Surviving in an Enterprise in a leadership role without doing anything

Most of us have read the 3 envelope parable on corporate challenges and careers; for those who have not, an abridged version. A newbie leader is given 3 envelopes by the outgoing incumbent to be opened only in cases of dire trouble. He opens the first one when challenged in a management meeting and confronts the wisdom: Blame predecessor ! A year passes when again he is in trouble; the second envelope ? Restructure, create new strategy. Survive ! Final envelope’s turn comes after a gap which reads: Create three envelopes !

Corporate world is full of pseudo professionals who survive and at times thrive with their mastery of jargon, leaning on others, taking away credit from own team, agreeing to their immediate managers, sucking up to those who matter and finally using vendors to give them dope that makes them look good. The malaise is a lot more in the technology world that invents acronyms, jargon, and new fads with regularity confusing even technophiles; tech vendors are happy to provide spinal support in return for business.

The masqueraders can be seen at most conferences and seminars nodding intelligently at speakers and asking questions; they flock together and stay away from the intellectuals. They are not to be confused with the incompetent who shy away from any public appearance who only focus on internal politics and their survival depends on the first or second envelopes at different times with different folks within the company; their survival is also reliant on finding a godfather or some capable team members.

Pareto’s principle applies here too but inversely; the majority are able to get away with their pretenses and a small segment gets caught often shunted out by bell curve distribution. At senior levels the collateral damage is high to the enterprise, setback in business or industry at times difficult to overcome; weeding out such ineffectives takes time and effort which most companies are reluctant to invest. It also reflects badly on their ability to hire talented good people or separate cheese from chalk !

Take the case of this large enterprise which hired – let’s call her Suzy – to a senior position; she had come through the interviews well with help from an insider who coached her on what to say. Nothing wrong with that, everyone seeks whatever help they can to ace an interview for a position that they want badly enough. Such was the situation for Suzy too as she had been force exited from her past company post restructuring, a fact that remains undisclosed. She chatted her way through to securing the position.

Her inherited team compared her behavior, expertise, skills, knowledge, connects in the industry, understanding of the industry, personal traits, leadership qualities, desire to connect with them, essentially sizing her up as a leader who will influence their future. The comparison by the team with the earlier person was obvious and natural, the results however not in her favor; she recognized the fact and created an impregnable veil shutting off any discussion. The team knew the disadvantageous position thus prevailing.

The team toiled harder only to be cut off from credits scored by their work, giving them no visibility nor allowing any of them to interact with decision makers lest they expose the insecurities of their leader. Any attempts to bypass the straightjacketed process were met with reprimands and promise of future retributions. The iron lady brushed aside her rusty demeanor allowing those who made up her coterie to gain favors at the expense of the others with resultant attrition in the inherited team as collateral damage.

It was a matter of time that Suzy will reach the third envelope stage, except that she had been able to demonstrate progress for now with the first (envelope) being pulled out like a trump card whenever something was not as expected. It was a matter of time that management took cognizance of the fact that the past was distant and she had had enough time to change it. It was a matter of time that the Board recognized there has been no significant initiatives from her stable despite the rising costs and industry moving at a faster clip.

Different enterprises wake up to eventualities at different stages of their progression; when growth and profitability is above target, no one really cares for the deadwood, they are too busy celebrating. Search for termites starts when everything is not hunky dory or when a new leader takes over reins and has no history, baggage or axe to grind. Eventually the overdue surgery takes place cleansing the system to restart; then there are companies who are reluctant to take tough decisions, they embrace mediocrity for long.

The fine balance between managing growth and profitability and differences between enterprise and startups

Established enterprises are mostly like sloths who move at their own pace when reacting to any kind of market or environmental changes (there are exceptions to every rule and there are some to this one too). Many get there eventually due to the resilience in the business and the sheer size that keeps the momentum going in their favor. Some suffer short-term impact and brush it aside as a learning; in rare cases if the company loses direction or has a significant impact, they become prey to the opportunist predator or break into pieces.

We grew 15% last year, the market grew 12%, so we are doing good; this year the forecast for the industry is 13%, let’s target 16% growth. Our profitability is good and in line with industry numbers, we benchmark favorably. Enterprises are predominantly organized in silos, each chasing respective targets on profitability and growth which are derived from past performance. Rarely a division or Business Unit thinks of breakthrough performance; the entrepreneurial spirit is rarely seen amongst enterprise managers.

Checks and Balances matter a lot to the Board, Management and Leadership of enterprises; they live and swear by ratios and manage balance sheets. Targets are set, budgets managed, numbers scrutinized, long weekly and monthly reviews held to make sure that everything is working as expected, no surprises. Staid growth married to acceptable profitability ensures that numbers match quarter on quarter. Aberrations if any require painful explanations and root cause analysis only to be repeated ever so often.

Despite the world having seen many black swan events in the last decade or so, enterprises continue to live in their world consciously immune to potential threats. So when disruption occurs from unknown sources not factored into annual operating plans and strategic business plans Management teams scurry into offsite meetings to evaluate, synthesize the information, and arrive at counterstrategies. Alternately a big name consultant is hired to review the impact of disruptive forces and advise the management on recourse.

On the other hand startups enjoy the advantage of no historical data and thus they dream audacious and hairy goals; they want to change the world with their version of solution, product or business model; create new markets, beat big incumbents, or at least launch a flange attack to gnaw at market share. Most of them are driven by young entrepreneurs wanting to emulate peer success; their prime focus remains growth, at times driven by easy money at their disposal or their extreme risk appetite and nothing to lose attitude.

Technology driven startups have low entry barriers that allows for me-too ventures with irrational euphoria. Flash in the pan success emboldens the space until it gets crowded with spectacular failures, at times taking an entire ecosystem or micro-segment of the industry with them. Despite large amounts of fold ups, they continue to mushroom with reduced cycles to merger or demise. Some of these have been in hyperlocal services, aggregation of services, hyperlocal logistics, home ordering, and many more.

The moot question is why are enterprises unable to launch such blitzkrieg and capture the mind and imagination of their customers ? Why are they so obsessed with numbers and ratios ? Exceptions aside, majority of startups are long way off from making money while they continue to invest in market expansion; exceptions aside, majority of enterprises have not been able to replicate the success of the technology driven pure play companies; they continue to be at different ends of the spectrum in their results.

Experiments with Design Thinking and Inside Out innovation models have not been able to live up to expectations in the enterprise. Lateral shifts, hiring fancy titled self-proclaimed experts like Chief Digital Officers and the like have boomeranged. Politics and power struggles have seen the demise of many good initiatives with CXOs squabbling about credit and pushing the blame. The exceptions have grown with focused attention and faith in their business models as well as the teams who shepherded the successes.

Reality is that conventional wisdom and progress over the years brings in a certain way of working to enterprises that defines them; they find it difficult to give up their winning formula and move on to a new paradigm. Reality is also that startups with no baggage find it easy to let go and learn from their failures; at times they are also naïve in their thinking and repeat mistakes. A crossover between the startup and the enterprise culture would probably be a recipe for success or disaster of major proportions.

Which one will it be ?