Column: Management that Makes a Difference
The other day, I went into my office with two colleagues, gave each of them a section of The Wall Street Journal, and we spent the next 45 minutes reading whatever captured our interest. When we were finished, we discussed the various articles we found, from finance to marketing to strategy to international business. Much to our chagrin, though not our surprise, none made any mention of the impact that the human behavior of executives had on the performance of their organizations.
For example, one article covered a large, international private equity (PE) firm that had purchased a variety of branded companies in the U.S. Not long after the transaction, the markets softened and the firm lost a great deal of money.
The authors of the article focused on how the PE firm had misjudged the market and made poor decisions around financial trends in the industry, and then explored how it could recoup its losses through additional transactions. What they did not do was provide any insight or express any interest in how the leaders at the firm came to the decision in the first place. Did they trust one another, argue freely before making the decision, hold one another accountable for following through on the transaction?
In my 30 years working within and consulting to organizations, I’ve learned that these behavioral questions are not only relevant to the success of any strategic decision, they are central to that success.
I learned this lesson more than 20 years ago while working with a client run by a famous CEO leading a well-known technology company. Anyone with a view into the sausage-making at the company could see that the leaders there, taking a cue from the CEO, lacked trust and rarely told each other the truth about difficult issues, choosing instead to protect themselves from possible blame.
Of course, the company eventually imploded and was sold to a competitor for a fraction of its previous value, devastating a regional economy and damaging the lives of thousands of families. When the media analyzed this catastrophe, what did they cite as its causes? Strategic miscues and bugs in the product. While those issues existed, they were merely inevitable downstream symptoms of the real underlying problem—the lack of candor and interpersonal rigor among executives.
So, what is the lesson here for CEOs?
First, be extremely skeptical about what you read in business media. That’s not to demean journalists who attempt to give readers compelling and digestible morsels using a limited number of words. It’s just the nature of media. And when you consider that those journalists don’t have the benefit of watching the sausage-making, they can hardly be blamed.
Second, and most important of all, do not let yourself fall into the same trap of bad forensic analysis when addressing problems in your own organization. It is both tempting and dangerous to take an intellectually lazy approach to identifying the root causes of our company’s successes and failures. But when we overlook the impact of interpersonal issues and behavioral shortcomings, we fail to see the full picture and leave ourselves vulnerable to making the same mistakes again and again.
While journalists might have an excuse for their misguided and incomplete analysis, CEOs do not. After all, they were witnesses to the messy processes that led to the decision-making and had their hands in the sausage all along.
Patrick Lencioni is founder and CEO of The Table Group and author of 10 best-selling books that have been translated into more than 25 languages. His expertise is organizational leadership, consulting to CEOs and their teams. The Wall Street Journal named Pat as one of the most sought-after speakers in America. Yet amid all that, he is first and foremost a serious Catholic, husband, and proud father of four boys.
Patrick Lencioni is the founder and president of The Table Group, and a prolific author of best-selling books on business management, particularly in relation to team... MORE »