims" are appropriate in certain circumstances.

Some of the blame for Mr. Griffin not working out belongs to Time Warner.   What were the expectations?  How thorough was the vetting process?   Who signed off on the hire?   

The biggest predictor of future behavior is frequent past behavior--so an "imperious" nature should not have been a surprise.   

This termination shows how even big corporations with all the right HR resources can come up short. 

The take-away is how quickly Time Warner moved to correct the mistake--six months.  Failing to deal directly with problem executives is the number one reason for CEO failure according to best-selling author and consultant, Ram Charan.  Mr. Bewkes, the CEO of Time Warner, decided Mr. Griffin was not a good fit, decided not to provide coaching, and acted promptly to change course.

What is the application for your organization?


(C)  Bredholt & Co., Inc.  All rights reserved.

09 February 2011

What Strategy Is

"...If you are not genuinely pained by the risk involved in your strategic choices, it's not much of a strategy."  --Reed Hastings, CEO, Netflix 

Strategy is about making choices. 

The above quote from Reed Hastings puts an important qualifier on what it requires when it comes time to making strategic decisions inside your organization--you have to feel some "pain" in the process.

If there is little or no pain then maybe the choices being made are not all that strategic. 

Two individuals who helped my thinking about this subject over the years are Ram Charan and Michel Robert.  Both narrowed strategy down to choices or building blocks--what to be, whom to serve, what to offer, etc. Often led by something that becomes a driving force (customer service), but is complemented by other things (quality products and distribution).

The decision by Apple to focus on design and technology.   Southwest Airlines choosing to fly one type of aircraft--the B 737 (although this is likely to change with the acquisition of Air Tran Airways).  McDonalds saying "no" to pizza.  The company buying Donatos Pizza in 1999 and selling it back to the founders in 2003.   

So what else is strategy?

It is about choices plus a mixture of other things. It’s a term that, as someone noted, “weaves a complex web of ideas, insights, experiences, goals, expertise, memories, perceptions and expectations all of which provide general guidance to specific actions in pursuit of particular ends.”

An easy way to remember this concept is to think of strategy as what the organization wants to be—a picture of how the organization could look at some point in the future.  Therefore communication plays a central role in this process.

Strategy includes the framework (criteria) for making choices that determine the nature and direction of the organization.

The pre-condition of formulating strategy is a clear and widespread understanding of the ends to be obtained. No amount of strategizing or planning compensates for the absence of a clear and widespread understanding of the ends sought. When in doubt, think “results.”

The risk of not being clear includes missed opportunities, fragmented and wasted effort and working at cross purposes.

How an organization gets to where it wants to go is integral to the process.  More time should be spent on implementation than in strategy formulation.  Strategy is successful execution.

There also needs to be congruence between corporate strategy and the strategies of others within the organization. Congruence does not mean that business units are pre-empted from having their own strategy.   A large organization is too complex, too diversified to be a monolith.

While others within the organization require their own strategies these must complement one another and be supportive of the corporate strategy.

I read once that staffs tend to be the "wild card." Without direction and accountability they can go off on their own direction—and will without clear expectations.   Without this congruence among staff, resources are often misaligned and results postponed or lessened.

The highest arc of strategy belongs to the CEO. Everything flows from this position.

The most overlooked aspects of strategy are people and the allocation of financial resources. Get the right people first and they will identify the right strategy and hopefully make it a reality. The wrong people aren’t likely to do either very well.

Do you feel any pain in the choices being made?


(C) Bredholt & Co.  All rights reserved.