Developing-Leaders-issue-27-2017

Viewpoint Developing Leaders Issue 27: 2017 | 15 experience. To make all of this possible, the founders lived on a shoestring. Even when Tatarko was pregnant with her third child in 2013 she flew economy class, leading by example. The quintessence here: the owners never took their eye off the ball. Customers remained king, making sure that everyone understands what really matters. For large companies, key performance indicators also present an opportunity. When Dell for example went from success to success in the 1990s it had just four metrics that were applied across all lines of business. The small number ensured focus and transparency. They are, however, not substitutes for the passion displayed by Adi Tatarko and Alon Cohen. This type of passion is evident when you talk to a Shell geologist about her latest exploration adventure, or an Audi engineer about the sound of an engine. The metrics simply ensure that the system is in sync with the frontline and provides a line of defence against bureaucracy that is bound to grow with the size of an organization. Be a great boss – but not a charismatic one Daimler was set for greatness but never made it thanks to Edzard Reuter. As Daimler’s CEO in the 1980s he had a vision of transforming a premium car manufacturer into an integrated technology conglomerate. Such a dramatic transformation is never easy and in Germany it is particularly challenging, as you need to get the unions on board, convince the conservative banks, and bring the government on board. Only someone with the power of persuasion that Edzard Reuter had, was able to pull this off. Unfortunately, the vision itself was not a very good one. Some of the acquisition targets turned out to be flawed and overpriced. The exchange of ideas across the different divisions never happened. And co-ordination was tremendously time consuming. In the end Edzard Reuter was asked to leave and the company declared the biggest loss in post-war Germany. The danger of charismatic leaders is that they are able to take companies to places it would usually not go to. That could be extremely profitable – Steve Jobs comes to mind here – but also go horribly wrong. Relying on just one person is simply too risky. In an exciting academic study Arijit Chaterjee and Don Hambrick measured the prominence of CEOs photographs in annual reports, their prominence in press releases, use of ‘I’ in interviews, and compensation relative to the second-highest-paid firm executive. On average, the firms they led performed no better or worse than other firms, but it tends to be extreme. Either extremely good or extremely bad. MajestiX B / Shutterstock.com StockStudio / Shutterstock.com

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