The Real-Life MBA: The no-nonsense guide to winning the game, building a team and growing your career. Suzy Welch
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the communities where they operate.
And in working, people give their lives meaning. Not all of its meaning, of course. Life, with its vast depth and richness, certainly exists outside work. But work can give our lives a goodly portion of its purpose.
Whi ch is why it’s such a terrible thing when companies or teams are stuck in work situations that are buzzing with sound, action, and (occasionally) fury, signifying nothing. Nothing, as in no forward motion, no growth, no winning. Not even a decent shot at it.
That’s not competing. That’s not fun. That’s not business.
That’s just a grind.
Such a dynamic is, however, all too common. As we mentioned in the introduction, we’ve spoken to about a million people around the world since 2001, almost exclusively in Q&A sessions. These individuals have worked at companies large and small, old and new, in heavy industry and in gaming, retail, and finance. They’ve been entrepreneurs, senior executives, MBA students, and individual contributors. Across all these varied sessions, several people in the audience usually ask something like, “Why is it so darn hard to get everyone on the same page?” or describe a work scenario where so many people don’t seem to be playing on the same team, with results beginning to show for it. More evidence, too: probably a third of the nearly 1,000 MBA students in our business school, most of whom are in their thirties and forties and working in managerial jobs at good companies, report experiencing some sense of gridlock at work.
What a mess. And yet, this dilemma is not only fixable, it can be prevented.
All it takes is alignment and leadership.
They’re equally important; indeed, we’d assert that neither can really happen without the other.
And there’s no better way to start The Real-Life MBA than by digging into both.
All Alignment, All the Time
Now, we understand that the importance of alignment is not going to be news to most people reading this book. The concept has been out there in the management stratosphere for a long time, lauded by gurus, professors, pundits, and consultants alike.
The problem is that, in reality, at companies of every ilk, the relentless application (and discipline) of alignment can fall by the wayside.
Work—that infernal to-do list—gets in the way.
We get that. Work feels like it should come first, especially in today’s daunting economic environment. A cranky client, an employee who needs coaching, a competitor’s new technology hitting you blindside, a PR disaster erupting on Twitter. All these can happen in a day’s work, and sometimes even on the same day.
But the fact is, if you want to get off the grind, alignment has to come before, during, and after “the work.” It has to be happening all the time. It has to be part of what “the work” is.
All of which begs the question, the alignment of what exactly?
The answer is mission, behaviors, and consequences.
Mission pinpoints an organization’s destination—where you’re going and why, and equally important if a mission is to succeed, what achieving it will mean for the lives of each and every employee.
Behaviors describe, well, behaviors—the ways in which employees need to think, feel, communicate, and act in order to make the mission more than a jargon-laden plaque on the wall gathering dust and spawning cynicism.
Consequences put some teeth into the system. We’re talking promotions and bonuses (or not) based on how much employees embrace and advance the mission and how well they demonstrate the behaviors.
Maybe these elements sounds obvious to you; as we said, this is not a new topic. Or maybe just the opposite. As we also said, true alignment’s a rarity.
Either way, we can assure you of one thing: When alignment happens, there’s no more running in circles. There’s progress; that’s what happens when grind gets out of the game.
Alignment in Action
Without doubt, stories about alignment’s transformative power can be found in every industry, but none offers quite the treasure trove of examples as private equity. Think about it. Any business of interest to a private equity (PE) firm is almost by definition undervalued. It’s suffering from bad leadership or caught up in a changing market; it’s a family business without a succession plan, or a corporate division that’s simply been neglected, orphaned by its successful parent company. In each case, the organization is sputtering.
Now, it does happen that PE firms do get lucky, find a hidden jewel, polish it up, and get out fast with a big gain, or they buy an existing winner from another PE company, which has to sell it to satisfy the financial expectation of its investors. But those cases are in the minority. In the majority of cases, PE firms acquire the struggling business and set about doing the hard work of finding good leaders, and, almost invariably, their first and most important job is getting alignment straightened out.
Take the case of the Dutch conglomerate VNU.
Back in 2006, VNU was closing out a decade of decent, although hardly spectacular, results. In his annual letter, CEO Rob van der Bergh said he was pleased with the company and described VNU, which owned properties such as Hollywood Reporter and the Nielsen ratings company, as “healthy.” Private equity, however, saw untapped opportunity, and a consortium of six firms swooped in and bought it up for $12 billion, hiring veteran business leader Dave Calhoun as CEO.
With a stellar career that had landed him as vice chairman of GE at age 45, Dave had managed many large businesses, but nothing like the morass of brands and products he suddenly found himself running. “When I got there, the mission was, ‘We’re the leader in market intelligence,’ ” Dave recalls. “That sounded good, but what it meant in practice was, do your own thing in your fiefdom. There was no sense of overall meaning.”
Dave and his team immediately set out to change that. They dropped the name VNU, reclaimed the name Nielsen for the entire company, and made it clear that Nielsen—the new Nielsen—existed for one coherent purpose: to measure what consumers watched and bought. Nielsen was going to be the best company in the world at knowing everything about consumer viewing and buying habits all over the world.
Exciting, right?
The best missions are like that: aspirational, inspirational, and practical.
Aspirational as in, “Wow, sounds amazing—I love the idea of trying to get there.”
Inspirational as in, “Great—I know we can do that if we stretch and try.”
Practical as in, “OK, sounds reasonable—I’m going to work with my team to get it done.”
And here’s the kicker. Remember how we said well-wrought missions let each and every employee know what’s in it for them? Nielsen’s nails that challenge. It promises growth—product growth, services growth, global growth—and all the career opportunities that come with it.
Another quick but illuminating mission-making example from PE is Nalco, the diversified industrial company that was bought out in 2007. In 2008, its new owners hired CEO Erik Fyrwald, who inherited 12,000 employees, $4 billion in revenues, strong cash flow, negligible growth, and a mission that could have been paraphrased as, “We’re in the water business, that’s nice.”
Erik spent his first 90 days traveling to Nalco business units and its customers, seeking the company’s killer app, if you will, a way in which to spark change and build a competitive advantage.
To his surprise and delight, he found it in a product that Nalco had developed six years previously, a water usage quality optimization system called 3D TRASAR. About 4,000 units were already being commercially leased, and Erik soon discovered that their customers loved them, passionately describing to him how the Nalco product saved water and helped prevent EPA fines like no other product.
Erik brought