We are sitting in the boardroom two years after the last CEO resigned wondering what has happened to this once great and dominant organisation. It is all too easy to make simple comparisons between the last regime and this one that paint the old days as the halcyon time when everything was going in the right direction. The current CEO and board are some of the best I have worked with, yet their stewardship of the business has been one long period of decline in sales, profits and share price; none of the graphs make enjoyable reading.

I remember what it was like when the last CEO was there and had a little experience of working with him. It didn’t last long and we parted ways amicably enough, he was dubious about the value of our work, I was left bemused by the mismatch between the leader I spoke to and the share price plaudits he was receiving.

He had joined as the business needed something of a fresh start; sports and adrenaline loving, happy to swear and shout in meetings, with a forensic eye for detail and numbers, he would remember every number and every line of any documents flashed in front of him. He ran a board but to all intents and purposes was the CEO, the CFO, the HR Director and the COO. That was just for starters.

He bounced, I’m not using this as a metaphor, he literally bounced up to me as we said hello for the first time. He had been appointed to lead the highest profile division of the group and came with a glorious CV of success in the past twenty years. Big smile, shiny teeth, highly polished shoes and a crisply ironed button down shirt. We spent a couple of hours together and as I walked away I had little idea who he was behind the delightful exterior. There are some words that were used over and over again. “Fantastic” is the most repeated. As he stood with his hands on his hips he moved from foot to foot, light on the balls of his feet like a tennis player preparing to face a serve. He had one focus, profitability, hitting his numbers and improving the share price; if this could be linked directly to his brilliance as a CEO then all the better.

For the next two years the business hit profit numbers every quarter and the share price almost doubled. This was achieved by an intense focus on costs: in many places halving the headcount for a particular business unit; any requests for outside consultants had to be personally approved by him; employees were all ranked on performance, their bonuses reduced and the bottom ten per cent removed each year; the top two management ranks were all individually analysed by a recruitment organisation and ranked; any time numbers in the business fell below expectation he was onto them immediately with public remonstrations and shaming followed by quick and deep cost cuts to get the business back on track. You get the idea. He revelled in his reputation as the alpha male who stood no nonsense, started work at 0500 (after a gym workout) and was constantly on an aeroplane. When he came to your business for a review he wanted you to tremble. And you did, usually after spending many days preparing, checking and testing your work to an inch of its life.

There are different versions of this CEO hero; cumulatively, despite lots of movement and dynamism, they are stuck. Despite everything being ‘fantastic’ they are struggling to bring difference and energy to the organisations they are responsible for. And left to their own devices will manage their businesses’ decline over the next twenty years, retire wealthy and not know what more they could have done to make a difference.

I sound critical, I’m not, every business needs to be efficient and many allow their costs to run away with them in times of success. The only thing that went wrong here was hard to spot at the time because of the euphoria in the share price.  It was that the organisation was efficient and dying. There were no pockets of life anywhere, the creative juice of the place had gone to sleep or walked out of the door. This was now a place where the internal systems were antiquated and riddled with fragility; the morale of those who were left was down in the dumps; those who had an option elsewhere took it; over time there was a realisation that new ideas had little currency unless they were to do with driving costs down further; there were no competitive new products to match the advances being made by others in the market and the business was losing ground in the newer high growth markets.

The problem for us is to see and then call this out early enough. If we continue running our organisations as highly efficient machines, they will die, some of them slower than others but they will go. There have to be some conversations in the middle of the euphoria that comes with the benefits of cost cutting about the next difficult disorienting stage and then the creation of new life at the margins of the current business. 

  • Where are the conversations about endings, transition and new beginnings taking place?
  • How can you identify them and amplify them?
  • What is the effect of extreme efficiency on the life of your organisation?
  • Where might you slow down on the efficiency a little to give the new sources of life a chance?
  • What, where and how are you experimenting with the new?
  • How much attention do these three phases get in your leadership team meetings and in your organisational
    communication: endings, disorientation and beginnings?
  • How are you developing your leadership pipeline to be able to live in all three phases at the same time?

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