Writings
Foreword by Peter M. Senge, page 3
The essence of the type of manager we wanted to develop was someone who could confront current problems with an appreciation of history, someone who would not accept solutions with negative long-term consequences. When you do that, you not only jeopardize your business, you demoralize your people.”
Bill’s interest in theory extended from the theory of the business to the theory of building a values-based organization. In the 1970s, Adam and O’Brien jointly developed three guiding values: localness (make no decision at a higher or more central level that could be competently made more locally), openness (encourage people at all levels to challenge the assumptions underlying their and others’ decisions), and merit (the ultimate criterion for all decisions is the health of the enterprise as a whole). Clarifying these three values took an entire decade—it took that long to discover what values were really needed to guide decisions, and to develop shared understanding of what these values meant in practice. Gradually, Hanover’s board of directors started to understand the importance of these values as well, but they were puzzled by O’Brien’s approach to building commitment. He began to get pressure from the board to put these values into the performance review process, as many companies were starting to do. “Only if you make people’s promotions and pay depend on living according to our values can you show people in the organization that you are really serious,” board members would say. “Thank God, we never caved in to this pressure,” says O’Brien. What the board members had to come to understand, O’Brien says, “is that a value is only a value when it is voluntarily chosen.”
Incisiveness like this gradually led to Bill’s being recognized among many peers as a “philosopher-CEO” extraordinaire. After he retired, he became a personal advisor to several CEOs attempting to bring about similar transformations in corporate culture. When he would make one of his rare visits to one of these companies, it was quite an occasion. “People value Bill’s counsel so much,” commented one executive. “He has become a genuine elder in the SoL community.”
In 1998, we were launching a new SoL research initiative on the challenges of assessing business performance in ways that deepen and extend innovation rather than intimidating people and reinforcing fear and internal competition. Bill opened this session with a presentation that was vintage O’Brien, on “my nine frustrations as a CEO”:
- Fog in seeing real business results.
It is very difficult to see how a business is performing in fewer than five to ten years, given the inherent ebbs and flows in any business. - We don’t understand gestation periods.
It is difficult to judge the effectiveness of basic innovations in culture, processes, and capabilities, given inherent time delays. - War between the short term and the long term.
People at the front lines often know that disinvestment is occurring in a business, but this can be covered up for many years. - Self score-keeping: Is it more temptation than management can handle?
Pressures to make short-term results look good are especially pernicious, given that companies are basically their own scorekeepers. - Is the basic problem lack of knowledge or lack of virtue?
- How do we embed “leanness” as a basic virtue, starting at the top? The
temptation is to get “fat” in good times, which leads to large-scale layoffs.
I worry about companies that can lay off one thousand people but not one person in a position of authority who fails to command people’s respect. - Much damage is done trying to quantify what should not be quantified.
- Much improvement is possible by simply avoiding dumb things that everyone says you must do.
- What does it take to develop a “legacy mentality” in corporations?
A core leadership dilemma today arises because those at the top want to “put their stamp” on the organization, thereby leading to superficial versus significant changes, which require longer time-horizons than “one CEO’s watch.”