30th March 2012: Reading List on Leadership

James Macgregor Burns. Leadership. New York: Harper & Row, 1978. TS-4. The classic study on charismatic, transformational and transactional styles of leadership which shaped research agendas over the next two decades. The meme of transformational leadership came from Burns’ study.

Jack Welch & Suzy Welch. Winning. New York: HarperCollins, 2005. TS-3. Winning can be read in several ways. It provides a snapshot of Welch’s coaching advice to potential corporate leaders. It is a ‘medial’ guidebook to the LBM attitudes that some MBA executives adopt (and thus what you are likely to encounter in the corporate jungle in Lean Six Sigma and Workout projects, which are both worth mastering). It is an LBM exercise that diverted attention from Welch’s divorce to his first wife. For a more skeptical view of Jack Welch’s GE tenure see Thomas F. Boyle’s At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit (New York: Alfred A. Knopf, 1998) and the Welch/Tom Peters chapter in Jeff Madrick’s Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (New YorkL: Knopf, 2011).

Robert N. Lussier & Christopher F. Achua. Leadership: Theory, Application, Skill Development (5th ed.). New York: South-Western/Thomson, 2012. TS-3. A best-selling university textbook on leadership frameworks and business applications. For current practices also see Jay A. Conger and Ronald E. Riggio’s anthology The Practice of Leadership: Developing the Next Generation of Leaders (San Francisco: Jossey-Bass, 2007).

Joe R. Katzenbach & Douglas K. Smith. The Wisdom of Teams: Creating the High-Performance Organization. Boston, MA: Harvard Business School Press, 1993. TS-3. In the early 1990s companies such as 3M, Motorola and Apple focused on innovation through teamwork. This is the classic study that influenced the next decade’s research on knowledge management. It occurred just as American managers experimented with business process reengineering and quality circles.

Sydney Finkelstein. Why Smart Executives Fail: And What You Can Learn From Their Mistakes. New York: Portfolio, 2003. TS-1. If you aim to climb the corporate ladder then Finkelstein’s accessible study is TS-1 mandatory reading on the LBM patterns of failure, otherwise this is TS-3. Finkelstein conducted 197 interviews and examined 51 US and international companies on corporate failure. He provides diagnostic tools to recognize failure and suggests early warning signals in the common situations in which corporate failure occurs.

Paul C. Nutt. Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacles. San Francisco: Berrett-Koehler Publishers Inc, 2002. TS-3. A collection of case studies from the Ford Pinto to the Branch Davidians at Waco, Texas in 1993. Nutt identifies 10 different categories of blunders, decision errors and traps across his case study cohort. His solutions include understanding the ‘arena of action’, developing an ethical sense, insisting on learning, and identifying a range of options. For a more recent study incorporating behavioural finance insights, see Gary Klein’s Streetlights and Shadows: Searching for the Keys to Adaptive Decision Making (Cambridge, MA: MIT Press, 2009).

Connie Bruck. The Predators’ Ball (revised edition). (New York: Penguin, 1989). Bruck’s reportage on junk bond maven and philanthropist Michael Milken has three parts. The first part is an LHP Adept manifesto on how Milken and Drexel Burnham Lambert became the dominant United States market-makers for junk or high-yield bonds. It contains many lessons on the active use of university research; the design of investment vehicles; and how to deal with initiatory allies. The second part deals with the 1980s merger wave, the high-profile deals, and Milken’s role as a financier in it. The third part deals with Milken, speculator Ivan Boesky, and Drexel Burnham Lambert’s fall. This cautionary tale of leadership and ethics foreshadowed similar books on the demise of Bear Stearns and Lehman Bros, and controversy about Goldman Sachs, during the 2007-09 global financial crisis. For background on Milken and the 1980s merger wave, see the third and fourth episodes of the Adam Curtis documentary series The Mayfair Set (BBC, 1999).

27th February 2012: Knives Out

The Book of Stratagems

 

Australia’s current Prime Minister Julia Gillard has decisively defeated Kevin Rudd in a caucus leadership challenge 71 to 31 votes. The past week in Australian federal politics has been a fascinating case study in China’s 36 stratagems. Rudd’s initial resignation announcement exemplified ‘stomp the grass to scare the snake.’ His trip from Washington DC to Brisbane seemed like ‘leisurely await for the laboured’. Gillard’s counter-attack was ‘borrow a corpse to resurrect the soul’ (on the Australian Labor Party’s history and election chances) and ‘shut the door to catch the thief’ (gaining the numbers to defeat Rudd). Now, Rudd probably faces only one option: ‘If all else fails, retreat’ . . . to write the tell-all autobiography and do foreign policy consulting . . .

The Damned United: Leadership Lessons

Tom Hooper’s The Damned United (2009) dramatises Brian Clough‘s 44-day stint as Leeds United football coach. You don’t have to be an English football film to appreciate the film which is a cautionary lesson on leadership, set in the downtrodden, rainy Northern English landscape that has become a Screen Yorkshire aesthetic.

Clough (Michael Sheen) makes several classic mistakes which self-saboages his leadership. He accepts the job because of personal animus with his predecessor Don Reavey (Colm Meaney), whose team has used dirty tactics in games with Derby County, a third league team which Clough and assistant coach/talent scout Peter Taylor (Timothy Spall) have taken into the first league. Clough’s aggressive leadership style alienates the Leeds players who still feel loyal to Reavey, and who undermine their new coach. Clough does not have a 100-day transition plan and improvises his training sessions. Nor does he brief the Leeds players on pre-game tactics, whereas Reavey compiled detailed dossiers, in advance, on Leeds’ competitors. Clough’s overconfidence and chutzpah becomes a liability to the Leeds board when he fails to deliver results, and he blows-up. Anyone who has been through an exit interview will empathise with Clough’s sad observation outside the boardroom, ‘every story ends with two words . . . the end.’

Peter Morgan’s script (The Queen, Frost/Nixon, The Last King of Scotland) based on David Peace’s novel (The Red Riding Trilogy) contrasts Clough’s troubles with his earlier success with Derby County. A sub-narrative reveals how Taylor’s expertise was essential to Clough’s success, and how the assistant coach ‘grounded’ Clough’s all-consuming ambitions. The relationship frays when Clough miscalculates during a brinkmanship negotiation with Derby County’s board, which accepts Clough and Taylor’s resignation, despite them getting the club to the top of the English league. On reflection, The Leeds board suggests that their error was in the wrong hiring decision: they should have hired Clough and Taylor, rather than Clough alone. Clough’s blindspot was a lack of political savvy: as a manager he refused to negotiate with Derby County’s owner or to heed his advice, and to listen to the Leeds board.

The film’s epilogue shows Clough and Taylor’s later success with Nottingham Forest, which won the European Cup in 1979 and 1980.The Damned United alludes to a deeper reason why Clough failed at Leeds: the ‘situational fit’ of talent to strategic circumstances that may only become clear in retrospect. Clough was a gifted turnaround coach whose chutzpah was needed to energise and motivate teams. Leeds had hired Clough with a different aim, to sustain and build its high performance team. Clough was correct to see how money would redefine English football, but in this transitional period, managers did not yet have the power to out-negotiate boards and club owners.

No Exit

The live shows are amazing when the band focuses on the music but things fall apart in between.

That’s the narrative arc of No Way, Get F*#ked, F*#k Off! an SBS/Beyond International documentary on the reformation of the Australian rock band The Angels after eight years of legal battles.  The documentary contrasts fan jubilation with the band’s in-group struggles: leadership battles between lead vocalist Doc Neeson and rhythm guitarist John Brewster over setlists and song arrangements; drummer Graham ‘Buzz’ Bidstrup’s disagreements with management over the contracts for merchandise and songwriting royalties; and the weight of the past, notably an archive trip with revelations about The Angels‘ support tours at their prime with David Bowie, Cheap Trick and The Kinks.

No Way, Get F*#ked, F*#k Off! wisely steers away from The Angels’ live performances on a small club tour.  Instead, we see how subgroup coalitions form over the tour, from rehearsals to the final gig.  Neeson and John Brewster’s strong personalities act as two magnetic poles.  Neeson appears frustrated that Brewster and lead guitarist Rick Brewster use pincer-style tactics to get their way on key decisions.  John Brewster feels compelled to defend The Angels’ management which is taking on the financial risk of the tour, and the record company which offers a favourable deal.  Bidstrup is cautious because of past contracts that signed away his
legal rights during The Angels’ 1976-81 vintage period.  He also points that Brewster-Neeson-Brewster received royalties as the core songwriters, so there are incentives and power imbalances in the group that affects the decision-making process.

As the tour unfolds the group dynamics change.  Neeson extracts an early concession to have Neeson-Brewster-Brewster on the tour merchandise.  Bidstrup demands further assurances on the scale and scope of the tour contracts.  John Brewster claims Bidstrup is being “difficult” because of his business management and entrepreneurial experience outside The Angels.  Brewster and Bidstrup misinterpret eachother in meetings as Neeson withdraws.

No Way, Get F*#ked, F*#k Off! ends on an uncertain note: management refuses Bidstrup can attend a pivotal meeting, Brewster defends their decision, and Neeson counters that he is uncomfortable with excluding Bidstrup.   As the credits roll Bidstrup wonders on-camera if he will remain in The Angels or if he joined the tour just to “close the circle” on earlier events.  Bidstrup could leave, as Jason Newstead and Joey Belladonna did respectively from Metallica and Anthrax (after their Among The Living reunion in 2005-07).  Alternatively, The Angels could partly resolve Bidstrup’s concerns with songwriting credits for new songs to all band members, as Queen did on their final studio albums with Freddie Mercury.