Jumping to Conclusions

One of the first mistakes a new manager makes is to use just one data point or one input to come to a conclusion.  It could be a personnel decision, or an operations decision, but in any case, you cannot get an accurate assessment if listening to only one source.  Because Dick says something about Betsy, for example, doesn’t mean that it’s true–there are always at least two sides to every issue and every problem.  I see this all the time in my consulting work.  Even top managers can get riled and jump to conclusions before knowing the complete story.  While corporate life can get messy and its sometimes difficult to reconcile legitimate and conflicting functional objectives, improper political agendas and even spurious ego-driven aggressions make it far worse.  The quality of a leader and the culture make all the difference, for better or for worse.

What to do when growth hits a plateau

Companies of all sizes go through growth curves:  Times of healthy growth followed by a leveling-off and a growth plateau.  It has happened, for example, at Apple when steep growth periods for Macs, iPods, iPhones, and tablets were each followed by plateaus until the next new product hit.  Going through these cycles is normal.  The key is what to do when you are about to hit a plateau, or already in one.
When weak companies hit a growth plateau they typically dismiss it because they’ve become complacent, thinking that growth will certainly continue — like Blackberry when the iPhone came out.  “It’s just a toy,” they said, “it will never be accepted by the corporate market.”  When it becomes clear that the plateau is real, these companies try hard to protect their turf.  Remember the market skirmishes between Kodak and Fuji?  Finally, when protectionism doesn’t work, and customers begin to abandon in large numbers, the reality sinks in.
The way stronger companies get out of a growth plateau is through innovation.  Sometimes it’s product innovation, like Apple; and sometimes it involves changing the entire company like Intel did in the 1980s.
How soon will your next growth plateau hit?  And what are you doing to increase innovation in your company?

New fad: CEO incentives for succession planning

A hot corporate fad, the Wall Street Journal reports, is paying CEOs incentives to do succession planning.  The reason is that new CEOs fail at a fairly high rate.  I find this interesting in several ways:

  • First, CEOs are notoriously bad at picking their own successors.  Yes, there are exceptions, one of the best was the Reg Jones selection of Jack Welch to succeed him at GE.  But there are many more failures than successes.
  • Second, it shows just how weak succession planning is at these companies.  Too often it’s an administrative exercise conducted by HR that generates a lot of paper and opinions, but doesn’t truly generate penetrating discussion of key people, and more importantly, result in meaningful development of candidates.  That the Jones to Welch transition was successful wasn’t a fluke–read about how that succession was conducted, and how succession is practiced at GE, and you’ll understand that it is a rigorous process.
  • Third, it points out the need for leaders to lead, not just in getting results, but in building internal capability for the future.  Peter Drucker, Tom Peters, and other notable management writers have always emphasized that a fundamental task of a manager/leader is to develop their direct reports–to make them more and more valuable.

Every company needs leaders who develop people and who drive a cogent succession process.  Is yours as rigorous and effective as it should be?

More on this topic:  For 10 Ways to Strengthen Your Leadership Pipeline, click here.

© Bob Legge 2014  All rights reserved