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FirstCutsFramework Consulting Inc. November 2010: Issue 35

InsideEditorial 2Article 3Discussion 8

EditorialFirstCuts - a source ofprovocative ideas forCaribbean business-thinkersArticleTime management andproductivity in the eraof smartphones.Tips, Ads and Links

EditorialAs we close out the year, andenter the holiday season, Ihave to look back with somegratitude. This was the yearof dodging bullets, it seems.The recession settled in forthe long haul, and in spite ofit I am happy to be able to behere to publish anotheredition of FirstCuts. We justmissed the full wrath ofHurricane Tomas, but werehit by Tropical Storm Nicole inaddition to a drought. That'son top of a state ofemergency that closed downcommerce for about amonth. And that was justJamaica!Barbados lost its PrimeMinister to cancer in a matter

of months 2 weeks ago.Trinidad and Tobago changedits government in the blink ofan eye, long before electionswere due.We are watching carefully forsigns of cholera, nowravaging Haiti, and I guessthat their earthquake wasthe first sign of trouble whenit hit in January.Could it have been a moredifficult year? It's certainlythe toughest I haveexperienced as an adult, andI have learned the value ofgetting up each morning, andgetting on with business.-- Francis

3389 Sheridan Street #434Hollywood FL 33021, USAPO Box 3109Kingston 8, Jamaicaphone: 954-323-2552phone: 876-880-8653fax: 509-272-7966francis@fwconsulting.comwww.fwconsulting.com

The audio podcast ofthis ezine is about 18minutes long and can befound atfwconsulting.podomatic.com.

ExpressmonoRail at Flickr

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Snow White and the Many Dwarves

Many Caribbeancompanies are trapped ina bubble of their ownmaking. They havearrived at a point at whichthe CEO or ManagingDirector is the brightest,most energetic andcreative person in thecompany, and there is nopossible successor. TheirVice Presidents, Directorsand managers are faithfuland loyal employees whoare quite good at followingdirections, but none ofthem has what it takes tosomeday run the companythey have served for solong.As I work with thesecompanies, I haveobserved somebehaviours that tend tokeep the status quo inplace.In many cases theyoriginate with the CEOherself, but they appear toproduce positive results,so there is no pressingreason to change.

However, over a period ofmonths and years thesehabits coalesce into a kindof policy that results in theSnow White Effect -- astrong CEO, and a bunchof much weaker,undeveloped managers:the many dwarves. Oncethis effect takes root, it'sdifficult to dislodge evenwith the most enlightenedexecutives at the helm.However, it's notimpossible to change.Executives and boardsmust come to understandthat their job is to bring upa new generation ofleaders, not just ensuretomorrow's profits. To doso they must examine andconfront the degree towhich they have fallenprey to the Snow WhiteEffect.

What is the SnowWhite Effect?Companies that arestuck in this mode are

often unaware of it.Things seem to begoing well, and the keyperformance indicatorsmight all be moving inthe right direction,giving the board someconfidence that the firmis operating on a soundfoundation.However, it only takesthe sudden departure ofthe company's topexecutive to illuminatethe cracks that haveexisted all along. Theyshow that the CEO'senergy, charisma andability to motivate otherswere a function of hispersonality, and didn'ttruly reside in theinstitution. Results beingproduced came aboutbecause there was oneexceptional leader, andlots of mediocre followers.

Other indicators might be:1. Leadership that hasbeen in the same hands

The Idea in BriefHere in the Caribbean we have a number of companies that are initially successful but are unableto grow past a certain size, no matter what they do. In many cases, that size corresponds to aheadcount of 150-200. which scientists tell us is the maximum number of people that can worktogether, and be managed closely by one person who doesn't delegate.When companies cannot scale up to the next level, they never exit the startup phase and achievetheir full potential. The cause can sometimes be traced to a CEO who behaves as if he is special(Snow White) and is surrounded by a lack of talent (his many dwarves.)To grow, regional companies need to ensure that they train leaders, not develop personalities, andpush their CEO's to delegate differently while demanding higher skills from managers.

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for a long time, perhapsthat of the founder, asmall group or family2. High turnover oftalented executivesdrafted in from othercompanies3. Second-tier executiveswho show remarkableloyalty, but few otherleadership skills4. Exaggerated deferenceto the top executive whenmaking key decisions5. The need for the CEOto be included in everyconsequential decision, inorder to avoid itssubsequent reversal6. The absence of acredible succession plan7. A remarkable andgrowing gap between aCEO and her subordinatesin terms of self-expression, energy levels,ability to communicateand willingness to takerisksIn one regional financialinstitution, I met a SeniorVice President whosevoice took on a reverentialtone when discussing hisboss, "Marlon." He triedto convince me that theCEO (whose first name heused whenever he could)was a wise and brilliantman who was one of therichest persons in theworld. (He quoted themagazine that listed hisearnings, as proof.)

Therefore, they could notbe having the issues that Iwas inquiring about.In another regionalcompany, the CEO'ssecond in command didher best to persuade methat the culture of thecompany didn't have animpact on the results.Instead, I needed tounderstand howsuccessful they were, andthat everything revolvedaround "Mr. Smith," whohad no need to attend to

such things, simplypreferring to fire non-performers at the first signof trouble.What left me with a sickfeeling in both cases werethe ways in which theseexecutives used thenames of their bosses, asif their very sound infusedthem with confidence.Incidentally, both

underlings lost their jobs,"Marlon" has experienceda steep loss in fortunesand "Mr. Smith" lostcontrol of his companyshortly before it failed.Many top employeesacross the region arequite satisfied to stepback and allow their topexecutives to lead theway, thereby keepingthemselves out of thepublic eye. They come torelate to the top executiveas a parent who is incharge of their welfare,and they submitthemselves to theirsuperiors in ways thatsound as if they couldhave come from Paul, theNew Testament author,who urged wives tosubmit themselves totheir husbands, andslaves to do the same totheir masters.While this relationshipmay be a comfortable andfamiliar one for regionalemployees who weretaught these norms ofbehaviour in church,school and at home, it

What left mewith a sickfeeling... werethe way intheseexecutivesused thenames of theirbosses.

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actually endangers thecompany's future.Dangers to theCompany's FutureA company that fails toactively develop CEO-likequalities within the ranksof its employees exposesitself to awesome risks. ACEO who resigns,becomes ill or needs to bereplaced immediately caneasily leave a vacuumthat no-one else can fill.In most of the companies Ihave observed in theregion, boards toleratethis risk unknowingly, anddon't do what it takes toask uncomfortablequestions before atragedy strikes. Theydelude themselves intothinking that theconsiderable skills of theCEO will be available longenough for theirreplacement to besomeone else' problem.Also, in some cases thereis a danger to the CEOherself. She can getburned out as she accruesbroader, deeperresponsibilities in thecompany. When projectsaround her fail, she makesprivate decisions to dothings herself in thefuture, and often shesucceeds. One CEO Iknow taught herself bothhuman resource andmarketing functions, andin no time assumed bothresponsibilities. CEO's areso smart, and so willing to

take risks, that they oftenbecome stronger andmore powerful over time,even as others aroundthem stagnate.Snow White becomesmore beautiful with eachpassing day, while thedwarves stay just as uglyas the day they firstshowed up.

What can Caribbeancompanies do about theSnow White Effect oncethey realize that it exists?Our research hasuncovered threestrategies: they can hirebrighter people, push theenvelop on existing talentand delegate when failureis possible.

Enlightening the CEOOftentimes, CEO's mustbe confronted directly withthe fact that they havecreated an internalmonarchy, even when theevidence is staring themin the face. The situationmight require an

intervention from theboard, or an objectiveoutsider like a coach topoint out the fact that theCEO is head andshoulders above theirdirect reports in too manyways. If the conditionexists, they need toappreciate the fact thatthey have helped tocreate the imbalance witheither their actions orinaction. For most, thisarea is truly a blind-spot,as they are unable to stepoutside their role andobserve workingrelationships they havethat might work in theshort-term, but threatenthe company in the long-term.They often come to seethat the very tools theyuse to produce results ona daily basis - theirintelligence, quick-wittedness and courage -"blows away" othersaround them and inhibitsthem in developing thesecharacteristicsthemselves. The fact is, aCEO is often paid to dojust that, (blow othersaway) and was probablypromoted to the topposition in order to do iton behalf of the company,on a very public stage.This need to demonstratea commanding presencehas been backed up bystudies that show thatCEO's are, on average, 3inches taller than theaverage adult male.

Snow Whitebecomes morebeautiful witheach passingday, while thedwarves stayjust as ugly asthe day theyfirst showed up

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However, it's easy for aCEO to forget that oncethey attain the topposition, they are nolonger in competition withthose who now report tothem. Many continue tothrive on being the centreof attention, and the eyeof every hurricane as theyhave always done: takingup more and morebreathing room inexecutive teams, at theexpense of theirsubordinates. Afterwinning the prize, theycan't stop the habit ofpromoting themselveswhile demoting others.Instead, to be successful,they must turn theirformer adversaries for theCEO position into the bestpossible candidates forsuccession.

They need to see thefuture of the company asentirely dependent on theactions they take todevelop their successors.As they see the future inthese terms, they candevelop some newpractices that, ifmaintained, would reducethe gap between themand their hired dwarves.Practice #1: HireBrighter PeopleMany CEO's hireexecutives who areneither as smart nor aswell-qualified as they are.They feel threatened byothers who they fearmight be better, and do

what they can to preventthem from being selected,sometimes using excuseslike "they are over-qualified."

Others actually do hirethese people, often togreat fanfare, but then goabout undermining themonce they come on staff.Sometimes this is doneconsciously, but moreoften than not CEO's actreflexively to defend theirturf as the smartestperson in the room. Insome extreme cases, Ihave seen top executiveswho can't stop themselvesfrom having the last say inevery public conversation.Each intelligent insightfrom another person isimmediately "topped" byan attempt to make asmarter comment.These behaviours oftencome from feelings ofinsecurity, and a concernfor looking good at alltimes, in order to avoid

being seen as needy orincapable.The truth is, it takes agreat deal of confidenceto hire people who arebetter, and only a handfulof top executives I haveworked with seem to becomfortable with thispractice. Also, only a fewencourage theirsubordinates to shine andseek their own spotlight.Of course, discouragingbright people from joiningthe company is a short-sighted practice, asshareholders, owners andstaff all suffer when thebest talent available isignored in order toaccommodate a brittleego. The future of thecompany is compromised,and over time, executiveteam members onlybecome known for theirmediocrity, andbootlicking behaviours.Practice #2: Push theEnvelope with ExistingTalentMany managers in ourregion's companiesquietly shelve theirambitions over the yearsand come to believe thatthe greatest contributionthey can make is"company loyalty." Theygive up the hope of everattaining a significantpromotion, and settle intoterminal positions as theyawait retirement. Theyrelax, knowing that theirchances of being fired are

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slim to non-existent, andstop growing their skills,just like most peoplearound them.Top CEO's don't acceptthis kind of performanceas given. Instead,they know that theexecutive team isalways being seenby employees asthe brightest andbest, and as anexample to befollowed. Whenexecutives stopimproving theirskills and becomestale, employeesconclude thatmediocrity isrewarded and thatthere is no need to pushthemselves to higherperformance. In theserecessionary times,employees spend moretime worrying about theirjobs than trying toimprove their skills.It's up to the CEO toensure that this doesn'thappen by focusingsignificant effort onrefreshing the skills of hisemployees, especiallythose who are closest tohim. Unfortunately, hisbest tool for making thishappen is one of thehardest skills to develop:feedback.

I'm amazed at how littletime regional executivesspend developing thisparticular skill, given howimportant it is to fosteringnew talent. This isn't

unusual, however as it'sdifficult to give "negative"feedback, which is whymost performance reviewconversations in mostcompanies keep gettingdelayed for so long.

When a CEOsystematically weakenshis executive team byrefusing to give qualityfeedback, and fails to hiretalented outsiders whocan upset the apple cart,they end up surroundedby mediocrity that neverexposes them to higherstandards. Like SnowWhite, they remain the"fairest of them all." Thisis the reason why so manyexecutives at all levelsbelieve that the fact theyare in the job means thatthey are already capable,in little need of furtherlearning and have stoppedchallenging themselves tocontinued growth.

Practice #3:Delegating to AvoidFailure

Many CEO's only delegateroles or jobs to otherswhen the risk of doing sois low. They pick small,inconsequential stuff, andparcel it out in bits andpieces, taking care tostay well within theircomfort zones.The end-result is thattheir subordinatesnever truly come toappreciate what it'slike to be in the hotseat, fully accountablefor eveything thathappens in an entirecompany. They don'thave sleepless nightsthat CEO's oftenexperience when theymust make decisions withimpartial information.Also, they never challengethe CEO to delegate moreto them, as they also wantto avoid getting in overtheir heads, in keepingwith the proverb: "Themore monkey climb, themore him expose'."

A few CEO's I have workedwith have developed thediscipline to continuallystep outside their comfortzone when they delegate.In fact, they use thedegree of discomfort theyfeel as a guide. Whenthey don't feel anydiscomfort they know thatthey need to pick biggerchallenges for theirmanagers.Failure becomes a greaterpossibility, but thesebrave CEO's come to

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understand thecapabilities of those whowork for them in a waythat only comes throughstretching them to theirlimits. They aren'tcontent to let themstagnate into old, tiredand outdated dwarves.SummaryWhen these threepractices are undertaken,it's possible to grow seniorexecutives to the pointwhere they are ready torun entire companies, andto grow out of the shadowof even the most talentedCEO's. Jeffrey Immelt,Jack Welch's successor atGE, and the other CEO'swho used to work at GEhave made the transitionsuccessfully and so can

the executives in yourcompany.It won't happen byaccident -- GE executivesfollow a rigorousdevelopment process overseveral years -- and manyregional CEO's simplyrefuse to give up the glorythat comes from beingSnow White.However, an enlightenedminority work hard totransform their dwarvesinto leaders, and take careof their company and itsfuture for many years tocome.FC

Shortly after I completed this issue of FirstCuts, I noticed asimilar article over at the Harvard Business Review. It's entitled"Bringing out the Best in Your People" from the May 2010 issue,and it describes three ways in which leaders accidentallydiminish their team­members with their strengths: by beingvisionary, having the gift of the gab or being creative. It's quite asimilar idea to the one I describe in this article.If you'd like to discuss this article, simply come over and visit theFirstCuts page on Facebook, or visit the page on my blog thatcovers this issue, Chronicles from a Caribbean Cubicle.

Discussion

PodcastsRemember, this issue of FirstCuts is available viapodcast: www.fwconsulting.podomatic.com. Also,I'm going to be selling a compilation thumb­drive ofall past issues in both voice and text formats. Ifyou're interested in purchasing a copy, let me knowas I'm planning a discount: http://ReplytoFrancis.info

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