Ruthless Strategies for Succeeding in Times of Trouble
It’s been a rough few years, but some companies have managed to thrive. Why? Because their leaders know how to steer their enterprises out of adversity. Best-selling author and turnaround artist Amir Hartman tells you how you can come out on top.
Mon, March 15, 2004
CIO — Virtually no company or industry has been spared during the brutal economic slump of the past few years. With a recovery seemingly at hand, it’s tempting to breathe a sigh of relief and get back to business as usual.
Bad idea.
All companies periodically face obstacles in both good times and bad, says Amir Hartman, who’s a consultant and cofounder of Mainstay Partners, professor at Berkeley’s Haas School of Business and author of the 1999 best-seller Net Ready. His new book is Ruthless Execution: What Business Leaders Do When Their Companies Hit the Wall (Financial Times Prentice Hall, 2004). In it, Hartman says that turnaround starts with managers ("benevolent dictators," he calls them) who ruthlessly execute strategic decisions and have voracious appetites for change. Leaders who are always satisfied with performance become complacent, leading to stalled growth, says Hartman. Equally important is excellence in "operational governance," the formal and informal practices and rules that shape how decisions get made and work gets done within an organization. CIO contributor Lauren Gibbons Paul asked Hartman how the principles in his new book apply to IT organizations.
CIO: Can you expand on your vision of a ruthless leader? What characterizes a benevolent dictator?
Amir Hartman: Focus and accountability. Those are the key themes. These folks are relentless about focusing on initiatives that are going to drive results that matter. They are also very keen on driving accountability—delivering on your word or promises, and dealing with the consequences when one doesn’t.
When I think of accountability, Larry Bossidy, the former chairman of Honeywell and Allied Signal, comes to mind. He’s an operator, a COO-type CEO. He clearly communicates expectations. Given the room to perform, if results aren’t delivered, he looks elsewhere. When the Honeywell-Allied Signal merger was happening [Bossidy had left by then], Honeywell lost its direction. The board asked Bossidy to come back to get stakeholder confidence back up. He found key personnel. He committed to Wall Street that the company would become profitable and drive specific working capital reduction targets. That commitment and communication translated into clear directives to the management team, which in turn drove very specific IT investments to increase productivity and reduce working capital.
What do ruthless leaders do when faced with adversity?
They recalibrate their strategies. Recalibration is a fact-based process by which we assess and determine which strategy we’re going to pursue. Every company goes through that process, but not every company does it in a fact-based manner.
What does that mean for a CIO?
From an IT perspective, strategy-setting is usually not fact-based. Ruthless companies are fact-based. They find out exactly where they’re making their money. The process forces a clear understanding of which customers and businesses are profitable. Most times, IT organizations are in a very reactive mode. They should shift more toward fact-based portfolio management. If top-line growth is the major imperative, they need to figure out how to reduce the dollars spent running the business systems and reallocate some resources toward top-line growth initiatives.
