5 Leadership Lessons 1. Overcoming doubts about your own ability However confident and self-assured we might be, we often face situations in leadership where we honestly wonder to ourselves, “Will I really be able to do this?” or “There is no way I can do this”. Gerstner is quite candid about his initial reluctance to take on the role of CEO of IBM. In the book, there are occasions especially during the initial few years, where he admits being overwhelmed with the task at hand. And yet, he hung in, resisted the urge to throw in the towel, and took the tough initial decisions that helped IBM survive. Lesson 1: As a leader, it is normal to sometimes have apprehensions and doubts about the journey ahead. However, it is usually the initial period that is the toughest and if you can hang in, get through that, and just survive, it gives you a platform to thrive later. 2. Culture is Everything In one of the memorable passages in the book, Gerstner mentions how he came to realize that culture is not just one of the most important ingredients of a successful company, but the most important. If we look at the IBM turnaround a bit more closely, perhaps the single biggest accomplishment during his leadership was the culture change that he was able to influence – from an inward, technology centric approach to a customer focused, business centric approach. Lesson 2: If we are to be truly successful as leaders, we need to devote significant individual time and effort to influence the culture of the team and organization. This applies equally to the two diverse scenarios of an established large organization where a culture transformation is needed, or in the case of a new organization where the culture is yet to be established. When we look back at our leadership tenure, the fundamental question to ask ourselves would be “What sort of an impact did I make towards the culture of the organization?” 3. Decisions and Risks The near-death scenario at the company when Gerstner took over meant that there were rapid decisions to be taken from day one, and each involved significant risks. Whether it was preventing the breakup of the company into “Little IBMs”, or the move into services, or the acquisitions during his tenure – each demonstrated how he took the tough calls being aware of the associated risks. Lesson 3: The speed of decision making is often as important as the decision itself. Also, our ability as a leader to take risks directly influences our speed of decision making. In other words – aversion to risk slows down decision making. As leaders, we might want to set a self-objective over a period of time to increase our speed of decision making, or increase the quantum of risks being taken, or both. 4. Org Structure: The whole is more important than the parts So many of us belong to organizations large and small, where there is no doubt about the brilliance of the individuals or groups who make up the larger organization. Yet, we are acutely aware that somehow the results and performance of the overall organization don’t reflect that. Similar was the case at IBM when Gerstner took over. He mentions how he was convinced that the company, in spite of being perilously close to shutting down, was made up of some of the most brilliant and competent people he had met in his professional career. It is interesting to note how Gerstner pushed through restructuring and realignment by informing some of the groups that they were no longer P&L units of their own, but support functions for the core business units. We see the analogy in several large organizations today with matrix structures, for example in the IT industry – with the vertical axis being industry and customer focused and the horizontal axis being technology focused. While the original purpose of the horizontal axis is to support the vertical one, this gets defeated the minute the horizontal axis is measured on the same yardstick of P&L as the vertical one. Lesson: Several problems that Gerstner faced had the structure as the root cause, and there lies an important lesson for the leadership and management teams of several organizations. In the name of decentralization and giving authority to the individual groups of the organization, a culture of “local empires” can get created. Each then becomes a fiefdom with its own identity, goals and objectives – and often these fiefdoms operate with so much independence that they compete with each other rather than with competitors. One factor triggering this internal competition is that individual groups have the same objectives regardless of whether it suits the original purpose of the group being set up or not. This is definitely something for leaders to guard against and address. 5. The (Business) Universe revolves around the Customer Gerstner describes how the company that he took over was very inwardly focused – the structure and culture were both aligned inwards towards the company itself being at the center of most activities. He recognized this early and put in place several measures to ensure that every employee understood it was the customer who was the center of the universe and not the company itself. Another of my favorite passages in the book is when Gerstner indicates his amazement at how obsessed the industry is with technology, regardless of how useful it might be for the end customer. He goes on to suggest that every individual in the technology industry spend time at customer locations to try and understand what customers really need technology for. Lesson: It is an interesting exercise for each of us to reflect on the organizations we are a part of, and ask ourselves whether the customer is truly at the center of our universe. Some simple questions to ask would be Has the organization structure I am a part of, been put in place keeping the customer in mind? Can it respond rapidly to addressing a typical customer request? Does the large majority of the organization (including myself and my team) spend a large majority of time per day on customer focused work? Does every member of my team have a deep understanding of the top three customers that the team is working with, including the business problem that we are attempting to help the customer solve? For the work that she or he is currently doing, can every team member name three customers to whom that work might be applicable over the next three months?
Posted on: Mon, 22 Sep 2014 17:01:03 +0000