Wednesday, July 10, 2013

Leadership: A Different Perspective,Part 2 Challenging the Status Quo.

Challenging the status quo

Challenging the status quo is perhaps the riskier pillar to implement. This is where failure has its greatest potential. Midway through my corporate career with a large pharmaceutical company, I accepted a job transfer to a division in Stamford, CT. This division made hair care products, and in our warehouse we had 125 people employed in the process of putting together orders for customers—sometimes 7 days a week, 24 hours a day. This was 1981, and technology and industrial engineering were challenging how things had been done in the past. With the assistance of an outside consultant, we took a look at our workforce productivity and also looked at making a capital investment in new computer-aided order picking processes and ways to make this function less labor-intensive. Our analysis told us that we could eliminate 50 positions if we invested two million dollars in new technology, technology which has never been proven or used yet, but on paper the idea seemed bulletproof. We knew there were several outcomes by challenging the way things had been done for years, and some were very positive, and some potentially career-altering for me. I could have chosen to stay with the status quo, or I could have moved forward with a factory automation program that revolutionized how we ran our warehouse for decades to come. If the project succeeded, our annual savings would have been $2.5 million with a $2 million dollar initial investment, and if it did not work, we could have wasted $2 million and lost the confidence of our workforce and our management. Since I understood the technology being proposed, I did not see 100% assurance to move forward; we made the investment, and with the exception of some start-up issues, the project was a huge success, leading the way for a promotion that soon followed.

The courage to speak out

The courage to speak out is how leaders get the most recognition. Martin Luther King Jr. was known for speaking out eloquence and is an example that most of us can readily identify with. But speaking out does not always assure that tings will work out the way you had hoped, as there are consequences associated with speaking out. King was jailed; other political leaders have fallen on their own swords, as well.

In my last corporate position before starting my own business, I was the head of corporate real estate for my firm. The firm was nearing the end of a lease on our corporate headquarters, and my role was to put together a strategy for the next 20 years as to where our corporate staff would be located and what was in the best interest of the shareholders first and employees second. To accomplish this, we hired a well-known real estate consulting firm, looked at the demographics of our workforce, and looked at what functions needed to be in New York City and which ones might be suitable to locate in more urban, less expensive areas. Throughout this process, we took a blank sheet of paper approach and decided to be open to a complete relocation or just stay where we were for another 20 years. After an exhaustive one-year study, we presented our results to our senior leadership, and my immediate supervisor was irate at our findings. Our findings were that we needed to split the corporate functions and take 80% of them out of New York City, and keep 20% or fewer of the senior leadership in midtown Manhattan.

So the day finally came, and the consultants and I made our recommendation to the EVP of the company, who got very angry wit the conclusions. First, we failed to factor in that the EVP has just bought an expensive apartment on Central Park West, was friends socially with our building owner and his comrades in top management—about a dozen or so—liked walking to work on nice days down Park Avenue… All of that has not been factored in. Being a bit of a novice, I thought our responsibility was to our shareholders first, as the new lease would be approximately $1 billion, and second to our employees, who every day were trying to save the company money in their jobs—but we missed the point. The point was that a company with 50,000 people does not make a decision like this for the greater good; it was more about feeding into the needs/habits of the top dozen people. We knew some of this going in, but felt that we needed to speak out, as this was an issue the firm would have to live with for the next 20 years. In the end, I stepped down in nine months, the company proceeded with a status quo direction of keeping things as they were, just giving the landlord a new lease, and the consultant collected their fee. Three years later, the EVP was fired, and the company split up their real estate and followed the strategy that was proposed.

I learned a valuable and expensive lesson. When you are in a corporate environment, doing the right thing has consequences. Standing up for what is right has consequences. At the end of the day, everyone knew what was right and everything got righted for the company. I on the other hand, decided I was born to lead, not follow, so I started my own business. For many, following is easy; for me, it was never an option.

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