The Uncompromising Leader : Leaders of High-Commitment, High-Performance Organizations Refuse to Choose Between People and Profits  

Oleh:

Eisenstat, Russell A. ; Beer, Michael ; Foote, Nathaniel ; Fredberg, Tobias ; Norrgren, Flemming

Jenis: Article from Bulletin/Magazine - ilmiah internasional
Dalam koleksi: Harvard Business Review bisa di lihat di link (http://web.b.ebscohost.com/ehost/command/detail?sid=f227f0b4-7315-44a4-a7f7-a7cd8cbad80b%40sessionmgr114&vid=12&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&jid=HBR) vol. 86 no. 7-8 (Jul. 2008), page 50-57.
Topik: leader; high - commitment; high - performance; organizations; profits

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Managing the tension between performance and people is at the heart of the CEO’s job. Firms are at once economic organizations whose survival and prosperity depends on the delivery of superior value in an unforgiving global marketplace and social institutions that profoundly shape the lives of their employees. Too many leaders view their organizations primarily through one lens or the other. For many CEO s under fierce pressure from capital markets, the focus is entirely on the shareholder, with a single - mindedness that can lead to employee disenchantment and loss of capacity to deliver long - term value. For others, who perhaps have a commanding market share or are operating in protected markets, concern for the firm’s people, culture, and heritage can all too easily slide into complacency, inward focus, and loss of competitive vitality. Some CEOs, however, do manage to resolve the tension between performance and people without sacrificing either. They succeed in harnessing the energy and commitment of their people to implement change that may be wrenching and dramatic but which creates a platform for future success. Consider Tim Solso of diesel engine maker Cummins. One of his first moves when he became CEO in 2000 was to launch a global program to rearticulate Cummins’s mission and reaffirm its values. Six months into his tenure, the company, which was highly leveraged, hit a recession that lasted through the first half of 2003. Demand in its core markets dropped by some 72 %. To ensure the company’s survival, Solso and his team decided that they needed to perform radical surgery : They closed Cummins’s original manufacturing plant in its hometown of Columbus, Indiana, restructured its truck engine business, and laid off a significant portion of its workforce. Accepting layoffs of long - term colleagues is difficult for the employees of any company, Cummins included. But because Solso had created energy around the company’s mission and values, employees were prepared to invest in learning new skills and leading the development of new products and services even as the layoffs took place. He and his team mobilized the remaining workforce to support the company’s strategic shift to focus on the less cyclical areas of distribution and service - making future layoffs less likely. Solso capitalized on Cummins’s long - standing commitment to the environment and its resulting expertise in pollution - control devices to build a distinctive source of competitive advantage. As a result, by the end of 2007 Cummins had more than doubled its sales, and its net earnings and stock price had increased more than fivefold. Total employment had increased by more than a third, and the workforce was strongly committed to the new strategy. Solso is not alone. Over the past year we have conducted extensive research into the strategies and practices of leaders who are building organizations characterized by high levels of commitment from and to their people and by high levels of performance - what we call high - commitment and high - performance (HCHP) firms. To find them, we interviewed people at executive search firms ; reviewed academic papers, business school cases, and the press ; read the public communications of companies ; looked at rankings such as the “Best Companies to Work For” lists ; and interviewed people in our international networks of academics and industry partners. We accepted companies only when several sources confirmed their high levels of commitment from and to their people. We then checked financial data and narrowed the group down to those companies that outperformed their peer group during the CEO’s tenure. In the end, we interviewed the current or former CEO s of 22 organizations in Europe and North America. They are listed in the exhibit “High - Commitment, High - Performance CEO s.” High - Commitment, High - Performance CEO s. This article focuses on two questions that were central to our research: How were these leaders able to successfully reconcile the inevitable tensions between their quest for high performance and their desire to build a sustainable high-commitment institution ? What allowed them to introduce the often drastic changes their companies needed but also win acceptance and commitment from the people most affected ? Resolving the Tension Between People and Performance. The CEO s we spoke with understood that their companies had to meet the intense performance demands of investors. If you are unsuccessful with investors, “then the rest of the constituencies are really not relevant because you’re dying,” one CEO said. “It’s just a question of how fast.” Yet these CEOs were motivated by far more than financial success. Many had spent the better part of their managerial careers within the firms they had come to lead. All, whether promoted internally or hired externally, felt personal responsibility as stewards of their firms’ future. As Leif Johansson of Volvo explained, “For me, the work in the organization has a soul and values and a purpose that transcends only making money. That soul does not end with me ; it will be passed on to the next generation.” Ed Ludwig of Becton, Dickinson captured the more - personal motivators that drive this type of CEO to build great firms. “Being a CEO is like answering a call to bring the organization to a better place than where you found it,” he said. “Maybe it was my conservative Catholic upbringing ... You can never try hard enough. Your mom is always there telling you, you can do better.” Pushing for superior performance was not always easy. In many cases it required these leaders to make extraordinarily bold and unconventional moves. Nokia’s Jorma Ollila placed all his bets on mobile phones, selling off the firm’s other businesses. Whitbread CEO Alan Parker sold the Marriott Hotel chain, a business he had built, in order to focus on two core growth businesses - Premier Inn and Costa Coffee. At Volvo, Johansson sold off one of the jewels in the crown of Swedish industry when he sold the car division to Ford.

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