Management Turnover as Change Agent

Wednesday, November 19, 2008

Recommended reading - Meet your new leader - How the fallout from the financial crisis could breed a new type of corporate leader.

Jennifer Reinhold wrote a piece in Fortune that explores the possibility we are entering a new ear of CEOs. Reinhold examines a number of different academic studies and analyses that contend a new ear of CEO leadership is upon us.  According to the story,

… a new model is emerging. Collins (Jim Collins author of Good to Great) thinks that legislative, not executive, skills are now ascendant - that top CEOs will be those who are able to create the conditions for things to get done rather than hand down orders (as Hank Paulson learned, what worked at Goldman Sachs didn’t fly in Congress).

David Gergen, the political expert and director of the CPL at Harvard, agrees. “The CEO of the future is going to have to be someone who deals well with government,” he says. The truth is, these days a CEO cannot fully control his destiny in a world of competing entities, ranging from regulatory agencies to angry shareholders, from consumers to foreign powers.

The ability to look beyond the short term to the horizon and inspire employees is another must, given what looks like a prolonged economic slump. Xerox (XRX, Fortune 500)’s Anne Mulcahy, for example, has brought the company back from the brink by rallying her employees around the challenge itself rather than throwing money at them. At Home Depot (HD, Fortune 500), CEO Frank Blake accepted an annual pay package worth one-quarter of his predecessor’s, and he is also finding creative nonmonetary ways to motivate employees, including giving merit awards for great customer service and assigning store workers more decision-making power.  

There is a degree of truth to the article’s premise but do not expect visionary and imperial CEOs to disappear too quickly.  Anyone interested in executive leadership or growing trends in business should check out the Fortune piece. 

1 comment:

brettsd said...

As a young professional I am very happy that corporate leadership has begun to change, and it looks like for the better. The previous way of managing quite simply does not work well with my generation. We respond so much better to bosses who engage, challenge, and work with us to solve problems than those who spout decrees from their ivory, corporate tower.

As another example to bolster your case for changing attitudes of CEOs, Best Buy has recently created a Results Only Work Environment where there are no set schedules, meetings are optional, and you are promoted/rewarded based solely on your work. To both create and implement this program the executives at Best Buy turned to a 24 year old employee, and the results have been dramatic: decreased turnover, increased productivity, and increased satisfaction among employees. Just the fact that executives trusted this task to a non-management employee, let alone someone who is not even 25 is revolutionary, and shows how much things have changed from even a few years ago. You can read more about it in a book they wrote: Why Work Sucks and How to Fix It.

Even though we are going through a downturn right now, I believe that the changes occurring in management will lead to greater productivity as the C-Suite gives more responsibility to non-manager employees, focuses on increasing engagement of employees, and leverages the talent of the next workforce: Generation Y.