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Is Your Team Stuck?

Injecting Boldness by Unlocking Leaders’ Emotions
April 05, 2012 by Michael Shanahan and Roselinde Torres
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In This Article
  • Uncertain times are also times of opportunity, when bold leadership and risk-taking are especially crucial to competitive advantage.

  • Yet the complexity and volatility of today’s environment are paralyzing many leadership teams.
  • Changing leaders’ behavior—which often seems harder than changing leaders—can ultimately yield a greater, more enduring payoff.

  • To get teams “unstuck,” switch the mental model: tap leaders’ emotions to shift their focus from fearing the risks at hand to aspiring to achieve successful outcomes.

 

How did Ford Motor Company manage to turn a record $12.6 billion loss in 2006 into a $6.6 billion profit by 2010—without a cent of government aid? What did it take for then-new CEO Alan Mulally to slash the product line by two-thirds and double investment in the remaining third? For him and his team to make such complex, seemingly contradictory decisions—massive restructuring alongside big bets? And how did they manage to pay off half of the $24 billion debt piled on to propel the turnaround?

Simple: bold leadership.

If ever there is a call for bold leadership and decision-making, it’s in times of uncertainty or adversity. Opportunity is ever present, particularly in tough times. With bold leadership, companies can not only prosper, but they can also exploit their competitors’ paralysis and make important, even game-changing moves that position them for enduring success. During the Great Depression, for example, companies such as Procter & Gamble, DuPont, and even General Motors took contrarian positions that turned out to be wildly successful. (See “The Great Depression: Time of Opportunity,” below.)

The Great Depression: Time of Opportunity

Many of the most storied corporate brands gained their foothold during the Great Depression through assertive leadership moves—not just by seeking efficiencies but also by innovating. Between 1929 and 1940, General Motors grew market share by 50 percent; Chrysler more than tripled its market share and saw its profi ts jump 181 percent.

General Electric cut costs but retained top talent to ensure R&D and innovation. By the mid-1930s, the company had introduced lighting for the first nighttime baseball game, its fi rst electric washing machine, and several kitchen appliances—and had produced generators to power Hoover Dam. Procter & Gamble boosted radio ad spending dramatically and kept up R&D spending, producing three new brands and making seven acquisitions during the Depression (twice its rate of acquisition in the following decade). DuPont almost doubled R&D spending and introduced neoprene (in 1931) and nylon (in 1939).

So what does it take to change the mindset and behavior of the team at the top? To shake them out of their risk-averse wait-and-see attitude, even when they know that inertia itself is risky? To inspire the requisite boldness so that they act ahead of the need, ahead of the competition—and before hardship or crisis makes action a necessity rather than a choice?

Often, as in Ford’s case, a company will bring in an outside CEO. Or the existing CEO will reshuffle the team and reorganize management, recruiting new blood and “retiring” established heavy hitters. That may signal change, but it certainly doesn’t guarantee it. Although change from within can be difficult (and without guarantees), the payoff from changing leaders’ behavior is potentially far greater. From a practical standpoint, changing leaders’ behavior—and grooming future leaders to equip them to face the new realities—may also be smarter, in light of the growing leadership deficit that companies are facing: of the 3,500 companies worldwide that The Boston Consulting Group surveyed recently, 58 percent indicated that they were lacking leadership for critical roles. (See “New Leadership Rules,” BCG article, May 2010.)

Consider the stories of two large companies and the strategies their CEOs used to overcome paralysis at the top and bring about vital change—by changing people’s behavior.

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