Leadership


Highlighted below are some of the leadership practices and questions on which I reflected upon at the end of the course.

-self-awareness (centering, TR)

When I started working on self-awareness, I had absolute lack of knowledge about my own inner self and all my actions were driven by utter disregard for other’s emotions and in conflict with my own ideal self. But as I focused and started introspecting more on my thoughts, feelings and actions, I started getting a grip on the practice. Instead of just being satisfied with the practice, I started applying them to various contexts and started realizing my strengths, weaknesses, and negative predispositions, emotions of anger, envy, jealousy pride and arrogance. I could relate my social acquaintances with people sharing similar viewpoints, found reasoning for my disappointments, disillusions and short-term moody behaviors. I realized how empathy towards others emotions, understanding and appreciating other cultures, values and beliefs brings about joy and happiness in others. Professional conduct with honesty, integrity and commitment helped me strengthen my value system and I had occasions when I lost my temper but thanks to the practice, I was quickly able to regain my control and act in an appropriate way.

-listening

Paying undivided attention and respecting others views, soliciting feedback, open communication and being receptive to new ideas and opinions had really changed my relationship with others. People who feared to talk freely now have vibrant conversations with me. I am able to treat others with due respect and this had instilled confidence, morale and brought in high performance from my staff. Having shown keen interest in discussions, I was able to address many hostile behaviors and resolve contentions.

-embodied presence (centering, blending)

As with self-awareness, I was ignorant about embodied presence and I realized the detrimental consequences of my moody behaviors. I was able to neutralize my fixations on judgments and perceptions of others, be present in the moment, analyze contexts and choices and engage in actions that have greater meaning and purpose.

-blending

Blending was a unique exercise which I employed effectively while negotiating with clients. People have their own unique personalities, behave differently, have their own egos and conflicting opinions, but directing them to a common ground where mutual interests are served; most differences in opinion can be worked out. The blending practice was instrumental in our merger talks with a competitor.

-assessment of  progress on personal coaching objective

I see myself as being challenged take on new responsibilities in a diverse cultural environment. I will find effective use of all the knowledge and experience I had gained so far in this course. Now having developed emotional intelligence, I feel comfortable in connecting with others and able to manage people, culture, strategy and value networks. Though not globally challenged, my new leadership role will definitely alter my leadership style, help me probe, sense and act in complex situations, seize opportunities and explore disruptive innovation as means to sustain competition.

With exposure to such immense learning, I have really broadened my scope of learning and fell confident with my leadership competencies – personal and social and ready to take on new challenges of the real world.

-description of the work and/or life context for the next several years

a)-the uncertainty of the context in which you will be operating (using Snowden’s four distinctions; more than one may be applicable);

The consulting market place is constantly changing and highly unpredictable. Any one involved in this business needs to adapt in an agile way and rapidly jump into opportunities that will lead to business growth. I will find tremendous use of Snowden’s Cynefin framework to act in such complex contexts. I’ve been though disorderly and chaotic situations before but had acted with gut feeling and intuition. Having grasped all this knowledge now I feel more empowered to address uncertainty with positive outcomes.

b)-the EI leadership styles you anticipate will be most useful, whether they are your preferred styles or not, and, if not, how do you intend to prepare yourself to use your less favored styles;

I will not be engaging in any preferred leadership style, but based on the situation I’ll apply the appropriate one which will deliver positive results. I’ve applied the commanding style during the recent economic crisis taking some tough decisions, but now having merged, I would prefer a mix of visionary, affiliative, coaching and democratic styles.

c)-the opportunity for you to lead innovation in that context and innovation “probes” you might consider useful;

Being in IT consulting, I find great use of disruptive innovation. With the recent regulatory mandate on financial reporting in XBRL format, our company had developed low cost software products for small to medium business to conform to this new regulation. We probed the markets, understood competition, and realized the potential opportunities before we went ahead with R & D investment in the product.

d)-how you expect to address the development needs of your employees and/or teams (ex., Blanchard, Vision (grounded in strategic assessment and intrinsic motivation), culture (key values and addressing appropriate and inappropriate behaviors, as in our class discussion of Gerstner’s assessments and actions)

As a key executive, I will discourage dysfunctional behaviors persistent in the new organization. This will take time and I’ll have to meet with people, gather feedback and evaluate the organizational culture, the readiness of people to adopt to change etc. before I transform processes, culture and behaviors. In order to motivate people, I’ll have to understand what really inspires and encourages them to do a great job and accordingly will formulate strategies and introduce reward systems. I will have to calibrate my leadership style according to response from people. Emotional skills combined with left brain thinking will be helpful in instilling right motivation.

e)-Your emotional state (transitory, related to a specific event) or mood (a persistent background emotional state not necessarily identifiably related to a specific event) at the time you completed the first self-assessment and when you completed this revised self-assessment; what dispositions to action and constraints on action were created by those emotions or moods; your assessment as to whether those emotions/moods were helpful in your completion of the assessment; if so, why and if not, why not and what could you have done to approach the assignment with a more productive emotional state or mood.

Before I started the course, my emotions were momentary, highly unreliable and had loss of faith and trust from some employees. But with the EI practice and gradual improvement in leadership skills, I have become easily accessible to everyone, others treat me with respect, I regained lost faith and trust and I feel more confident to take on new challenges.

I would suggest role playing in leadership and excerpts of real world application of EI practices will definitely help students complete the learning loop. This will greatly provide them a complete understanding of the leadership competencies and the relevance of emotional intelligence for primal leadership.

Link to my practice log

Our study group has profiled Mr. Dennis Steward, CEO of XYZ Community Hospital in Florida. The hospital embarked on a successful implementation and diffusion of information technology that will provide improved quality, safety and cost effective healthcare in the community.  The goal was to shift from a paper to electronic paperless health care delivery system within an environment where data standardization has not yet been fully accomplished to support a fragmented industry. What Mr. Steward failed to realize was that IT adoption is 5 percent technology-related issues, and 95 percent socio-cultural issues, such as change management, political process, leadership, commitment, risk tolerance and finances.

Mr. Steward took over as CEO in 2001 and has been looking at ways to make healthcare delivery more efficient and effective. True to the company commitment to value care, Mr. Steward launched an IT initiative to streamline data collection procedures and consolidate all disparate systems into an integrated health informatics system. Mr. Steward sought expertise from the CIO and other IT specialists before finalizing the strategy.  When the employees were informed of the new IT initiative, there was initial resistance to the idea from the administrative offices where the IT automation was to happen.  In addition to the individual stakeholder’s resistance; the technical, project management and organizational “people” skills that were inadequately addressed throughout the project implementation will be highlighted in relation to their impact on the “innovators to the laggards”.

As for this IT Implementation, although the system was not an outright failure it did not meet user and organizational expectations; perhaps due to system limitations and lack of customization and interoperability which may of course been due to the budget constraints of this not-for-profit healthcare organization.

If one looks at the necessary system components to ensure a successful health informatics implementation, the traditional focus in healthcare organizations has been first on hardware, then on software and the final and least prioritized component has been the peopleware. First, the staff was never familiarized with the software and there was no initial buy in from them. Lack of familiarity and visibility caused resistance to change.

During the project implementation, a strategic decision made to move beyond technology acquisition to the next level of technology assimilation; unfortunately there was more of a financial incentive driving the assimilation goals in the area of capturing charges, compliance with regulatory governing bodies and revenue enhancement than on the area of provider delivery of quality of care and efficiency by ensuring stakeholder and end user communication, involvement and satisfaction.

Organizational politics among leadership led to some forcible acquisition of a less robust system.

With no perceived unified model or leadership confidence by the departments and subunits, which had in the past been forced to manage their own information challenges due to an unresponsive overworked IT department, they set out from beginning to end of the project to “control” their data and became the greatest obstacles to success.

Leadership was reactive rather than proactive leading to lack of empowerment over the “big picture” that the department heads perceived. The perception of the stakeholders, (department heads, line supervisors and end users), was that the decision was made personally by someone in high level administration (without a medical or an information technology background), and then delegated the “change agent” and project manager role to the CIO, Chief Information Officer, (who also had no medical background). The CIO was given the mandate of pushing the organization toward results as opposed to pulling it toward a shared vision.

The controlled nature of the project supervision and the lack of strong leadership developed into a definite disconnect between this designated change leader and the stakeholders, including the physicians who blamed the CIO for their lack of involvement by not including their medical informatics liaison to the degree desired by the medical staff.

Executives must be willing to move to a shared-leadership model that involves all employees in developing and enabling a common vision. They must be comfortable receiving constructive feedback from employees about what’s working and not working within and commit the time required for teams of employees to work on improving internal communications.

Without Senior Leadership’s willingness to acknowledge the importance of communicating a clear vision to the entire stakeholder and end user group, a shared vision that was not only in line with Corporate view for the individual Healthcare Organization, but also that met the needs of all stakeholders’ within the individual organization and the patients served challenges heightened.

The end users blamed the technology instead of the lack of planning, communication or involvement that was more the cause than the “off-the-shelf” hospital information system and clinical data repository. There was waning of support from the department heads that had been charged with supporting the change leader. There were no “in common” focus groups. Lack of empowerment led to backstabbing, gossip and disregard for organizational values. These were early signs of lack of readiness on the part of the organization for a system that must capture data from multiple sources to be used in critical decision making at the point of care.  No multifunctional team was assembled to work with leadership, the CIO, the IT Department and each other to establish their own and a common hospital wide vision and goal. The organizational structure was rigid and very inflexible.

Staffing reductions coupled with use of outside experts to bring culture change caused distrust and had in some cases caused low self esteem among workers.

Add to the existing lack of trust culture was the lack of time spent on the planning, communicate and involve phase; holding all “conflict issues” until after the go live and false assumptions turned early innovators to laggards due to despair and disappointment. The lack of involvement of the stakeholders, “early adopters” and end users in the decision for implementation of systems and methodology caused delayed in their acceptance of the innovation and diffusion was further delayed. Involve and communicate methodology had not been followed as recommended, lack of training for physicians led to lack of self confidence and faith in the new system. In the end a complete change in leadership was introduced and the CEO fell victim to his own gross incompetence and lack of oversight and control.

Dennis Steward is a perfect example of ineffective leadership.  First he lacked the emotional intelligence to be self-aware and self-regulated. He was not comfortable with ambiguity, never relied on real-assessments, wasn’t open to communicate freely, trusted few individuals and delegated most responsibilities assuming commitment and seamless execution. He was unable to motivate people, establish harmonious relationships, influence positive behaviors and show empathy towards employees. He never made efforts to seek their feedback. Inability to establish create a shared vision, coherence, poor decision making and management strategies led to lack of trust, dissonance and failure. I could only see few streaks of coaching style but that too is fraught with weaknesses and loyalty issues. At times, he behaved arrogantly and was adopted an authoritarian style.

The real key to success is user involvement, involving them every step of the way to gain trust and buy in on the redesign of their work practices and ensuring that their priorities have been met as part of a larger team effort to prioritize patient care and public safety. Equally as important is the adherence to the organizational aspects of change management and to pay close attention to the support and structure given to the empowered “change agent” ensuring that the person designated to this role stays as the perceived champion of the project and does not become the detriment unknowingly through poor decision making and management strategies.

Ensuring a positive working environment that respects people and encourages the high level of team work and collaboration is the result of focus on these important attributes to be included in the process and the project.

The company’s culture is grounded in loyalty, respect and dignity, honesty, integrity and fairness in conducting business.

This paper is intended to be a reflection of my learning experiences so far and there is no question that that the course has left a deep impact on my critical understanding of human capital as a strategic asset to an organization. We had clear expectations from the class and it was all well laid out in the syllabus. As future managers, we learnt how to align HR with business strategies, understand impact of external and internal environments, design HR systems to promote positive behaviors among employees, establish staffing and compensation systems to attract, retain and motivate best employees, understand employee relations, manage change during difficult times and leverage these strategic HR skills that add critical value to corporate decision-making. The recommended textbook was very practical and explained the importance and application of HR practices as they stand in the real world. Instead of dwelling into the theories and concepts with no clue about their intended application, the book explained the reading goals of each chapter, their strategic importance, techniques, best practices, various perspectives, emerging trends and challenges in a global environment. The use of real-world examples along with the case studies really closed the learning loop.  The professor was very knowledgeable, highly motivated and inspiring. He was very receptive and understanding whenever you approach him with any questions or concerns. The learning aspects were unique from a traditional setting in that the students took the collective responsibility to learn by sharing their individual experiences, knowledge, skills under the expert guidance of the Professor. I really felt that this approach left memorable experiences for each of us. The class setting fostered and promoted a collective atmosphere where ideas, thoughts, criticisms, were freely exchanged leading to desired consequences. The Socratic style of teaching helped us to critically reflect on the topics, engage in team coherency and facilitated mutual learning. The organizational practice cases made us understand the prevailing practices in various organizations, HR situations, problems and issues as they emerge.  The case or “Story” presentation made us think critically, explore options and address situations with specific solutions.

But as we went along, every session turned out to be exciting, rich with individual’s experiences and critical thoughts about the topics discussed. What I felt great about the class was the constant feedback and review exercises we had and the expert facilitation by the professor.

A brief synopsis of the topics we learnt includes:

  1. Employee Selection – Strategic importance of selecting right individuals to fit the job and the organization, designing such systems, techniques for assessing job applicants, legal considerations and challenges with recruitment.
  2. Performance Management – Strategic importance, Responsibilities of HR triad for performance management, ways to measure performance and feedback, appraisal formats, rating processes and current issues
  3. Performance based Pay – Strategic importance, design choices, implementation of performance based pay, recognition, rewards, merit pay, types of incentive pay, global variations and challenges
  4. Fair treatment and Legal Compliance – Strategic importance, perceptions of fairness, employment laws, dispute resolution techniques and current issues
  5. HR Planning for alignment and change – planning process, scan and assess environment, various HR objectives and metrics, develop HR plans, implement action plans and address current issues

Every topic that I learnt could be related to my own work place and seem to blend in with my organizational culture.  Human resource management has been changing over the decades and new trends are emerging showing the strategic importance of HR (Human Capital) to drive competitive advantage. The roles and functions of the HR Triad – Line Managers, HR Resource and Employees are critical for any organizational success. The steps to selecting the right employee; performance management and evaluation; relative importance of merit, ability and seniority when promoting employees; job analysis and its value; labor laws under the EEO, Affirmative action, managing diversity, talent management and retention; employee motivation, accountability and loyalty; ethical and moral issues; fairness and equality; discrimination and diversity are of utmost importance to any one who is managing employees.

I even had the opportunity to discuss my work-related issues with the professor to gain his expert advice and seek remedies to the problems I am facing at my work place. I was really happy with the conversation I had and planning on putting into action the valuable suggestions made by the professor. My work-place experiences dealt with most of the issues an individual would face diverse organizations.

Overall, the course was very informative, instilled critical thinking and developed the competencies required to manage people in an effective way. One added benefit was the formulation of strategies to establish workplaces that are efficient, effective and meet the organizational goals. Every Organization must fully utilize the unique and individual characteristics and strengths that individual workers offer.

HR should plan for the future, identify current and future needs, train workforce to face the next biggest challenges. Astute organizational behavior combined with effective HRM should result in greater business effectiveness.

Jim Hagedorn

Chairman and CEO
The Scotts Miracle-Gro Company

Jim Hagedorn, CEO of Scotts Miracle-Gro Co served as president from May 2001 to December 2005 and from November 2006 to October 2008. At Miracle-Gro, Jim had served as executive vice president and was a major architect of Miracle-Gro’s success both in the U.S. and in the UK. Following the merger, he was instrumental in the effective integration of the two businesses and served as head of the Company’s North America business. Additionally, he served in the United States Air Force for seven years, where he was a captain and an accomplished F-16 fighter pilot.

The Scotts Miracle-Gro Company has a long history dating back to 1868 when it first got started as a grass seed company. Now it is the world’s largest marketer of branded consumer lawn and garden products and has a culture that values honesty, integrity and transparency. The company cares deeply about the health and well-being of its 8000 strong associates and their families, and ensures that they lead long, healthy and happy lives. The corporate culture highly values innovation, entrepreneurial spirit, flexibility, collaboration, accountability and moral conduct.

Jim Hagedorn has shown remarkable leadership and passion in his attack on health-care costs.

After seeing health insurance costs continually rising – seemingly out-of-control and realizing the lack of efforts from the government and health-care industry to fix the current system, Jim decided to act. He felt it’s up to employers — who foot the bill — to make changes. He made valiant efforts to not only get its employees to eat and live well but also makes them accountable for their actions. The primary motivation for doing was to control escalating health care costs while improving the long-term quality of life of employees.

Jim Hagedorn is known for his determination and commonsense policies incentivizing his employees. Jim’s decisions are based on the harsh reality that our workforce apparently lacks the basic self-discipline to control its caloric intake and exercise every week.

Scott made significant investment in improving employee health. These include free doctor care, access to a low cost fitness facility, access to dieticians, free generic prescription drugs, and of course, free smoking cessation programs. Scotts Miracle-Gro is a great example of a company that has gotten workplace-wellness programs right. Jim is also credited with some controversial initiatives, like asking for detailed medical histories of employees, and potentially firing an employee who failed to stop smoking.

Scotts is in the vanguard of companies seeking to monitor and change employee behavior. Jim was able to motivate and influence employee behaviors at Scotts and demonstrated true emotional intelligence – He had the right mix of all the EI components – self-awareness, self-regulation, motivation, empathy, social awareness and managing relationships. He was self-aware of the potential health dangers from obesity, smoking and diabetes. He lost his mother to lung cancer and instantly gave up smoking after realizing the grave consequences of smoking. He was able to cut medical costs, persuade employees to take better care of themselves without killing morale and spawning lawsuits.

Jim employed various EI styles as he tried to change employee behaviors. He understood the reasons behind rising health care costs and took the bold step of dictating the personal habits of those lesser than himself. Jim knew the complexity of the issue and he was always probing, sensing and responding to build the dynamic capabilities amongst employees. In relation complexity leadership theory, I see adaptive, administrative and enabling functions on the part of Jim to introduce this disruptive innovation of employee wellness program, a business model innovation to lower healthcare costs.

When Scotts doubled what workers paid for health insurance. Morale plummeted, and Hagedorn knew he had to do a better job selling the hike. He applied affiliative style and held straight talk sessions with employees to heal the rift and explain them what he was up against – the rising health costs climbing at a double-digit rate. He laces his sermons with salty language and unvarnished commentary.

Jim sought legal and HR expertise when he wanted to ban smoking and go after obesity. To achieve these aims, he proposed launching the kind of companywide intervention that families use to help an addicted relative. His wellness programs had Big Brother overtones. But he was adamant about bringing down health costs—even if it means being authoritarian. “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” He acted as a commanding leader to enforce new policies and fire people who did not give up smoking.

His instructed key executives to sell his initiatives and ready the employees for desired outcome. His visionary style coupled with coaching restored integrity, confidence and trust with employees. To motivate people, he incentivized employees for healthy outcomes and emerged as a pace-setting leader.  As a democratic leader, Jim valued inputs and commitment through employee participation at quarterly meetings.

Jim has been highly successful in –

Getting employees involved

Scotts’ wellness program began with CEO Jim Hagedorn’s honest and straight-forward approach with his employees.

Hagedorn wanted employees to know what he was up against. Using a PowerPoint presentation, he showed that his annual health-care bill had soared 42% since 1999, to $20 million, which amounted to 20% of the company’s net profits in 2003.

Getting employees policed

Enforcing workplace programs especially related to such personal matters as smoking and eating is always a tricky issue, but Hagedorn, a former F-16 pilot was not one to be discouraged. Hiring a third-party firm to prevent managers from discriminating against subordinates, he managed to institute a smoking ban with the understanding that “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.”

Getting employees the resources

Well, talk about fitness is cheap, but Hagedorn puts his money where his health is:

During one of Hagedorn’s straight-talk sessions, workers told him a company gym would make wellness easier to swallow. “Done,” Hagedorn said. But his vision went far beyond installing some StairMasters and throwing up health pointers on the Scotts intranet. Hagedorn built a soup-to-nuts medical and fitness center across the street from headquarters. Operated by Whole Health, the 24,000-square-foot facility cost $5 million and can meet pretty much any health-related need an employee might have, including a drive-thru for free prescription drugs.

When employers don’t stop at just making recommendations, but go that extra step to actually provide a convenient, usable service, everyone benefits.

Get employees accountable

Of course, you can provide the world of benefits to employees, but that benefit is only going to be as good as its usage. This is why:

Scotts’ employees are now urged to take exhaustive health-risk assessments. Those who balk pay $40 a month more in premiums. Using data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data. Health coaches identify which employees are at moderate to high risk. All of them are assigned a health coach who draws up an action plan. Those who don’t comply pay $67 a month on top of the $40. “We tried carrots,” says Benefits Chief Pam Kuryla. “Carrots didn’t work.”

It’s time people realize that their habits don’t affect just themselves but others too.

Getting employees motivated (and rewarded!)

Often Hagedorn will walk around motivating people and making sure people are on the right track. He walks around campus joking, slapping guts, and exhorting people to work out. And with rewards aplenty for good behavior general wellness at Scotts is only going one way – up:

The nudging begets peer pressure. Gym rats earn special pins they display on ID badge lanyards; these have become a coveted status object. Competition for trips to Hawaii, free massages and facials, and other cash and prizes is fierce. One group of employees started having lunch together every day to keep each other from peeling out of the parking lot for a smoke. Doughnuts have disappeared. “The message is: If you’re not trying to do something to make yourself better, then you’re going to pay more,”

Getting employees results
The best part of any program is seeing the results right before your eyes and employees of Scotts are luck to be able to do so:

So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years.

The Challenges from Tough Decisions

The wellness initiatives raise some controversial questions – One is that people could start blaming unhealthy colleagues for helping push up premiums. Then there are the privacy and discrimination issues: How far should managers intrude into employees’ lives?  Scotts has so far been able to avoid getting entangled in any legal issues and employees have whole heartedly supported the medical assessments keeping in faith the privacy safeguards.

Some of the initiatives he introduced include:

  • Opening a $5 million fitness and medical center at company’s Marysville headquarters. The clinic employs two full-time doctors, five nurses, a dietician, counselor, and two physical therapists.
  • Mandatory health assessment, have it evaluated by medical professionals and then follow recommendations to improve their health.
  • Enforce higher premiums on employees who choose not to take the survey and those who don’t follow the recommendations
  • Force employees not to smoke — even off the clock.
  • Access to medical center for doctor consultation, personal and prescription drugs.
  • Offer discounts on health-care premiums, free weight-loss and smoking-cessation programs, gratis gym memberships, counseling for emotional problems, and prizes like vacations or points that can be redeemed for gift cards.
  • Use data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data.

The wellness efforts of Jim Hagedorn have paid off, employees fiercely compete for corporate rewards instituted for following healthy habits. So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years. Other large companies have seen a 3-to-1 return on investment in their wellness programs.

The workplace is an ideal place to have a great impact on healthcare costs. First, they become aware of their personal physical problems, learn how to improve those problems and have support during their personal program. Then, the fiscal health of the company is improved when the health of each employee is improved; thus, the company is enabled to continue providing jobs for its employees. Wellness programs are a win-win solution for employees, employers and our country’s economy.

Behaviors(dysfunctional) existent at IBM

Despite having talented workforce, great technology and a sound strategy, IBM was underperforming and was suffering from near collapse before Gerstner took over. Unfortunately, the culture that was prevalent at IBM was that of arrogance. It was not in tune with the times and with customers’ needs.

Gersner was able to quickly diagnose the problems at IBM and sought to find immediate remedies to fix the shortfall in revenues and stabilize the company, make good strategic choices and turnaround IBM.  But there were some behaviors which Gersner found unacceptable. These include:

  • Large dysfunctional bureaucracy, committee decisions, tacit compromise and actions committed to serve group interests. IBM had a dress code that again had outlived its times. Management presided rather than acted. Meaningless meetings, far-flung business units operating independently, with little accountability, divisions competing  against each other both internally and in the field and the entire company was dangerously preoccupied with itself rather than customers.
  • Obsession with perfection, system of several layers of checks and approvals, slowed down decision making and delayed product launches and response times. Employees served themselves better than their customers.
  • The company and its people had lost touch with external realities. It was widely believed that what was happening in the marketplace was essentially irrelevant to the success of the company. “IBM’s dominant position had created a self-contained, self-sustaining world for the company.

IBM was mired in the tradition and culture of its own success, it was unable to respond to the pace and behaviors of the new economy. Customer service absolved itself from paying attention to customers’ needs and business. Employees perceived employment at IBM as “life-long” with ensured benefits. Product portfolio still focused on products which were losing market share and had no bright future in a networked model of technology. New Kill initiatives which provide new direction were killed in works if did not receive consent from other units. Compensation system was focused on fixed rewards, commonality, internal benchmarks and entitlement. This culture insulated IBM and it employees from market realities and the emerging competition from “client-server” technology, emergence of PC’s and high pricing of  IBM products signaled the death spiral for IBM. IBM lost market share and was running into losses. The mainframe segment was falling apart and the company was struggling to survive.

Gerstner completely transformed the culture of the organization through, for example, modeling desired behavior and abolishing IBM’s notorious dress code to reflect better the attire of their customers. He took the bold step of listening to customers and cutting the price of their cash cow, the 360, to raise cash. Performance based pay and differentiation was introduced. Compensation was not tied to business unit performance, rather was based on company performance. He made strategic decisions towards service-oriented, network-led business transformation. Customer focus was given top priority followed by company interests. Most of the efforts paid off and IBM turned profitable after few quarters.

Behaviors(postitive) at IBM

IBM had a great culture of respect, hard work, and ethical behavior. It was known as a leader in diversity. Employees take pride in commitment – committed to their company and committed to what their company does. These values were engrained and institutionalized by the early founders at IBM.

  • Excellence in everything IBM does
  • Superior customer servicer
  • Respect for the individual

These beliefs were reflected in compensation and benefits systems, in training programs, in marketing and customer support. The three behaviors which Gersner found acceptable were:

  • Ability to provide integrated solutions for customers, handle internal complexity – a great talent pool, experience, knowledge, maturity, and character.
  • Employees who never give up on their company, their colleagues, and themselves – Are energized, motivated and stimulated, who demonstrate commitment towards company goals.
  • IBM’s existence as a whole was the only competitive advantage IBM had and Gersner believed that the breakup was not needed.

Vision and strategy

Mr. Gersner was a visionary who could see the future and predict opportunities. He exposing that “vision is not the same as “strategy. Fixing IBM was all about execution. As Mr. Gerstner stated, “We had to stop looking for people to blame, stop tweaking the internal structure and systems. I wanted no excuses. I wanted no long-term projects that people could wait for that would somehow produce a magic turnaround. I wanted – IBM needed – an enormous sense of urgency”. He did not form any long-term strategic plan, but took strategic initiatives and implemented them for the short-term. He believed that a long-term vision for the company will emerge from the essential restructuring work and needed to cope with the sheer stuff of the rescue plan before he can get to grips with my new vision. He understood the emerging technology trends and wanted to position IBM to take advantage of it. He emphasized the relevance of networked model, the retention of network storage and leverage “service” as the next big market segment to offer complete hardware and software solutions. As part of this effort, IBM global services was started in 1996, Lotus, Tivoli and Rational were acquired and technology was licensed to third parties.

After taking stock of the situation, consulting the customers, competitors and business divisions, Mr. Gerstner formulated strategy and pushed it gain employee readiness. IBM moved from a product based, rule based company with deep divisions into a nimble service company with competitive advantages where decisions are made quickly by empowered and capable employees acting with a customer centric bent of mind.

His transformation efforts included

  • Pushing a service oriented company that could provide a total solution to any customer’s problem
  • Look outside to measure success via customer satisfaction and increased shareholder value
  • Operate as an entrepreneurial organization with minimum of bureaucracy and never ending focus on productivity
  • Never lose sight of strategic vision, direction & mission, reward teamwork
  • removing power and status as key elements of the rewards system created a more market and profit focused company
  • right size – layoff 100k employees and shut down unprofitable departments
  • Customer segmentation and customer centric sales force
  • Service marketing – innovate software, segment service and provide integrated solutions

Culture-shaping strategy

The greatest barrier to change in any large corporation is the culture. Any major shift in strategy or structure requires culture shift to create alignment.  Mr. Gerstner’s strategy involved the following phases:

  1. Diagnose & define (define current and future state) – met customers, competitors, senior executives, financial analysts, and consultants to get a grip on outstanding issues. Accepted feedback, paid attention to divergent ideas and opinions
  2. Unfreeze & educate (shift behaviors)  – Influencing skills, was results oriented, interested in short-term results without considering long-term, overall results and outcomes, had limited perspective, in time and scope, encouraged ideas off the beaten track and embraced new ideas and innovation, accepted criticism of the organization,
  3. Reinforce (treasure long term change) – convinced people of the strategy and brought their buy-in for implementation
  4. Apply to Strategies (address business issue) – Mr. Gerstner regrouped IBM by providing one single leadership at the top. Reversed the core IBM mainframe business by cutting prices and becoming customer focused. Synergized the IBM messaging division by providing single message globally. Intelligently put his bet on Services, Software and e-Business. Realigned the employee incentive system to encourage the culture that promotes customer oriented actions.
  5. Measure progress (monitor progress) – Compensation system base on Differentiation, Variable rewards, External benchmarks and Performance. Tied employee compensation to the performance of the whole company rather than to the employee’s particular division

The cultural change required at IBM (and at just about every large organization that I can think of) – Product based to customer based, do it my way to do it the customer’s way, from ‘manage to morale’ to ‘manage to success’, from decisions based on anecdotes to decisions based on data, from relationship driven to performance driven (and measured), from conformity to diversity, from looking good to accountability, from US to global, from rule driven to principle driven, from silo to holistic, from analysis paralysis to make decisions and move forward with urgency (80%/20%), from not invented here to learning organization, from fund everything to prioritize. IBM was facing the PC dilemma, the emerging e-Business, shedding OS/2 due to stiff competition, new focus on middleware technology, new software acquisitions, networked model, and services as key to integration etc. These external factors played a huge role in shaping IBM strategy and it’s eventual transformation from a product-centric to service-centric organization.

Most of the changes introduced by Gerstner were successful.  With proper strategy and efficient leadership, he brought about significant changes in organization culture and business direction and was able to restore IBM to stability.

Personal Leadership

Mr. Gersner was an embodiment of most competencies characteristic of an effective leader – drive, motivation, integrity, self-confidence, intelligence, business knowledge and emotional intelligence. Other noticeable key competencies include tenacity, openness, assertiveness and trustworthiness.  He has an excellent past as a transformational leader at American Express and RJR Nabisco – one who can bring about significant change in organizations by inspiring, motivating and leading people in new direction. He is noted for his significant accomplishments as a change agent and when offered the job at IBM by Mr. Jim Burke, he was little hesitant to take the job.  His was in a dilemma whether to accept the offer or not.  He was emotionally strong and knew his capabilities of self-awareness, self-management, social-awareness and relationship management. The factors which led to his job acceptance offer were:

  1. KKR was planning on an exit strategy and Gersner knew that chances of RJR’s return to profitability were slim. So Gerstner was looking for an exit and the IBM job proved to be an attractive alternative.
  2. b. Being optimistic, achievement and initiative oriented, and adaptable, Gersner decided to take up the challenging offer.
  3. c. He had a feel for the problems at IBM after meeting Paul Rizzo, an executive at IBM.
  4. d. He had the backing of his family in this endeavor

Factors which worked against taking the job offer include:

  1. Apprehensive how a non-technocrat can turnaround a technology company. He had no prior knowledge of working in technology industry.
  2. His initial analysis showed the severity of problems at IBM and doubted the success of recovery efforts.
  3. Unlike a consumer products company, technology products can be extremely successful or disappear within a short period of time.

By reflecting back on his past achievements, Gersner decided to take the job. He looked at IBM not as an enterprise but as a “national treasure” that was well worth the colossal efforts needed to restore it. Gersner always saw his values in action in personal work behaviors, decision making, contribution, and interpersonal interaction.

After so many years at IBM, Gersner learned three fundamental aspects of leadership that define a successful enterprise and executive.

  • Focus – meet the challenges during tough times and undergo transformation
  • Execute – getting things done, not crafting strategy but implementing it.
  • Lead – create high performance culture, set goals, measure results and ensure accountability

Gersner was quite frank and open about issues and his opinions which helped revive IBM. Through a strategy of listening to customers’ needs, partnering with customers, competitors and other industry leaders, right sizing, eliminating compensation and recognition systems, Gersner was able to bring IBM back into profitability.

Execution of strategy must be built on three attributes – world class processes, strategic clarity and a high performance culture. Leadership is all about making things happen. Achieving success requires energy, organizational leadership, marketplace leadership and personal qualities. Organize resources around customers, not products, or geographies. Measure the future, not the past and walk the talk.

Organizational leadership

Mr. Gresner’s leadership style is marked by strong emotional intelligence and ability to lead people with passion and commitment.  We can see six different styles of leadership in Mr. Gersner- authoritative style, the affiliative, democratic, coaching, pacesetting and coercive styles, all demonstrated in varying strengths.

Mr. Grestner was able to resonate with employee emotions and have a shared desire to be a part of something effective and meaningful. This emotional resonance was established through leadership styles based on emotional intelligent acts. By establishing this connection and creating resonant teams and culture, Gersner was able to improvise and sustain it till his retirement. As an authentic leader he was able to influence work outcomes and organizational performance.

He was a man with convictions and followed his instincts. He was not carried away by what his critics said. He was more into fire fighting, a “fixit” personality who felt the urgent need to rescue IBM. His focus was on short-term strategies and did not set long-term strategic goals since he believed irreversible actions will bring radical shifts which may disrupt his turnaround efforts at IBM.

He was an avid observer and excellent problem solver. He could identify the emerging technological trends to shape new strategies. He understood the importance of customer and devised strategies to address their immediate needs and concerns.

Mr. Gersner followed a systematic approach to address business issues. In order to diagnose problems, he met customers, competitors, senior executives, financial analysts, and consultants to get a grip on outstanding issues. After learning about IBM’s strengths and weaknesses, he launched his turnaround plan.  Instead of focusing on grand vision, he motivated employees through business success which translated into job security and higher pay. He understood the immediate need to have open lines of communication with his employees and having candid feedback. As part of the grand vision, individuals executed tasks which made them an integral part of the transformation effort.

By being democratic, he sought alternatives and convinced others of the need to discontinue support for unattractive products. Gerstner gives credit to many people that were instrumental in the turnaround. He was coercive when he disbanded the management committee and relayed this news across the organization. His affiliative style of leadership resulted in building strong relationships amongst teams. This is reflected in his new set of management principles that reinforce teamwork and harmony.  He made employees equity holders of company to align them with company goals.

As a pace-setter, he showed strong faith and confidence in employee abilities and set high performance standards. An authoritative style emerged when Mr. Gersner resorted to right sizing which may have created some negative impact (emotional dissonance) from the affected employees who were laid off.

Mr. Gersner could spot emerging talent and personally mentored them to lead new divisions within IBM. This was reflective of his coaching style of leadership. He shunned conservative approach and instead took huge risk in transforming IBM from a product-focused organization to a service-oriented, networking-led model organization.  Mr. Gersner played his style by gauging the readiness of his employees to foster change. He leveraged employee abilities and willingness to accomplish specific tasks.

As an effective leader, Mr. Gersner seamlessly shifted from one style to the other to garner best results possible. His repertory of leadership styles is extensive and he used them as the situation warranted to deliver positive outcomes.

Since Mr. Gersner was in a fire fighting mode, he had to apply the right mix of various leadership styles according to the context. I would be acting in the same way that Gersner did to get IBM out of distress.

Though I agree with most of the actions taken to restore IBM back to profitability, I would like to wean away from some harsh decisions and mend my leadership style to some extent.  I would try not to be intensely competitive, blunt, focused and tough. I will try to be more personable, willing to learn and share business knowledge and have empathy towards others. I may introduce IBM as a way of life that is based on values rather than just on being first. Any cost cutting measure involving layoffs will need to be used as a last resort only after exhausting all alternatives. In conformity with Gersner, I would admit failures and try, fail, learn and move on, than never to try at all.

I am really amazed and shocked to know how poor of a leader I am when I started learning about the cognitive and emotional aspects of effective and inspirational leadership. I am in a leadership coaching class taught by Prof.Tom Roy and Mr.Scott Blessing from Inspired Leadesrhip Now, an executive coaching firm. I was ignorant of the emotional aspects of an individual’s personality and relied more on the cognitive abilities of what a person can accomplish. But now I understand why I’m a falling behind in my professional career. Though I am acquiring knowledge and becoming proficient and gaining competencies in numerous business areas, I still haven’t acted upon this knowledge. The learning I have made has had no impact on my personal or professional life. After having learnt about the facets of emotional intelligence, I have realized that there is a need to do a thorough introspection of myself before I can lead others.  All the knowledge I acquired through my five years at GWU, having an MSPM degree, a PMP certification and the current pursuit of a MBA, has not brought about a change in my actions, behavior or performance.

The reason being my inability to embody that learned knowledge. I was able to confirm this gap when I read about embodied learning from Strozzi Institute, a school dedicated to empowering leaders who embody pragmatic wisdom, skillful action and grounded compassion. I sometimes feel that the instant semester based learning, missioned to churn out business coursework does not instill any long-lasting memory of the learning done. It does provide an individual a firm footing to understand the intricacies of setting up, running and effectively managing a business. But to be an exemplary leader, be able to navigate the company through uncertain and difficult times requires an embodied presence of body, mind and spirit. It is the rigorous training and practice to understand the inner self (self-awareness, emotions and moods) and embodying such skills that will lead to purposeful actions and motivates people to achieve greater results. I strongly believe that an emotionally intelligent leader clearly has a distinct style which sets him apart from others. Going forward, I would like to embody any critical knowledge that I will gain through rigorous practice and transform them for the greater benefit of achieving excellent results. I plan to regularly follow weekly practice of self-awareness, self-control and embodiment to discover my inner self and leverage them in a positive way. I hope this approach will contribute to my self-transformation into a more effective individual and help me realize my professional objectives.