Lesson In Business Leadership: Look In From The Outside

Some years ago, my then flatmate raced into the living room, arms windmilling, expletives flying, yelling that there was an imminent risk of severe flooding in our bathroom.

Six floors up, with residents underneath us, this was not good news. Galvanised by her panic, I raced into the bathroom with her.

Sure enough, the water was centimetres from the rim of the bath, and water was pouring from the taps. “The taps, the taps!” my friend’s voice rose as surely as the water, “they won’t turn off!” Sure enough, they spun uselessly in her hands.

Are you viewing this scene with the clarity that detachment can offer?

“How about we take the plug out?”

The answer was obvious but to my otherwise very intelligent flatmate she had become lost in the problem of the effect – she was unable to see the simple solution to the cause of the problem. The fact that she was a lawyer with an apparently “impressive intellect” provided much mileage for gentle ribbing from our circle of friends.

Did you see the solution immediately? The same “blindness to the answer” can happen in business on a large or small scale.

Performance improvement – a great example

In 1993 Lou Gerstner took over as CEO at IBM, a large, complicated, cash-strapped organisation teetering on the brink of disintegration.

Gerstner took hard decisions in bold steps – reversing a plan to separate the company’s divisions, allowing them to self manage and brand.

He raised money through asset sales and implemented massive cost cutting with redundancy programs.

Gerstner then created a new focus on IT services and emphasised the importance of the internet as a key business tool.

Underlying his success was his cultural transformation of a management that he believed had become preoccupied with itself rather than its customers, with divisive rivalry between departments.

He focused on rewarding teamwork and, finally, on ditching old products – a move lifelong employees had resisted.

The key to Gerstner’s successful tenure as CEO was his belief in the importance of approaching IBM as an outsider.

According to Gerstner, “insiders are the worst people to judge what’s happening to a business”.


Lesson in Business Leadership: Look in from the outside

  • Take stock: ask yourself what an outsider would think of your company or the situation that you are facing?
  • Actively source third party opinions: check consumer opinion through surveys, focus groups and market research.
  • In crisis or growth situations: consider using experienced, proven interim senior executives, to provide detached clarity and insight.

Sue Morgan was a senior executive at Vantage Performance and Vantage Human Capital specialising in providing people solutions for businesses. Attracting, recruiting, motivating, training and managing the right people is the key to unlocking the potential of your business.

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