The Collapse of Leadership in a Digital World

In a digital world where everything that can be measured is measured, do you still need strong leadership? What difference does management make when data steers the ship?

Many technology companies have the mindset that data trumps all, but are some companies suffering as a result? Look to the news to see how this is playing out:

•Zenefits’ founder Parker Conrad was thrown out for creating a culture that violated insurance laws
•Uber’s CEO resigned for multiple behavioral reasons (writing code to defy local authorities; sexual harassment allegations; staff and senior team exiting or fired)
•Volkswagen techies wrote ingenious code to defeat auto emissions testing. Smart, but illegal.

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In 1932, one of history’s greatest architects, Frank Lloyd Wright founded the Taliesen Fellowship and welcomed 23 apprentices into his world. For the next 27 years Wright taught and lived between Wisconsin and Taliesen West in Scottsdale, Arizona, with numerous sets of students, some of whom went on to work for his firm after graduating. In his 1943 memoir, Frank Lloyd Wright: An Autobiography, Wright listed a Taliesen fellow’s ideal qualities:

Fellowship Assets:
I. An honest ego in a healthy body – good correlation
II. Love of truth and nature
III. Sincerity and courage
IV. Ability for action

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Selling in a Few Years? Start Packaging Your Company Now

According to a Harvard Business Review report, the failure rate for mergers and acquisitions sits between 70 and 90%. Even before the deal closes, it’s not uncommon for deals to unravel.

If the odds can be overwhelmingly negative, what can you do to increase your chance of success if you are looking to sell your business?

Prepare.

Don’t wait for the M&A process to begin to get your team in gear – that’s a sure fire way to fail.

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When an interim CEO or CFO parachutes into a company they have first-hand experience of what measurements and benchmarks (analytics) are useful and how to use and prioritize them. There is also solid recognition that data and numbers can eliminate a great deal of negativity and get people focused on solutions. Taking action is key, and that often begins with active listening to quickly figure out the exact condition of the company.

An interim must get the facts by asking people what they see and where their main areas of concern are. It is rare during this initial listening process that someone does not say something like “if we had better lighting in this area quality control would improve!”

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inc-logoThis article featuring Association of Interim Executives RED Team Member, Richard Lindenmuth, was originally posted on Inc.com.

You’ve heard a lot about the benefits of non-hierarchical organizations, from Morning Star Tomatoes to Zappo’s to the David Allen Company. And you likely know by now that while a flat organization is an appealing concept, some companies have backed away from a flat structure or reported that they can be tricky to get right.

Or maybe they just don’t work at all. That’s the opinion of Richard Lindenmuth, who for 30 years has served as an interim CEO, and works with the Association of Interim Executives. One of his most recent tasks was turning around the troubled company Styrotek. He achieved this goal in large part by un-flattening its previously flat management structure and was able to return Styrotek to profitability in three months — even though it was affected by the California drought.

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I’ve done it for three decades, turning around companies from agriculture (such as Styrotek) to telecommunications giants (such as ITT). As interim leader, I have to parachute in, quickly gain trust and respect from all levels, determine a course of action, and unite everyone to stay that course—all within a limited timeframe.

It takes leadership strategies far beyond business and managerial chops, though certainly those are necessary. You can’t lead effectively without a connection to the people in the company; emotional intelligence is a must. Think of it as ‘strategic empathy’—being sincerely focused on the individual, but always with the big picture top of mind.

Whether you are an interim or a permanent CEO, these 7 tips for using strategic empathy bear relevance for anyone in a leading role.

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Over the years I’ve encountered far too many business owners who profess comfort with their current levels of revenue, service, culture and rightful place in society. When asked about growth plans, they offer some variation of the line “If I had any more business, I would lose the capability to service my existing business.”

I call that business situation, Stasis. Some of the definitions in Webster are:
• a state of static balance or equilibrium : stagnation
• a state or period of stability during which little or no evolutionary change occurs

For me, Stasis is synonymous with Disaster.

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Everyone has read studies proclaiming the majority of acquisitions fail to create shareholder value.  Yet we are witnessing a roaring M&A market with very frothy valuations and no lack of buyers willing to venture into the game.  Great for sellers.  Timing is everything – private equity groups are finding rich exits to vintage deals entered into prior to the great recession that for years looked like they would be losers.  These favorable returns are giving private equity investors even more reason to bring fresh capital to the table.  Meanwhile, strategic buyers, armed with high valuations on their publicly traded shares and plenty of cash on hand have the wherewithal to bid aggressively, further driving up prices.

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I was travelling recently near Guanajuato, Mexico, to the small village of Santa Rosa de Lima, population 3000. We visited a cooperative run by five local women called Conservas Santa Rosa. This company was founded in 1998 with support from the government, which sought to exploit natural resources such as wild fruits produced without fertilizers. They started making strawberry jam by hand for the local communities and now have a contract to supply a national restaurant. With this growth they have raised the standard of living of over fifty families and are now sending their children to school. They have been recognized by the UN as a successful rural productive project.

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