Not Picking the Right Leader
Recently, happenstance dealt me a blow. Late one night, I received this quote along with a rather detailed email from a friend who found themselves working for a newly appointed boss:Nearly all men can stand adversity, but if you want to test a man's character, give him power.
Not that Abraham Lincoln was a distribution expert, but in this case, he had a great point. Allow me to share a few of the observations from the email and follow-up conversation.
The long-term and well-liked company President had finally retired. His successor was unanimously selected by the company leadership and was, by all accounts, a team player with charm and charisma. Under the guidance and tutelage of the former boss, things progressed remarkably well. The leadership team and employees alike felt good about the new president. Then tragedy struck.
The former boss, who had served as the Chairman of the Company, was struck with a mighty and fatal illness. The passing was unexpected and quick. Within months, the new President’s behavior switched from collaborative and open to pure dictatorial; and not a benevolent dictator at that.
The first major sign came when a long-time seller was discharged for no apparent reason. By all accounts, his only error was publically asking for an explanation of a new policy. This veteran seller made the mistake of telling the new boss, he disagreed with the decision and wanted to better understand the reasoning behind it.
Little by little, others met similar fates. Even the leadership team, which once shared ideas openly without feeling the need to hold back unpopular thoughts, was subject to multiple demotions and terminations.
Even the independent board, once made up of business leaders, industry experts and respected leaders, was slowly defanged and stocked with a gathering of the President’s old college buddies and high school friends.
Morale plummeted to a new and unprecedented low; never before experienced by the company. Rewards and bonuses, if they came at all, were handed out for blind personal loyalty to the new President. Decisions were avoided until those responsible could feel out the boss’s opinion on the topic. Even with the big guy’s blessing, if the decision worked out poorly, the punishment would fall on anyone connected.
Employees and managers with the resources and credentials to move on jumped ship. Those with limited options kept their heads down and did their best to tread water until something changed. The openings were stocked with more “Yes Men” from other industries.
What’s happening to the company? Like the employees noted above, the company seems to be treading water. Currently, tides are high, so they are enjoying some growth. Looking at reports from other companies, their growth is trending a bit below the market. However, company leadership manages to push self-aggrandizing memos to the employees and long-winded excuses to their suppliers. Adding insult to injury, the President has hired a consultant to help get his name mentioned in local newspapers and industry trade publications as a harbinger of business and social change.
What does any of this have to do with distribution?
I just read an interview with the new leader of a large distributor association. She’s one of those “Millennial types” yet sharp, with a firm grasp on our business and industry, lots of contacts and keenly aware of the world around her. She made a candid observation: “We are a Graying Industry.”
This “Graying” thing caused me to take pause and think more about distributors handing off the reigns to the next generation. I can think of quite a few distributors who have handpicked their successors.
How will your successor behave once they have both hands on the power of a new position?
Outside of a handful of power hungry psychopaths and narcissistic dictators hiding out in third world countries, very few people purposefully choose the path described above. Giving this fellow the solid benefit of a doubt, we can only assume this wasn’t a carefully played out plan to seize absolute power.
Let’s look at a few things which might have helped
There are things we can do to help new leaders stay on course and a lot of things they can do for themselves. We’ll start off with what we can do and what the future leader can do.
Create a culture of checks and balances. Create and empower a strong Board of Directors to serve as a safety mechanism to leadership going off the rail. Limit the new President’s ability to “stack the board” with old friends and admirers.
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| Some make their salespeople the punching bag! © Andesign101 | |
Establish a long term business coach to provide objective feedback to your ideas. If you and the coach always agree, you didn’t pick the right person.
Run an anonymous 360-degree review, where employees are asked to provide feedback to the leader in a safe and constructive way. The HR group should be part of the equation but I recommend using an independent third party for gathering the responses. A third party firm guarantees there can never be repercussions to the employee. In addition, a filter based on employee performance helps eliminate negative feedback from poorly performing employees.
Finally…
Leading a distributor requires a unique set of skills. Business acumen, propensity to plan, ability to understand customers and the drive to execute all come to mind. Most companies carefully weigh each of these when selecting the new person to take over the helm of the company. All I ask is you take pause to think about character and leadership style.
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