The latest financial reports were bleak. Leadership was challenged to act quickly…but didn’t. Within a year, the company filed bankruptcy. Within three years, this company that had been in business for 70 years was dissolved, with significant losses to bondholders, corporate vendors, and 16,000 employees. What killed this once-thriving multi-billion dollar company? And, more importantly, what could have been done to save it? Four things:
1. Lost Focus
For years, the company thrived under a culture of service to its members and providing quality products to its customers. Employees were highly valued, and in response, fiercely loyal. But then the focus shifted. A new CEO came on board. He brought two dangerous mindsets to the equation: “What’s in it for me?” and, “How do we one-up the competition?” Compensation and competition are important, but when they become the singular focus, the company starts to lose focus on its core values and mission. In this article, Rise Performance Group and John C. Maxwell provide perspective about the importance of finding a vision’s “true north”. As Mark Fenner, president of Rise Performance Group, notes: “A leadership team that is focused, not on themselves, but on strong mission, vision and values will not only survive – it will thrive. We see this no matter the size, no matter the type of organization.”
Previously, the company had a CEO who was growth-minded and people-focused. He realized the need for balance, so he hired someone named “Lefty”. Lefty was the numbers guy, the guy who questioned things. This gave the business two critical components at the top: the expander and the container. Together, they saw healthy growth, and the company thrived. When the new CEO took the reins, he failed to bring in a “Lefty” to create balance. Inc. magazine provides some great guidelines here for managing growth in a way that is healthy and balanced. It is important for leaders to surround themselves with those who have complementary strengths. If the members of your management team all think like you, it might be comfortable – but it could also be a sign of imbalance. Bringing on someone who respectfully challenges your thinking could strengthen and grow the company.
3. Bad Decisions
Under the new CEO’s direction, the company made several ill-advised management decisions. Though some later admitted to questioning those decisions in their own minds, no one was willing to risk asking hard questions. It was a case of weak leaders following a proud leader – a lethal combination. In his book, Today Matters, John C. Maxwell states that, “successful people make right decisions early and manage those decisions daily.” And there is a Biblical principle that advises that in a multitude of counselors, there is safety. As a leader, surround yourself with a strong cabinet of advisors – and strive to make the right decisions and manage them daily. Decisions are powerful tools.
Apathy was the final nail in the coffin. Had the CEO and top leaders of the company cared passionately about the company, its people, its stockholders, and its customers, it could have been saved. In fact, the divisions that were sold off in the process of dissolution went on to thrive under new and more passionate leadership. Rise Performance Group partner Bob Kaplitz comments: “In analyzing literally hundreds of case studies, we find apathy is corrosive. Employees become disillusioned when their suggestions are ignored. Then they conclude quickly,‘If management doesn’t care, why should I’”? This recent opinion article in the Wall St. Journal (http://online.wsj.com/news/articles/SB10001424052702304677904579536170749456890?mod=trending_now_1 ) discusses the issue of apathy and its effect on a company – or a country. As business leaders, it is our responsibility to create companies that thrive – and that requires us to avoid these four deadly sins of leadership.