Mark Hurd, the golden boy CEO of the Hewlett-Packard
turnaround was forced to resign recently amid a sexual harassment scandal. As a
colleague of mine described in a recent post on his blog, “Hurd was a
no-nonsense, low key, under the covers (no pun intended) manager who
engineered a remarkable turnaround for HP.”
What went wrong?
This announcement happened coincidently just one day
after I interviewed thought leader Peter Winick about “Who
Do Smart People Make Dumb Mistakes?” Our discussion wasn’t focused on the
irrational tryst seeking decisions of Hurd, Tiger Woods, John Edwards, and
Eliot Spitzer or the career-sabotaging behavior of superstar ball players like
Michal Vick, Plaxico Burress, and the shocking list of characters we read about
daily. Our conversation was more targeted, focusing more on business than
personal decisions – although you’ve got to wonder if you can separate the two.
One of the reasons Winick sees smart business people
making bad decisions is that “they fail to question their assumptions.” That’s particularly true for managers with years
of experience and a successful track record. But that example only highlights the need for
every leader to ask himself if what worked in the past will work in the
future. In other words, is the
assumption that past performance is a good indicator of future success wrong? Winick believes that many decisions that work
out badly can be traced to a lack of questioning: what were the circumstances that surrounded
success in the past? “Does the history
surrounding the success really matter…or can it be a detriment?” asks Winick. “We
don’t ask that question enough.”
One example given by Winick is the fate of a manager who
climbed the career ladder in a locally-based physical plant gets promoted to
manager of a globally dispersed business with a virtual workforce. “If all you know is working in an office
peering over your reports’ shoulders, history may not be repeated when forced
to manage people thousands of miles away.”
Another business example we discussed was the failure of government
bureaucrats and hospital administrators to consider the costs associated with
implementing electronic health records.
The assumption is that electronic records will improve portability,
continuity of care, and minimize mistakes. Those potential outcomes are all
true. However, the actual process of
entering the data alters the way most health care providers have learned to practice
medicine. The cost and challenges
presented by converting from a paper to electronic records was and still is woefully
underestimated. The assumption that
doctors and other providers will simply begin tapping on a keypad instead of
pushing a pen on paper without affecting the way care is delivered is naïve. Unfortunately much of the success of the
recently passed health care reform rests on a successful conversion to
electronic medical records.
Members of a Vistage LinkedIn group are currently
discussing what they did differently during the past year to change the way
they did business to recover from the recession. Several common themes evolved, mostly using
words like “retrenchment,” “refocus,” and “going back to our core competence.”
While many Vistage and non-Vistage members alike are enjoying the fruits of
their labor, looking inward for strength is a universal panacea. In fact, for quite a few companies,
refocusing on their core competence of old was just comfort food. New strategy was just a mental exercise. Why?
Unfortunately for many businesses, the assumption that what worked in the
past will work in the future is based on too much hope and not enough reality.
Winick suggests that leaders need to quickly pass through
stages of grieving for the loss of business and seeing “their 401Ks shrink to
101Ks.” They need to get beyond denial
and anger, he says.
Unfortunately Winick sees many smart and successful
people currently trapped in the bargaining stage of grief. Winick is completely flabbergasted when he
hears business owners and executives say “flat is the new growth.” When he hears business people accepting their
current state of affairs as fate, he cringes.
“Flat is not the new growth,” he says empathetically. “Growth is still
growth. Somewhere there are 2 guys sitting in a garage like the 2 Google boys. In 3 to 5 years, we’ll see a new generation of
smart guys who really took advantage of opportunity during the recession. Once
you get to a place of acceptance, you can see the new world and now ask: how am
I going to win?”
Winick also doesn’t encourage executives and owners to
throw out everything. He recommends just
taking inventory and testing assumptions.
The first thing Winick suggests small business owners do is realize
that, for many, their business is an extension of their personality. The
personality of the owner in the past then became the default culture of the
organization. If that’s the case, changing
the direction of the business may now require shifting the mindset of the
Heed the advice of Peter Winick. Test assumptions. That’s what successful thought leaders do. Have you tested yours today?
Listen to the full interview with Peter
Winick on Workforce Trends Blog Talk Radio.