Business Blog: Hoover’s Business Insight Zone

Here are some early-morning thoughts [philosophy alert!] trying to tie together two themes that have been on my mind a lot lately:

• The role of CEOs, especially in terms of addressing their companies’ competitive challenges and in planning for their companies’ leadership successions.
• The way each of us responds to the competing long-term and short-short term pressures of our jobs. (Self-management, in other words.)

Most of the businesspeople I know, even the high-achieving ones, will admit to spending far too much time “putting out fires” when they would rather be building “fireproof” structures for the long haul. Depending on the particular role being filled, the structure could be a business process, a product line, a brand identity, a leadership bench, an operational team, a sales floor, a book, a financial cushion, or any of a thousand other things. You know what I’m talking about: the big achievements or processes or “insurance policies,” that, if we had them in place, would make our daily working lives so very much easier.

But it seems to be the nature of things for fires to spring up, and that’s true whether you’re on the bottom level of the organization chart or the top. When you’re nearer the bottom, the fires will be related to your specific operational duties, the day-to-day minutiae; as you rise through the levels, the fires will be related more and more to short-term P&L statements, so that if you ascend to the CEO suite, you’re pressed to deliver on the quarterly expectations of investors, regardless of how those quarterly expectations help or hamper your company’s long-term success.

If you do it right, you’ll start to have success in business by becoming a good firefighter. Fires spring up, big or small, and you know what to do with them. If you’re really good, you’ll then evolve into a fire safety engineer: you still know how to fight fires, but now you spend more of your time ensuring that your bailiwick is free from fire hazards altogether.*

When you manage others, these same processes extend to those people: first you develop their abilities so that they can be good firefighters (or else you get rid of those who can’t and find others who can). Then you develop their ability to be fire safety engineers, building structures that aren’t prone to crisis. The higher up the ladder you go, the more important it is that you execute these functions both as they apply to your own work and as they apply to those under you.

This meshes with my basic view of what is required of all managers — just two things:

1. Developing your people to get the most out of them.
2. Aligning work to balance short-term and long-term objectives.

There are other wrinkles, but those things, I believe, are the great keys to success. Just those two will keep any manager, from a shift leader at Wendy’s to the CEO of GE, plenty busy.

Our recent discussions of CEO succession highlight the failures of many CEOs to carry out Function #1. Whether because of egos, distractions, cultural problems, or what-have-you, we can say with certainty that Stan O’Neal at Merrill Lynch and Chuck Prince at Citigroup botched that part of their jobs. (They’re hardly alone: this applies just as well to Carly Fiorina at Hewlett-Packard and a number of others we could name.) Both of them also seem to have failed to fulfill Function #2, though I’m willing to wait a bit to see whether they weren’t judged more harshly for short-term reasons than their long-term performance would justify.**

If it’s true that two men as smart and capable as O’Neal and Prince botched these basic functions of their jobs, it may simply be a good example of the Peter Principle in action. Many of us botch the process of developing our people (or ourselves) through the stages of expertise in firefighting and fire safety. Many of us also botch the process of aligning work to balance long-term objectives. We, too, spend our time putting out fires, more or less effectively, when we could be [flowery language alert!] building a magnificient fireproof structure to stand the test of time.

The major difference: most of us haven’t taken on the responsibility (with the concomitant paycheck) of running gigantic outfits with thousands of people’s jobs at stake.

Here endeth the philosophizing — for now.

~

* My fellow self-management mavens may recognize Steven Covey’s four-quadrant thinking here. Firefighting resides on the “urgent” side of the chart, either in Quadrant I (urgent and important) or Quadrant III (urgent but unimportant); fireproofing resides in Quadrant II (important but not urgent), which is where Covey advises us to spend the bulk of our time.

** Okay, I’ll come clean and say that I’m pretty sure that both O’Neal and Prince failed to build up their companies appropriately for the long term. But the historian in me acknowledges the possibility that things may look different when we have five or ten more years of perspective. Heck, there are people today (e.g. Tom Peters) who think that Fiorina’s grand design of merging Compaq into Hewlett-Packard is the thing most responsible for H-P’s current possession of the catbird seat in computing.