STRATEGIC THINKING How Leaders Can Focus on the Big Picture by Elsbeth Johnson NOVEMBER 09, 2016 Every leader knows that they shouldn’t micromanage

STRATEGIC THINKING How Leaders Can Focus on the Big Picture by Elsbeth Johnson NOVEMBER 09, 2016 Every leader knows that they shouldn’t micromanage — even if some of us still do. But while we understand the downsides of micromanaging and taken action to avoid it, we still haven’t sufficiently embraced the upsides of not micromanaging. The main upside is that leaders have more time to spend on what we call macromanagement. Although there are different definitions of this term floating around, when I talk with executives, I use it to mean managing the big issues rather than the small ones. Time and effort spent on macromanagement enables leaders to be as clear, decisive, and disciplined at the macro level — on COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 2 the big strategic questions the organization is facing — as their managers are at the micro level, i.e., about how these decisions might be implemented. So, what are these big strategic questions that leaders aren’t spending enough time on or aren’t answering in a sufficiently clear or disciplined way? They are questions about: • why the organization exists and what its purpose is • what it offers (and does not offer) its customers, and how and why this offer delivers value to these customers • what this produces for the business and for shareholders — the critical outcome metrics by which the organization will be judged • how the people within the organization will behave — toward customers, other stakeholders, and each other I don’t know many leaders who would say they don’t think these questions are important. But I know lots of leaders who don’t spend enough time answering them, and even more who don’t answer them with sufficient clarity so their people can then get on with delivering the answers. Lack of Time Isn’t the Only Reason Leaders Ignore These Questions A lack of time, too many so-called “priorities,” and the gnawing presence of the urgent masquerading as the important are usually quoted as the main reasons why leaders’ answers to these macro questions aren’t clear enough. But I suspect an even more fundamental reason is at play here. For the past 30 years, the literature on leadership and empowerment has advised leaders not to be too prescriptive about these questions, lest they undermine employee empowerment. We have been told that participative leadership, rather than prescriptive leadership, is what we should aim for; that organizations should be agile, with “change the only constant”; and that empowerment is critical for employee satisfaction and long-term value. I agree with the third point: Empowerment is critical. But, as my own research shows, in order to be meaningful, empowerment requires some boundaries, some rules that have been decided on within which empowerment can be exercised. Ironically, in order to truly empower employees, leaders need to be prescriptive, at least about certain things. And these things are precisely the macro questions of why the organization exists, what it will deliver, and how it will behave. If leaders aren’t providing clarity and certainty about these critical macro questions, then the best, most motivated employees flail in their so-called freedom because they can’t be sure they are doing what leaders want or are using their time and resources in the best way possible. And because they want to do that, they find this lack of prescription stressful — and a huge constraint on them acting in an empowered way. Equally, the less keen and the less motivated on the payroll take this lack of COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 3 prescription by leaders as license to do what they want (and perhaps what they were already doing), which, of course, may be diametrically opposed to what the leaders had in mind. Making time for such macro questions is not a luxury — it is a necessity. And is it not something that can be delegated or outsourced. Nor is it something that leaders should do only once a year, at the strategy offsite or at the start of the strategic planning round. It needs to become part of their weekly routine. OK, I Made the Time. Now What? Once you’ve set aside time on a regular basis to wrestle with these questions, how can you come up with the best possible answers — and refine those answers? Here are some tips from those I’ve seen do it well: • Make choices in the negative. For everything you decide you want (a particular market positioning, an investment in a new product, a new capability or function), articulate what that means you can’t do. This forces you to think through the consequences of choosing these options by thinking about what the trade-offs are for each choice you are making. • Pretend you have no money. When organizations are strapped for cash, they have to make hard choices about what to spend money on because they don’t have enough. It’s often during such times that leaders describe themselves as at their most strategic. But it’s easy to diet if someone’s padlocked the fridge — what happens when you get the key back? All too frequently, when the cash starts to flow again, leaders start “choosing everything” again, and it’s this oxymoron that sows the seeds of the next bout of underperformance. Having too many priorities means you don’t really have any, which puts your organization’s implementation capability under strain. It also compromises your own leadership bandwidth, reducing your ability to macromanage. So pretend you’re cash-strapped — it will act as the ultimate constraint on your desire to choose everything. • Talk to the unusual suspects. These could be inside or outside your organization, but whoever they are, choose them because they are likely to disagree with you, challenge you, or tell you something you don’t know. To ensure you have a ready supply of such people, you may need to look again at your strategic network — it may have gotten too stale to offer you such connections. If that’s the case, weed out the deadwood and actively recruit people from different sectors, skill sets, and backgrounds who can help you test the quality of your macro answers. Questions to ask them include: “Why will this not work?” and “What do I have to believe for this not to turn out that way?” Being challenged and having new information may well change your answers; even if it does not, it will make your existing answers more robust. • Exist at the macro and micro-levels simultaneously. One of the CEOs I most admire can do this — she goes from 10,000 feet to ground level in 30 seconds, linking her answers to the macro questions (this purpose, this brand positioning, this customer offer) to the micro operational implications for the business. But what she does really well is come back up. Because it is all too tempting, once you have gone micro, to stay there. But the main point of going micro is to test the validity of the macromanagement views you are coming to. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 4 Of course, the prize for middle managers here is huge — once leaders are sufficiently clear and prescriptive about these macro questions, middle managers can get on with implementing them. But the prize for leaders is arguably greater still: They might no longer be needed for the daily grind of managing the business and can instead use their time and effort for the true work of leadership. That is, they can think about the strategic rather than the tactical, focus on the future rather than the present. After all, isn’t that why they wanted to become leaders in the first place? Elsbeth Johnson, Ph.D., is an Adjunct Professor of Organisational Behaviour at London Business School and a Visiting Fellow at the LSE. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 5 Copyright of Harvard Business Review Digital Articles is the property of Harvard Business School Publication Corp. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.LEADERSHIP When Charismatic Leadership Goes Too Far by Dan Ciampa NOVEMBER 21, 2016 In most cases, charisma is a useful quality for CEOs. Many work hard to develop charismatic skills. Especially when an organization is asked to become more innovative and to perform beyond normal levels, having followers with an unusually strong belief in the leader and their vision increases the odds of success. But charisma has a dark side that can sap the strength and potency from an organization. If it grows too powerful, the leader becomes inefective at motivating others and at driving the business. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 2 Charisma is often misunderstood. Historian Arthur Schlesinger helped popularize the term in the 1960s. As it became used widely, he complained that the word had been reduced to simply “a chic synonym for ‘heroic’…or even just ‘popular.’” It became widely used during and after World War II, when it was used to describe Franklin Roosevelt and Winston Churchill…but was just as frequently applied to Adolf Hitler and Benito Mussolini. The sociologist Max Weber defned the “charismatic organization” as one that exists not due to a legal structure or a strong tradition but to the personal magnetism of the person leading it. That’s one reason the word “charismatic” often comes up when describing the dynamics of cults. Up to a point, having a magnetic leader — someone that people want to follow — is good for an organization that has to go through signifcant change. Charismatic leaders are skilled at articulating a compelling vision that inspires followers. They’re also adept at reading the environment and sensing the needs of followers to tailor a message that will have the most impact. Charismatic leaders are good storytellers who use symbolism and metaphor to make stories come alive. But true charismatic leadership is more than just a set of techniques to excite followers. Rather, it comes from the leader’s observable behavior, displaying a deep belief in the promise and possibilities of the organization, a sense of optimism for the probability of success, and a willingness to take personal risks and make sacrifces to turn the vision into reality. Often, followers admire a charismatic leader enough to actively try to develop some of the leader’s distinctive qualities in themselves. Bu charisma can be a slippery slope. Over time, deepening loyalty creates negative changes in the leader’s behavior. A leader must be attuned to early signs of this shift, which sounds easier than it is. There are fve phases that take place as a leader’s charisma shifts from a positive to a negative quality: The frst phase is characterized by the subtle sense on the part of followers that the leader does not want to be questioned. Followers may begin to quietly complain that the leader is becoming hubristic and acts like they believe they’re the smartest person in the room. The second stage fows logically from the frst: sensing the leader’s diminished appetite for being questioned or challenged, followers begin to self-censor, asking fewer questions and no longer playing devil’s advocate. One person reported: “The last time I [pushed back], he came back with a bunch of reasons why I was wrong, and I felt stupid. I’m not going there again.” Instead of fostering healthy dissent, the charismatic leader begins to be surrounded by “yes” people. As the leader begins to hear only praise and admiration, they enter the third stage: a negative cycle in which compliments and agreement cause them to become overconfdent. Leaders in this stage create their own sense of reality and become resistant to evidence that they may be incorrect. While the frst COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 3 and second stages mostly involve recognition by followers, the third stage involves a distinct shift in behavior by the leader. If nothing is done to stop this cycle, it progresses to the fourth stage. Since the leader’s views and actions are the only ones that matter, followers reduce their willingness to be proactive. They wait for directions and become passive. Decision making slows down. Eforts at strengthening teamwork stop, and meetings change from a time of joint decisions and buy-in to being when the leader announces what everyone else should do. Leaders in this situation complain: “If I want something done right, I need to do it myself.” Because followers begin to grow disillusioned, this stage ends with rising employee turnover. The ffth stage is characterized by people continuing to follow and ostensibly do only what is necessary but with a deep diminishment in enthusiasm and spirit. They still hear and comply with what the leader wants, but the passion is gone because they don’t feel that they are a part of it anymore. Eventually, they stop listening and become cynical. Creativity and productivity decline. What was once a shared, common vision is now just the leader’s vision. The leader feels unsupported and followers feel estranged. What should leaders be aware of to prevent a slide down this slope? First, charismatic leadership is as seductive for the leader as for followers, and the better one is at it, the easier it is to be blind to signs of trouble. Second, the relationship between leader and followers is delicate and requires constant tending. If not managed well by both, a slippery slope can lead to behavior that will destroy the success that they have achieved. Third, while both leader and followers have responsibility to manage their relationship, the leader has far more power to determine the outcome. If he or she does not allow for feedback and dissent, followers will accommodate rather than push back. Fourth, the slippery slope that results has certain points where negative efects can be reversed, but if they’re ignored, the accelerating momentum will be impossible to stop, causing failure that damages the leader and organization. Because each situation is diferent, there aren’t steps that will always avoid or solve problems. In general, though, there are two areas where leaders, especially charismatic ones, should concentrate. One has to do with the culture of the organization, and the other is about themselves and how they lead. Sliding down the slippery slope will be less likely if the culture emphasizes open communication, including a structured method to extract learning from every success and mistake. Forums must exist where the big bets of the strategy are debated, including a talent plan that ensures a match between the strategy and the people who must achieve it. Feedback must be a company norm that people are trained in, and it must be encouraged and rewarded. On the personal front, the keys for the leader are self-awareness and self-management. Being selfaware is, in efect, believing there’s a camera flming every move one makes, a humbling mindset COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 4 that encourages leaders to view themselves as followers do. The leader must make the choice to let others in on their thinking; the right people could include a board member and direct reports with the skills and the license to ofer advice. Managing stress must be a priority. Depending on the leader’s needs and personality, doing so could include such steps as structure or personnel changes, restructuring one’s administrative system to conserve time, wise use of a balanced set of trusted advisors who act as honest brokers, and tending to one’s overall wellness, perhaps through an exercise program or meditation. Charisma, when it’s based on deep conviction of shared success and when it’s skillfully projected, can help a leader be very efective and an organization thrive even during difcult times. But avoiding its dark side requires the leader to add attention to the culture, self-awareness, selfmanagement, and, perhaps most of all, the humility necessary to truly listen. Dan Ciampa (DC@danciampa.com) is a former CEO, an adviser to boards and chief executives, and the author of five books, including Transitions at the Top: What Organizations Must Do to Make Sure New Leaders Succeed (with David L. Dotlich, Wiley, 2015) and Right from the Start: Taking Charge in a New Leadership Role (with Michael Watkins, Harvard Business Review Press, 1999). COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 5 Copyright of Harvard Business Review Digital Articles is the property of Harvard Business School Publication Corp. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.

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