Wisdom from Rules for RenegadesJanuary 13, 2009
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Expanding a company is a process requiring constant change. One key quality for a leader is the ability to get back on track when something has gone awry Sure, competency, reliability, professionalism, a positive attitude, and respect for others are the qualities that will get you into the leadership game. But what do you do once you’re a player?
If there’s one thing I’ve learned about leadership, it’s that leaders are always course-correcting. If staffers aren’t following directives, good leaders gently guide them back on track. To get your staff to follow you, tell them where to go and then course-correct when they start to stray. Don’t hesitate to course-correct your entire company, and most important yourself. You’ll make mistakes, as will your team, your customers, and your board. And you’ll fix those mistakes by honestly taking stock and changing the way you do things.
Expanding a company is a dynamic process. You must constantly shift your strategy or approach as new competitors emerge, markets materialize (or fail to), and opportunities abound. There’s only so much you can plan for, so if you expect to correct your course as you go, you’ll be better able to make decisions with less info than you’d like, and to adapt when conditions change. Let’s look at what happens when leaders do, and don’t, correct their course.
The Hidden CEO
A chief executive officer I know named Jason talked his board into taking the company public before it was ready. The second quarter after the initial public offering, the company missed its earnings target. Wall Street was relentless—the stock was hammered down from $26 per share to $4. What did Jason do? Did he get out on the road, visit customers, sell more product, fly around to the regional sales offices? Nope. He locked himself in his office and wrote ad copy. Would writing a killer ad save his company? I don’t think so. Jason became invisible, and everyone knew he was hiding.
No course-correcting here—not by the CEO, not by the board. Two vice-presidents attempted course correction, and Jason promptly dismissed them. The situation went from bad to worse. Ultimately, six months too late, Jason was replaced. The company never recovered, and it was sold at a massive discount to a competitor.
A true leader would admit his mistake, rally the troops, reassure the customers, stare down that stock price, and turn it around. He would do this by handling customer and shareholder objections, pumping up the salespeople to keep them focused on closing deals, and buoying the staff to keep them motivated even though their stock was under water.
Patent Infringement Case
Then there’s Ray, the vice-president for engineering at a company that weathered an intellectual property fiasco. Two key engineers had quit and decided to create a competitive product. The engineers had, of course, signed employment contracts stating that whatever they developed was the company’s property, yet they conveniently chose to forget this. Years later these two engineers—who had raised millions of dollars in financing—had the nerve to lob lawsuits at the company they’d left, claiming patent infringement.
The vice-president was initially freaked out—how could his former staff claim the product he’d paid for was theirs? They were better funded than his company was, and the thought of spending years and all his reserve cash mired in lawsuits left him frozen with fear.
He was worn out and considered throwing in the towel, angry as he was. Once he calmed down and took stock of the situation, he realized it was key to correct course. He rallied the troops and got them engaged in finding the solution.
He led his team through the crisis and quickly uncovered a series of “smoking gun” memos (in addition to the employment contracts) that supported his company’s ownership of the product and patents. His CEO hired a killer intellectual property litigator and lobbed a countersuit at the two former employees.
Leaders Trust Their Instincts
That was the easy part. Now he had to help the vice-president for sales with the customers and sales prospects who feared having their now-entrenched products ripped out of their companies.
He quickly got buy-in across divisions. This meant that the CEO refused to let the lawsuits destroy his business, found some new sources of financing, and brought on additional advisers. The team was reinvigorated and ready to rock. Talk about course correction!
The vice-president for engineering started the corrective action—the vice-president for sales and the CEO furthered it! And only recently were the lawsuits settled in favor of the founding company, resulting in a hefty payment. The unethical engineers were ordered by the court to cease selling their stolen product.
Leaders trust their instincts. They know they’ll make the best decisions they can at a given time, and they’ll course-correct if things don’t turn out as planned.
Encouraging a culture of course correction leads to the most effective way to deal with disasters and encourage risk taking and ownership. In that culture, staffers know that no one’s head is going to roll if a mistake is made or a crisis occurs; instead all expect to simply hunker down and deal with it.
Owning the Outcome
Everyone is going to be accountable for his or her actions in a culture that isn’t based on blame. Accountability is the first step in ownership. The second is having control and responsibility for projects. If it’s yours, and you truly own the outcome, you’ll knock yourself out to make it work. This is the only culture where you can truly develop people—as executives and as human beings—and it’s the best way to foster entrepreneurship in an organization and keep it growing.
What leadership strategies do you follow? What has the outcome been? What issues do you face currently and what are your toughest business building or course correcting questions? Send them to http://www.AskChristineNow.com and be featured in an upcoming Q&A call.