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The recycling of leaders in an organisation is a sign that the organisation is an exclusive club, or, even worse, that it cannot attract new talent. If the latter is true, the future is truly bleak.
Two of the world’s leading innovation thinkers, Whitney Johnson and Juan Méndez, argue that we are at our best when we are learning something new.
“As we approach mastery,” they wrote in the Harvard Business Review, “our learning rate decelerates.”
As people reach the summit of their learning, they become competent, yes, but they also become complacent, which is when the decline begins.
The drop is compounded by impatience with the basic and the mundane, such as lobbying young financial analysts who make big decisions that move markets.
The patience of dining the whining wanes as the leader deals with various competing interests.
The big obstacle to be overcome in any big comeback story is the ability of the protagonist to master the humbling art of consensus with “the small and the ignorant”.
Overcome that, and the comeback kid is immortalised, but most fail to do so, and so they plunge into the abyss of the damned.
The only way to stop the vicious recycle of leaders is for the organisation to put enough money into and pay enough attention to the development of its young people.
Profits in the case of business and votes in politics are a result and not the causality. They are not achieved overnight, but through a relentless programme of doing what is right for the people the organisation serves and for the environment in which they live.
A worker who fails to do what is right for his or her employer eventually gets fired; by the same token, an organisation that fails to do what is right for its customers or voters, as the case may be, will lose them to the competition.
Jack Welch, the former chair and CEO of General Electric, shocked the world when he made an about-turn and criticised short-termism.
One commentator wrote that Welch’s Damascene moment was similar to a drug kingpin saying crack is not healthy for you.
Welch was at the helm of General Electric for two decades. In the first five years as its leader, he reduced staff by 25%. He perfected the art of corporate culling – every year, he fired 10% of the worst performing managers.
Welch started the shareholder-maximisation movement with his famous speech titled Growing Fast in a Slow-Growth Economy. He delivered on his promise to shareholders, and the share price grew more than 4 000% during his tenure.
In hindsight, it is obvious that Welch was mostly concerned with rewarding himself. He cleverly engineered the board of directors. He was heard saying that the compensation committee must be chaired by someone older and richer than you; someone who would not be threatened by the idea of you getting rich too.
Under no circumstances should the committee be chaired by “anyone from the public sector or a professor”. When he retired in 2001, he walked away with $417 million.
Once Welch left General Electric, it became clear that the “house that Jack built” was in fact a house of cards. His creative accounting could not withstand scrutiny, including his opaque financial arm General Electric Capital, which was often used to top up any profit shortfalls.
John Byrne, the co-author of Jack Welch’s book Straight from the Gut, disagrees. He says Welch did not build a house of cards and he blames Welch’s successor Jeff Immelt for the decline.
Welch’s mistake was choosing the wrong person to run the house.
“The only mistake Welch made was in picking the weakest of three potential successors. It is, surely, the biggest management error of Welch’s career,” Byrne wrote in USA Today.
Choosing a leader based on short-termist sentiments is deadly. Only waste should be recycled; leadership must be fresh.
Kuzwayo is the founder of Ignitive, an advertising agency
