Here is an article written by Margaret Heffernan for BNET, The CBS Interactive Business Network. To check out an abundance of valuable resources and obtain a free subscription to one or more of the BNET newsletters, please click here.
* * *
Warren Buffett, trying to describe the importance of leadership, once called it a “secret sauce,” arguing that it makes all the difference to the value of a business, even if you don’t quite know what it is.
I was reminded of the issue last week when I was in London and visited Winston Churchill’s cabinet war rooms. As you’d expect, they’re underground, dark and rather dismal, and neither Churchill nor his staff much liked spending time in them. That the government spent so much time above ground was due not to heroism but claustrophobia.
But on one level, I envied these men and women. They had a very clear, well-defined problem with an obvious goal: Defeat Hitler. How many business leaders yearn for so simply articulated a task! What’s easy to forget, in such nostalgia, is just how daunting it was. Three days before Churchill delivered one of his most rousing speeches — “this was their finest hour” — he confessed to a colleague that he expected them both to be dead within three months. A clear goal, yes. But with only the slimmest chance of success.
How did Churchill define leadership? In his own words, what he did was “keep buggering on.” In more contemporary words, what this meant was he and his Cabinet just kept going, putting one foot in front of the other, making the best decisions they could, many of which turned out to be wrong. He never made unilateral decisions, and he spent a lot of time in that bunker arguing.
I’ve never had much affinity for the business-as-war metaphor, and Sun Tzu leaves me cold. But what I respect in Churchill’s wartime leadership was his recognition that there were no magic bullets.
He had no illusion of control. Strategy, alliances, technology, and mental, emotional and operational discipline were all essential — for six long years. But there was no such thing as a quick fix.
When I meet with CEOs, they’re all eager to hear what other companies are doing. Their curiosity is driven by a lingering sense that somewhere out there must lie a solution, a quantum leap that will catapult their business out of recession and themselves out of the doldrums. They’re sick of recession, despairing of government, cynical about temporary market rallies and deeply nostalgic for the good old days of predictable if slow growth.
It’s a lesson any leader would do well to remember as we enter the fourth year of the credit crunch. If there were a magic solution, someone would have found it by now. Growth is elusive and, in a recession, more so than ever. Maintaining morale is hard but fundamental. No miracle — in the form of strategy, technology or stimulus — will substitute for mental, emotional and operational discipline. The only thing that leaders can do, and must do, is abandon the illusion of control and keep buggering on.
* * *
Margaret Heffernan worked for 13 years as a producer for BBC Radio and Television before running her first company. She has since been CEO of five businesses in the United States and United Kingdom, including InfoMation Corporation, ZineZone Corporation and iCAST Corporation. She has been named one of the Internet’s Top 100 by Silicon Alley Reporter and one of the Top 100 Media Executives by The Hollywood Reporter. Her books include The Naked Truth, How She Does It: How Female Entrepreneurs are Changing the Rules for Business Success , and the upcoming Willful Blindness. She has appeared on NPR, CNN, CNBC, and the BBC, and writes for Real Business, The Huffington Post, and Fast Company.
TAGs: Recession Doldrums: What Would Churchill Do?
Here is an excerpt from an article written by William C. Taylor for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
* * *
President Obama’s trip to Asia has inspired a wave of worried commentary about America’s diminished standing in the world economy. And there’s no bigger worrier than New York Times columnist Thomas Friedman, who has spent the last few years sounding the alarm about the challenge to the West of the rise of East. Friedman normally focuses his anxiety on China, but this past Election Day, he looked at India and a new generation of startups poised to disrupt established business models.
In particular, Friedman told the story of a startup in South Delhi called EKO India Financial Services. The fast-growing company uses cell-phones, software, and text messaging to allow migrant workers without access to traditional banking to transfer funds and save money — a low-cost answer to a big-time problem. In just 18 months, the company has 180,000 users doing 7,000 transactions a day and is already turning a profit.
It’s a wonderfully uplifting story — as well as, according to Friedman, a potentially big worry. “In the next decade,” he predicted, “we will see some really disruptive business models coming out of here — to a neighborhood near you. If you thought the rate of change was fast thanks to the garage innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get fully up to speed. I sure hope we’re ready.”
I guess I should be worried, although I’m not sure why it’s bad for the United States if brilliant entrepreneurs in India make life a little easier for their poorest countrymen, and eventually introduce their ideas to our economy. Isn’t that called progress?
Moreover, in their understandable urgency to alert us to the challenges of new competitors such as China and India, pundits often undervalue the power of Made-in-the-USA business models. American entrepreneurs still do their fair share of disrupting around the world, and we still have lots to learn about what innovative companies are doing right beyond our borders.
One case in point is the high-flying track record of Azul airline, the next act of legendary aviation entrepreneur David Neeleman. As the founder of JetBlue, Neeleman spent a decade building an airline that defined low costs, high quality, and a unique customer experience. After the famous Valentine’s Day Massacre of 2007, when a poor reaction to an ice storm left thousands of passengers stranded, JetBlue’s board forced the founder out.
Neeleman didn’t stay grounded for long. He took his entrepreneurial insights to Brazil, where he is using the JetBlue model (Azul means “blue” in Portuguese) to disrupt a comfortable oligopoly, which serves rich travelers well, but ignores the needs of 100 million lower-income customers. “People thought, [air] travel is for the elite, we travel by bus,” explained customer-services director Jason Ward, a JetBlue alum. “So we can help the realize that air travel is affordable, accessible, and that it’s for everybody, not just for the rich.” In other words, innovations by a wealthy American entrepreneur are broadening the travel horizons of tens of millions of low-income Brazilians.
Meanwhile, in London, banking customers are flocking to the innovations being unleashed by another wealthy American entrepreneur. Vernon Hill, the founder of Commerce Bank, is one of the most creative forces on the U.S. financial scene in the last few decades. The bank was founded in 1973 with a handful of employees, $1.5 million in capital, and one location in New Jersey. It sold itself 35 years later to Canada’s TD Bank for $8.5 billion, after Hill and his colleagues created one of the most original and distinctive brands in all of banking.
“Every great company has redefined the business that it’s in,” Hill told me a few years ago — and that’s what Commerce did in its business. In a bland, stodgy, colorless field, it created a banking experience around “retailtainment”— fun, lighthearted, surprising gestures that encouraged customers to visit the
branches and spend time there with the kids rather than engage in online transactions and treat banking like a utility.
Hill and his colleagues liked to joke that they operated on the “lunatic fringe” of their industry. Their business practices and corporate culture were so unlike any other bank that their competitors would not dare copy them, even when results showed how effective they were. Well, the lunatic fringe now extends across the Atlantic. In July, Vernon Hill opened the first of what will be many Metro Bank branches in London. Here’s how one magazine described the grand opening:
“On the sidewalk at Metro’s glitzy flagship branch, across from the Holborn tube station, dancers sporting vermilion fright wigs paraded on stilts. Dixieland bands tooted, shoeshine crews buffed, and waitresses toted giant trays of ice cream, 5,000 cups in all…Inside, the giant floor-to-ceiling windows and long, open granite counters lined with smiling tellers, sans Plexiglas, recalled the lobby of a fancy Las Vegas hotel. Signs rallied customers to LOVE YOUR BANK AT LAST and pledged NO MORE STUPID BANK RULES…’I’ve never seen a bank like this,’ says a street musician in attendance. ‘How can you not love a place that’s open on weekends and looks like a disco?’”
In one sense, Metro is more of the same — the Made-in-the-USA Commerce model exported to England. In another sense, it’s a revelation. Metro is the first new bank chartered in England in the last 138 years, a disruptive force that is bound to shake up the five long-established “High Street” institutions that dominate retail banking in the UK, and have created an industry that is even less customer-friendly than in the U.S. “Most banks look at every product line and try to slice-and-dice it: ‘Can we save money here, can we charge more there?’” Hill told me. “Great retailers don’t do that. They ask, ‘How can we make it easier, simpler, more fun to do business with us?’ They look at the whole experience. And that’s what we do.”
Look at the whole experience. That’s good advice for pundits trying to understand the power shifts between East and West as well. In a period of tumultuous change, we have much to learn from studying what other countries and competitors do right. But we also have much to learn from what our most gifted entrepreneurs do right. So let’s face the future with as much confidence as we have anxiety — and stop undervaluing the impact of one of our greatest exports, the American spirit of innovation.
* * *
William C. Taylor is cofounder of Fast Company magazine and author of Practically Radical: Not-So-Crazy Ways to Transform Your Company, Shake Up Your Industry, and Challenge Yourself, coming January 4, 2011. Please click here to visit his website. Follow him at twitter.com/practicallyrad.
Adam Bryant conducts interviews of senior-level executives that appear in his “Corner Office” column each week in the SundayBusiness section of The New York Times. Here are a few insights provided during an interview of Michael Mathieu, C.E.O. of YuMe, an online video advertising firm in Redwood City, California.
To read the complete interview and Bryant’s interviews of other executives, please click here.
* * *
Want the Job? Tell Him the Meaning of Life
Bryant: Do you remember the first time you were somebody’s boss?
Mathieu: Yes, my first management job was at AT&T, and I went from being an individual contributor to managing a small team.
Bryant: How old were you at the time?
Mathieu: Late 20s. I’ve always been pretty confident in my ability to do a job, so I kind of had this fearlessness. If I’d known what management was all about, I probably would have had a lot of fear, but going into it, as a young kid, I figured, “I can do this.” There was some apprehension because I’d never really managed a team before. So I had to learn very fast.
I think part of the reason I got the job was really my personality, which is about, how do I make everyone around me better? What can I do to help make people more successful? And I always thought that if I do that, it will ultimately make me more successful. So the transition was relatively easy because of that perspective.
I never had this management style where I would order people around. It’s really about, what’s our goal, and how do we, as a team, collectively make it happen? So my first management job was really treating myself not as a manager. I may happen to be on the organizational chart above you, but think of me as a colleague and how we can help each other be successful.
Bryant: How did you learn that lesson at a young age?
Mathieu: My parents were immigrants from Haiti, and both of them are doctors, against all odds. They’ve persevered, and the lesson they taught me was not necessarily humility, but that the key to success is to wake up every day and do the best you can do.
Their focus was never about competition, although I am competitive because I was an athlete as a kid. But my parents always taught me to be introspective and go after success with my own measurement, not other people’s measurements.
Luckily for me, my expectations were higher than what other people expected of me. I learned that collaboration and getting the most out of other people seemed to be where most people got their success.
I did karate when I was a kid. In karate, 90 percent of success is internal, preparing for that moment to win, and you do that by struggling internally about who you are, what you do, and how can you maximize your skill set for that moment when you do need to compete against other people. My sensei in karate never talked about himself. He never talked about what he could do. He always talked about the group, how we could help each other.
Because of the six kids in my family, I had to learn how to compromise and maximize. I think it’s a combination of having a large family and getting some early leadership lessons from something as simple as karate class.
Bryant: What about leadership lessons from particularly good or bad bosses?
Mathieu: You’re a collection of all your experiences, good, bad, indifferent, and great leaders you’ve worked with. Actually, you learn a lot from the worst managers you’ve had. You learn probably more than from the great managers.
Bryant: Did you?
Mathieu: Absolutely. I think my worst bosses were hyper-controlling. I’ve learned that leaders actually do the opposite, which is to give their best people complete freedom to do the job. The worst managers come in and believe, “O.K., I’m going to control this.” They’re very structured. And what I’ve learned is that actually stifles high performers.
People who are really good at what they do want freedom. They want to be able to be innovative. So I try to hire the best people and give them the freedom and flexibility to do the job they were hired to do. But they have to sign up for things to get that freedom.
Bryant: What are those things?
Mathieu: One is, make people feel like they’re part of the team. To do that, you’ve got to make people feel like they can come in and talk about anything with absolutely no fear of, “O.K., this could be stupid.” They need to feel like their voice is heard, and feel completely fearless to have those conversations with me.
Two, they have to be clear on what our goals and vision are. This is the mountain we’re trying to go after, and let’s be clear on what we have to do. And if you do sign up for that, you’re going to be accountable. If you give good people clear goals, you can let them be accountable and go after it in their own way. And then reward and recognize.
Bryant: Give me an example of how you reward and recognize.
Mathieu: I bring all of the U.S. employees together every two months. I want to tell them how we’re doing, what’s on my mind, and recognize people who’ve exhibited the leadership characteristics that we foster at YuMe. We give out an award, and that particular employee has it until the next vote. Then they hand it to the person who wins it next.
Bryant: How do people win the award?
Mathieu: People vote for the person who best epitomizes my mantra, which is: Be passionate about what you do and interested in making the people around you better. These people show humility.
They’re selfless. They will work for other people’s success. The people who win are the ones who are the most team-oriented. They’re not the ones who have the best skills. But they’re passionate about what they do. They’re a positive influence. They’re not in the lunchroom gossiping about somebody.
That’s one of my tenets. If you have issues with a colleague, go to your colleague and say, “Joe, this is what I’m thinking.” Have a candid conversation.
* * *
Adam Bryant, deputy national editor of The New York Times, oversees coverage of education issues, military affairs, law, and works with reporters in many of the Times‘ domestic bureaus. He also conducts interviews with CEOs and other leaders for Corner Office, a weekly feature in the SundayBusiness section and on nytimes.com that he started in March 2009. Bryant has been editing at The Times since May 2006, and was a business reporter at the paper through the 1990s, when he covered a number of beats, including airlines, aviation safety, executive pay and corporate governance. From 1999 to 2006, he worked at Newsweek magazine as a senior writer and then as business editor. Before moving to the national desk in 2010, he was deputy business editor. He was the lead editor of a series on the dangers of distracted driving that won a Pulitzer Prize for National Reporting. To contact him, please click here.
I’m a big fan of The Wisdom of Crowds, of Wikinomics, and Macrowikinomics. I have read all three of these books (and presented synopses of them at the First Friday Book Synopsis), and lots of articles about related practices.
I am also a non-techie (a Luddite, or, if you prefer, an idiot). I understand nothing about design, interface, user interface. I’m just a guy who likes his iMac and his iPhone and, hopefully, after the second one comes out (I was told to wait for the second one by a brother who is a techie genius) an iPad.
Why do I like Apple so much? Because an idiot like me can figure out learn to use the product very quickly. It is easy to use. Ease; simplicity… these are the critical ingredients.
Here is an article that makes a case that I am “right” about Apple. And maybe there are some realms where dictators really are wiser than the crowd. It is written by a techie, someone who understands all this stuff. The title says it all: Open User Interfaces Suck by Timothy B Lee. Here are some key excerpts:
In short, if you want to create a company that builds great user interfaces, you should organize it like Apple does: as a hierarchy with a single guy who makes all the important decisions. User interfaces are simple enough that a single guy can thoroughly understand them, so bottom-up organization isn’t really necessary. Indeed, a single talented designer with dictatorial power will almost always design a simpler and more consistent user interface than a bottom-up process driven by consensus.
This strategy works best for products where the user interface is the most important feature. The iPod is a great example of this. From an engineering perspective, there was nothing particularly groundbreaking about the iPod, and indeed many geeks sneered at it when it came out. What the geeks missed was that a portable music player is an extremely personal device whose customers are interacting with it constantly. Getting the UI right is much more important than improving the technical specs of adding features.
… In short, I don’t think it’s a coincidence that the devices with the most elegant UIs come from a company with a top-down, almost cult-like, corporate culture.
Here’s a line from a former Apple employee, still a big, big fan (from here):
When working at Apple, you definitely feel like you’re a part of a group of people who will make a serious dent in the universe.
I’ll say this: Apple made a serious dent in my universe.