Say what you will about Jack Welch, but he ALWAYS has a lot to say about HR.
To that end, Welch gave some of his great management and business insights to SHRM attendees in a question-and-answer session with Claire Shipman of ABC News. He was provocative, funny, a bit earthy and generally entertaining. And as someone who has heard him talk on numerous occasions, I can tell you that Welch didn’t just lean on what he has said so many times before.
One of his key points: Trust is an essential quality for all human resources professionals, and that means both trust going down to employees (they need to trust that you’re helping them) and coming down from your boss (who needs to also trust in what you are doing to manage the workforce). Welch believes that the best HR people exhibit pastor-parent behavior: They keep confidences (like a pastor) but can also tell it straight (like Mom or Dad always could).
One interesting moment came when Welch asked the audience members to raise their hands if the HR leader in their organization had equal status to the company’s CFO. Only a few of hands went up, and Welch said that this is proof that HR still must do more to get the respect of their organization—and that more organizations need to push for HR-CFO equality.
Welch also said that holding on to top talent is going to be a bigger challenge because “what you hear is, ‘I want to get the hell out of corporate America.’ ” More workers, he said, are opting to become entrepreneurs in the wake of the huge number of layoffs and corporate downsizing. “HR needs to challenge the organization to be more exciting and more accessible,” Welch added, “because people just don’t trust corporate America.”
Overall, Jack Welch delivered an upbeat HR pep talk here in New Orleans, and his presentation was the most focused and HR-specific opening speech of any I have heard in the past half-dozen SHRM conferences. I didn’t agree with everything he said—for example, I don’t buy his argument that women must make a decision between having children and getting a high-level executive position—but then again, I never agree with everything anyone ever says.
One last thing: There was also probably more written about this SHRM speech than any other in the history of the organization. I had a hard time keeping up with the tsunami of HR “tweets” and blog posts flowing live from the ballroom at the Morial Convention Center, where Welch was speaking.
To paraphrase Winston Churchill: Never have so many written so much, so quickly, about so (relatively) little. As much as I like Jack Welch, the social-media flood to get out his speech was overkill, and probably a sign of the times. I don’t think we’ll be able to shake it anytime soon. Get my latest blog updates and workforce management news by following me on Twitter.
How bad was Custer’s management decision-making that day?
Let us count the ways:
1. He wouldn’t listen to others: Custer was told to hold off on any attack and wait for reinforcements that were being led by Brig. Gen. Alfred Terry, but impatience got the better of him and pushed Custer to act. Terry and his reinforcements arrived one day after the battle, on June 27.
2. He didn’t have proper respect for his competition: Custer was guilty of hubris, just like so many modern executives. He grossly underestimated the number of Indian warriors facing him, downplayed their talents and failed to understand the technological advantage the competition had. While Custer’s troops were generally armed with single-shot Springfield rifles, the Indians mostly had repeating rifles. A little less ego might have helped Custer to better respect what he was up against.
3. He focused on the wrong issue: Custer’s focus wasn’t on fighting and defeating the Indians who were itching to fight him at the Little Bighorn. His misguided concern was that he needed to trap them and prevent their escape. That’s why he split his forces into three parts, diluting his overall strength. The other two units of the 7th Cavalry, led by Capt. Frederick Benteen and Maj. Marcus Reno, survived a fierce two-day fight that ended when Terry’s reinforcements arrived.
4. He was badly outmanaged: Custer was overmatched by Indian leader Sitting Bull, who lured him into a fight on his schedule, in a place of his choosing, with a much superior force. And Sitting Bull had an able field lieutenant in Crazy Horse, who executed his leader’s plans to perfection.
5. He had incredibly bad luck: Benjamin Franklin said that luck is when preparation and opportunity meet, and that is certainly true for Sitting Bull at the Little Bighorn. The flip side is that Custer had the misfortune of deciding to engage the largest single concentration of Native American warriors ever assembled on the North American continent with an undersized and outgunned force that he stupidly split into three parts.
That’s not just bad decision-making, but also terribly bad luck.
With a couple of better management decisions and a couple of changed elements, perhaps Custer would have survived the Battle of the Little Bighorn. History would be very different had that happened.
That’s what we should keep in mind today, on Bad Management Day. Sometimes, in business and in life, there are only a couple of decisions separating glorious success and unmitigated disaster.
Here’s something that doesn’t take a lot of intuition to figure out: Organizational culture is the DNA of a business. In the most successful companies it is not only tangible and specific, but it also defines the essence of the organization and provides the glue that holds the workforce together.
The success of Home Depot was based not only on having a large and competitively priced store where you could find just about anything needed to renovate, fix or remodel a home, but also in the army of orange-aproned experts that were always available to help with any problem or situation you might have.
It was this personal, customer-first service that was, at least in my mind, the key to Home Depot’s remarkable business success. And, it was one of things that former CEO Bob Nardelli seemed to have little use or respect for.
“I would say for a period of about four to five years, we lost our way through the last CEO,” Marcus told the Journal-Constitution. “[Marcus] was referring,” the newspaper pointed out, “to the December 2000-January 2007 reign of Bob Nardelli as chief executive. Recruited from General Electric, he was the first CEO brought in from outside.”
It’s not atypical for any new manager to want to make their mark, and this is especially true for a new chief executive brought in from the outside. But all too often, making their mark means a wholesale dismantling of the company culture long before they really understand or appreciate it. This “marking your turf” style of management is similar to what a dog does as they wander through a new neighborhood—and just about as useful.
“Nardelli, hired to give Home Depot discipline and structure, was criticized for changing a culture that had been working,” the newspaper story noted, and Bernie Marcus reiterated this, saying, “I think Nardelli came in because Arthur and I felt we had grown the business and the systems were very antiquated. We were very entrepreneurial and we needed some discipline. Nardelli provided that. But unfortunately, he had his own culture he tried to infuse into Home Depot, and that culture didn’t work.”
I don’t want to keep beating on Nardelli, but he’s a great case study in how a talented executive can do all the right things financially yet completely foul up an organization by failing to understand or respect the underlying culture that drives it.
And to be fair, Nardelli is just one of many talented and highly paid executives who parachute into a business to save it but fail to understand that you need the support of those on the ground to really drive meaningful, positive change. I can point to any number of other executives—and names like Tribune’s Sam Zell and former Circuit City CEO Philip Schoonover leap to mind—who are guilty of the same shortsighted judgment.
The culture of an organization is highly critical no matter what the business or endeavor. Smart executives get this, but being highly paid doesn’t mean you are smart or sensible. It just means that you managed to find some shallow-minded board of directors somewhere to throw you a lot of money before they really have a good handle on what you can actually do.
“Frank is not wedded to everything in the past,” said Home Depot co-founder Arthur Blake, “but he understands the value of culture and those fundamentals.”
Amen to that, I say. And maybe, just maybe, it gives Home Depot—and its remarkable culture—a fighting chance of survival.
If you’re a leader, you know it’s a little bit like marriage: You’re a leader in good times and bad, in sickness and in health, for better or for worse.
In other words, real leaders know they can’t just choose to be leaders when things are happy and times are good. If you accept the leadership mantle, you also buy into being the leader when things go bad and times are terrible—when those you are leading probably need your leadership the most.
And, that’s why you have to wonder about the would-be leadership of NBA superstar LeBron James.
Unless you are brain dead and living under a rock, you know LeBron. He’s 24, a mega-millionaire, and one of the best basketball players in the world. He helped lead the United States to a gold medal in men’s basketball last summer at the Beijing Olympics, and this year, he led his Cleveland Cavaliers to the best regular-season record in the NBA. Plus, he’s a one-man marketing machine with multiple national campaigns built around him—a person people like and aspire to be like.
Yes, LeBron has been a great leader and role model during this past year when things were going so well, but last weekend, he hit a bump in the leadership road. His Cleveland team was eliminated from the NBA playoffs by the Orlando Magic, and although James made a superhuman effort to will his team to victory and a place in the NBA Finals, it was not to be. Cleveland would not win an NBA championship this year.
That’s where the LeBron James leadership story takes a wrong turn.
Saturday night, after James and his Cleveland Cavaliers lost to Orlando, James did something very much unlike him, and very much unlike someone who has taken on the role of team leader: He walked away, silently, refusing to talk to the media or engage in the customary handshake with the other team. He then showered and quickly left the locker room, refusing to say anything to anyone.
Diane Pucin in the Los Angeles Times put it plainly: “Hey, LeBron. You want to be a star and have puppets cavorting in your honor on television commercials? You let talk ebb and flow about how you need the bigger stage that New York might provide in another year when you are a free agent and everyone will beg for your otherworldly basketball talent and indisputable will to win? Then show up when it hurts too, when the world isn’t being operated like a, well, puppet on a string in your favor.”
LeBron James is no mere athlete; he is someone who has opted to take on a major leadership role in a major business with all that entails. To opt out and walk away from it because things go badly is the worst possible thing a leader can do, because it is in tough times and difficult circumstances when true leadership truly reveals itself.
Real leaders are leaders 24/7, in good times and in bad, when things go your way and, especially, when they don’t. Real leaders stand up and know that only when they learn to lead with dignity through the bad can they also stand up and bask in the glory of when things go good.
In other words, real leaders don’t take a night off, or skulk away because they just suffered a crushing defeat—especially if their name is LeBron James.
The overpayments weren’t that big—they ranged from hundreds of dollars up to $5,000 per employee—but the notion of requiring laid-off workers to pay back a relatively small amount of money due to a company foul-up seemed pretty callous. Microsoft senior vice president of human resources Lisa Brummel ended up having to do damage control on this one and eventually fell on her sword and said the company erred in asking for the money back.
She said that senior management has “asked leaders across the company to minimize the amount of e-mail sent today, as employees told us the e-mail volume in January was distracting.” For the latest round of layoffs, Brummel wrote that Microsoft “leaders have agreed to streamline their e-mail communications.”
Of course, The Wall Street Journal found out about the don’t-talk-about-the-layoffs e-mail when a copy of Brummel’s memo “was posted in the comments section of Mini-Microsoft, a blog run by an anonymous Microsoft employee that’s popular with company staffers.”
This just proves one of the basic rules that every smart, thinking manager should inherently understand: Trying to muzzle or otherwise pressure employees to limit communications about something as serious as a mass layoff is both futile and shortsighted.
Microsoft management will undoubtedly claim that limiting e-mail communications in this instance is a good thing. In fact, Brummel’s admonition is that “rather than sending e-mail, we encourage you to meet with your employees face-to-face or via Live Meeting, where possible, to address their questions.”
Face-to-face communication, especially about something as critical as a mass layoff, is always the best way to go. But, most anyone who has handled layoffs will tell you that over-communication is always preferable to under-communication, so why would Microsoft want to limit in any way a critical tool they have to help communicate with both the departing and surviving employees?
Never mind the odd notion of a high-tech company wanting to stifle high-tech communications; trying to tell employees NOT to discuss something as serious as a mass layoff, in any way, shape, or form only invites more rumors and discussion of the very thing that management is trying to curtail.
And, it fails to understand the psychology of layoffs. This will be the ONLY real topic that Microsoft people will be talking about right now, and a management admonition to limit discussion about the situation in any way is simply futile and counterproductive, because workers will be chattering about the layoffs ad infinitum, no matter what management says.
This just proves another management truism: Don’t ever underestimate the ability of smart companies to do dumb things. You’d think Microsoft would have learned this lesson from the overpaid-severance fiasco, but clearly, handling layoffs the right way is something that even highly successful companies like Microsoft have a hard time getting straight.
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