The Bethune-Bonderman Saga
As CEO of Continental Airlines, Bethune not only turned the airline around but also transformed it into an industry model with his “clean, safe, and reliable” vision, until Bonderman, the company’s largest shareholder, wanted to sell the company to Delta. It was Bonderman who put the investment group together to get Continental out of bankruptcy in the early 1990s; after that, he hired Bethune. Bonderman’s and Bethune’s vision matched until Bonderman wanted to sell the company to Delta to cash out. That’s when the visions, or should we call them certainties, diverged. Bonderman believed that selling the company to Delta was a perfect solution. Bethune believed that such a sale would betray the culture and people he’d transformed. Bethune convinced the board to reject the Delta deal in favor of a Northwest deal. But when Bethune was unable to operate autonomously under Northwest, he started a crusade to buy the company back. Once again, Bonderman fought him, suggesting that Bethune was drunk on his own arrogance. Behind the scenes, Bonderman talked to the company’s number two executive about replacing Bethune. When Bethune found out, he pushed even harder by helping the government in an antitrust suit against Northwest. Northwest quickly sold back its stock to Continental, which infuriated Bonderman. Bonderman then began investing in competitors, which infuriated Continental’s union leaders and Bethune. Their conflict and eventual standoff led to only one agreement: Bethune would step down as CEO, if Bonderman would leave the board. Regrettably, such “my way or the highway” standoffs, which happen in organizations more often than most people realize, point to an excess of certainty and a lack of vision. Vision is open and alive, flowing from market opportunities, customer needs, organizational capabilities, talented people and leaders savvy enough to forge common purposes. Certainty, on the other hand, is closed and dead, reflecting ego, bias, pride, eccentricity, and leaders limited by their dependence on personal charisma, organizational authority, and external crises. While Bethune and Bonderman may have originally agreed upon a vision for Continental, the vision slowly deteriorated into a conflict of certainties. Where vision is, certainty is not; where certainty is, vision is not.
Vicious Cycle
Oftentimes a vicious cycle is at work in organizations–leaders consciously or unconsciously malpractice management, employees react with disappointment and disgust, leaders attempt to correct their malpractice, employees perceive leaders’ corrective efforts as disingenuous and manipulative, leaders react with disappointment and disgust but they try again, employees cautiously give leaders another chance, leaders improve but not as fully and quickly as employees would like, employees become angry and call leaders hypocrites, leaders become angry and call employees whiners, and so on until both leaders and employees accept management malpractice as the norm–an inescapable reality of organizational life. This vicious cycle continues until the organizational culture becomes mired in cynicism and distrust. The solution? Break the cycle by seeing it and exposing it–both the leader’s underreaction to malpractice and the employee’s overreaction to imperfection. Only when management malpractice is replaced with a widespread adherence to great management principles (timeless and universal) will the labels of hypocrite and whiner disappear. Then you can prevent the vicious cycle from returning.
AOL and Time Warner
Former AOL Time Warner Chairman Steve Case was a brilliant technocrat who built AOL and orchestrated the purchase of media giant Time Warner. It was a brilliant move that made him the darling of the business world—until he was finally forced out by Vice Chairman Ted Turner when the market value of AOL Time Warner stock dropped by more than $200 billion due to declining membership, dwindling advertising contracts, accounting irregularities, and mismanagement. What a reversal. Within two years, Steve Case went from heralded business genius to an ineffectual, introverted geek. Yes, Case built AOL into a powerhouse and, yes, he pulled off a coup in buying Time Warner, but it didn’t last because Case didn’t or couldn’t change his leadership approach. The changes he masterminded outstripped his own ability to change. Unfortunately this happens all too often to CEOs and senior executives who fail to recognize their limitations and weaknesses. Steve Case’s malpractice? Asking other people to change, while remaining unwilling to change. Leaders who fail to change themselves personally at a faster pace than their people change will eventually fail their people. This management malpractice has arisen because rationalization and decisiveness are valued over reconsideration and exploration. But stay tuned. There is life after management malpractice. Steve Case is changing. He’s joined forces with former Secretary of State Colin Powell to fix the nation’s health system through the launch of Revolution Health Group. Good luck Steve.
Our Mission
Management malpractice has become the norm in today’s organizations. Most employees are not surprised when bullied, lied to, cheated, discriminated against, abused, manipulated or harassed at work. Recent corporate and government scandals are evidence for this claim and paint a very grim portrait of the future. Such scandals, however, give rise to a new opportunity for revolution and change by casting light on the sickening scope of today’s workplace negativity and angst. We cannot fail to resolve the growing crisis that these scandals have revealed. Working people around the world, from executive to entry levels, must rally together in opposition to what is becoming an epidemic of malpractice and abuse, before it destroys more lives and organizations. My book Management Malpractice and its interactive companion www.managementmalpractice.com offer workers at all organizational levels a manifesto that can band us together in defense of our futures. They are designed to encourage, inspire, provide support, give hope and arm you in your fight against organizational abuse and management malpractice. The web site’s interactive quality picks up where the book leaves off, providing ways for you to share your personal run-ins with malpractice, your successes in battling against it, and your questions that arise out of both experiences. Through persistent, widespread dialogue, we can make an organization’s degree of management malpractice a significant criterion in judging its viability, success, and longevity. If the consequence of malpracting management is loss of talent, customers, shareholders and profits (which it is), then organizations everywhere are duty-bound to re-evaluate and revitalize their management practices. Please join us!
Sincerely,
Craig R. Hickman
Where’s the Courage, Humility and Teamwork?
Much has been written about the importance of courage, humility, and teamwork in business in recent years. The courage to speak your mind, the humility to change your mind, and the teamwork to create real common purpose—all are good prescriptions for creating a dynamic corporate culture where ideas are generated and expressed freely. However, most people in today’s organizations are not comfortable speaking their minds because they’re afraid they’ll be inappropriately judged or even punished. People in many organizations are afraid to exhibit humility or change their minds because such behavior is considered a sign of weakness or an inability to make decisions. And while everyone knows that teamwork is critical to any organization’s success, most people hold back, be it a little or a lot, in the name of self-protection and survival. The fact is too many business executives share the paranoia of Donald Trump, who once said, “People who you think are your friends in business will take your money, your wife, your pets, and everything else they can.” Such attitudes rarely create the sort of environments where people feel free to raise and discuss their sincere concerns–in fact, such attitudes inevitably lead to management malpractice.
Rethinking the World
For all of the lip service it receives, rethinking seems sadly, even tragically, absent in most organizations. Rethinking became a buzzword in the 1980s, but sometime in the 1990s, it became such a commonly used word for solving everything from personnel disputes to product revitalization that people began ignoring its rigorous demands. Leaders, managers, and employees everywhere talk about rethinking everything, but few people actually do it, and fewer still do it well. And yes, lots of people go through the motions of rethinking, but most of them can’t get past their histories, biases, perspectives, and agendas to see the world through fresh eyes. Likewise, most organizations can’t get past their obsessions with efficiency, effectiveness, and short-term performance to provide the necessary resources, focus, and environment for quality rethinking. So where’s the management malpractice? Managers and leaders who encourage employees to rethink the world when all they really want is for employees to rethink their own attitudes, habits, and behavior, in order to conform them to the organization’s agenda–that’s management malpractice.
Lucent Technologies
A few years ago, in a classic case of ignoring the diverse perspectives and valuable feedback from employees, Lucent scientists told CEO Rich McGinn that the company was losing its competitive edge in new research and technology, while his salespeople told him that sales were being propped up by deep discounting rather than real growth. Instead of listening to his people and making substantial changes, McGinn concentrated on giving the Wall Street stock analysts what they wanted: unwavering growth. Lucent’s scientists and salespeople eventually were proven right, and McGinn was replaced because he kowtowed to Wall Street rather than relying on the advice of his own employees. McGinn was finally replaced by Henry Schacht, who spent his first few months in the saddle convincing employees that their diverse opinions and contributions mattered, a job which current CEO Pat Russo is continuing. The malpractice? Espousing the principle of “fostering diversity” to appease employees, satisfy government agencies and avoid legal exposure, while ignoring and denying its real potential for strengthening teamwork, increasing individual fulfillment, and improving organizational decision-making and performance.
Valuing Every Employee Contribution
Every successful, great organization values a broad range of contributions from its employees. In fact, for the past two decades, management books ranging from Tom Peters’ and Robert Waterman’s In Search of Excellence to Jim Collins’s Good to Great have identified an organization’s ability to consistently value and nurture a broad range of employee contributions as one of the most important distinguishing characteristics between greater and lesser corporations. All employee contributions must be properly valued if an organization expects its employees to increase their competency or level of performance and reach new heights. The message is straightforward and clear: value the contribution of each employee fairly—which includes placing people in the right jobs so that their attributes and competencies can be more richly utilized—or suffer the consequence of having disgruntled employees whose contributions grow weaker over time. Management malpractice occurs when managers and leaders tell employees that their contributions—be it personality traits, style of management, skills, competence, or approach to the job—will be valued equitably and fittingly throughout the organization when they know that all contributions aren’t and won’t be valued fairly. This includes allowing an employee to stay in the wrong job—a job that does not match his or her interests and capabilities—without doing anything about it.
eBay’s Amazing Culture
Although it has not yet graced Fortune’s most admired companies list, eBay is the fastest-growing company in history, “faster than Microsoft, Dell, or any other company during the first eight years of its existence,” according to Fortune magazine. And eBay’s $3.2 billion in revenues are likely to produce in excess of $1 billion in operating profits. Impressive! CEO Meg Whitman was recently named as Fortune’s Most Powerful Woman in Business for building the largest online marketplace on the planet. Very impressive! However, what’s most impressive is the company’s enabling organizational environment. There are no barriers to accomplishing anything and everything necessary to grow eBay’s amazing trading network. “I do use the word enable a lot,” Whitman tells a Fortune reporter. “Enable, not direct. Use carrots, not sticks.” And it works brilliantly. The company’s 7,500 full-time employees, and the 430,000 independent traders who earn their living from the site, are an independent, creative, even “rowdy” bunch who don’t want to be stopped from accomplishing what they need and want to accomplish. Fortune calls it Whitman’s ability to “do nothing” that enables her people to do whatever’s necessary to build and grow the company. Barriers? What barriers? They don’t exist at eBay, at least not for very long. eBay’s organizational philosophy certainly empowers employees, making them feel that the company believes in them and trusts them. “Like a mom who tells her kid that she knew he could do it,” writes Fortune’s Patricia Sellers, Whitman believes in eBay’s self-regulating marketplace, which goes a long way toward explaining the company’s egalitarian, barrier-free organizational environment. “eBay’s success will always be based on your success,” Whitman regularly tells her customers, “eBay reaffirms my faith in humanity, eBay is proof that people are basically good.”
Accepting Responsibility
Accepting responsibility stands as one of the hallmarks of great leaders and great organizations. When leaders or organizations fail to accept their responsibilities and own their mistakes, they lose their credibility in guiding, directing, and inspiring others to accept responsibility. Once managers or leaders cross the line from assuming responsibility to avoiding responsibility they immediately destroy their ability to hold others accountable for their actions. This goes for people as well as organizations. Any organization that fails to accept responsibility for the consequences of its policies, procedures, and practices will lose its influence, power, and authority to demand that its employees accept responsibility for their actions. Eventually, the organization will destroy mindshare with shareholders, lose its most talented people, dampen customer loyalty for its products and services, and generally erode its credibility in the marketplace.
Individual Protection Against Organizational Abuse
Great management principles that are considered by most people to be timelessly and universally true—principles such as sharing ideas at every level, fostering a healthy dissatisfaction with the status quo, treating employees as your most valuable asset, valuing the contributions of each individual, creating an environment where people feel free to raise concerns, establishing a foundation of respect and trust, enabling people to tap into their full potential, listening to all viewpoints, constantly challenging assumptions and biases, and accepting responsibility for your actions—provide a vital shield and protection for individuals in organizations. When such universally accepted principles and truths are ignored, forgotten or preached but not practiced, individuals lose their protection and become subject to managers and leaders who can easily manipulate, abuse and injure them. Just as a nation without the rule of law cannot protect its citizens from physical harm, an organization without the rule of great management principles cannot protect its employees from emotional and psychological damage. Management malpractice occurs whenever managers and leaders fail to apply principles that have been tried and tested, proven and accepted as timelessly and universally true.
The Walt Disney Company
After 21 years at the helm of The Walt Disney Company, Michael Eisner is stepping down. Some say he stayed way too long, including Roy Disney, son of Walt’s business partner and brother Roy, who resigned from the company more than a year ago, both as chairman of the Feature Animation Division and as vice chairman of the board. Why did he resign? In his resignation letter, available on SaveDisney.com, he points out several gross failures that the company has suffered in the past seven years under Eisner’s leadership, including the perception by Disney stakeholders—consumers, investors, employees, distributors, and suppliers—that the company has become “soul-less” and too focused on the “quick buck” rather than creating incredible customer experiences. Many believe as Roy Disney does, that Michael Eisner killed the dreaming and imagining at The Walt Disney Company in favor of exploiting market positions and maximizing returns. You be the judge.
Too many organizations today have become so complex, convoluted, dispassionate, and demeaning that they smother imagination and creativity, making it ever more difficult for people to accomplish incredibly innovative work and turn their imaginings into brave new realities. How many people in your organization feel encouraged and rewarded for dreaming and imagining at work? Do you? Dreaming and imagining are discontinuous, divergent activities that require a different sort of workplace to flourish. At the same time, dreaming and imagining must cohabit with more continuous, convergent activities such as analyzing, controlling, and planning. Figuring out how your organization can best integrate the two is exactly why you need more dreaming and imagining in your organization. But it’s obviously not easy, even for the company that makes dreams come true.
Global Problem, Local Solution
According to a recent Associated Press story, “Allegations and admissions of bribery, corruption and misdeeds have surfaced at the highest levels of business this summer at five of Germany’s blue-chip companies: BMW, Volkswagen, DaimlerChrysler, Infineon and Commerzbank.” A number of executives from these companies have been fired or forced to resign. Some face criminal charges. Transparency International (TI), an organization devoted to fighting corruption through access to information, reports that “a total of 106 out of 146 countries score less than 5 against a clean score of 10,” (scores based on TI’s Corruption Perceptions Index). “Sixty countries score less than 3 out of 10, indicating rampant corruption.” Management malpractice is a global problem. The only way to stop it is to act. ACT now! Begin today by exposing just one management process, practice or activity in your organization that hinders, thwarts or makes it unnecessarily difficult for you and your co-workers to perform your jobs, grow and develop, coordinate with others, find meaning and fulfillment in your work, create value and get results for yourselves and your organization.
Trust
Trusting another person requires exposing yourself to the possibility that the other person will disappoint you, take advantage of you, hurt you, or fail to obtain the promised results. Protecting or insulating yourself from such a possibility necessitates limiting the trust you extend to others, which in turn erodes organizational performance because trust is crucial to the growth, development and productivity of people. So how do you build a strong corporate culture that promotes, nurtures and demands trust? By removing the fear associated with being disappointed, taken advantage of, betrayed, or left with inadequate results—and that requires giving people second, third, fourth, fifth, and even more chances to learn from their mistakes. It also necessitates recognizing that mistakes are made every day at every level of the organization and that accountability for improvement, not blame or punishment, is the way to foster trust and value creation. Sadly, too many managers and leaders have learned to use fear to drive performance. Whether out of childhood conditioning or fear of reprisals from bosses, clients, shareholders, and board members, they employ threats and “scare tactics” to induce subordinates to obey. Using authority in this way may produce results in the short term, but in the long term, it destroys morale and organizational performance. If left unaddressed, it leads to management malpractice, creating an environment ripe for office politics, turf wars, toxic negativity, and a fight-or-flight response that will never produce sustainable excellence.
Microsoft
At Microsoft, nothing is impossible, including holding a position on the Fortune most admired companies list for ten years during the past twenty. This nothing is impossible attitude fuels the company’s constant challenging of assumptions and biases on a daily basis. According to Chairman and Chief Software Architect Bill Gates, “In the Digital Decade, you’ll no longer think of the PC as a tool to carry out specific tasks, it will become something you come to rely on all the time. The power of the PC will be as ubiquitous and reliable as electricity, and vastly more useful than any single device we use today.” You can’t embrace such a vision without constantly questioning everything you assume, everything you believe, and everything you do. But CEO Steve Ballmer’s alleged vows to “kill” Google and “bury” Goggle CEO Eric Schmidt point to potential management malpractice and a dangerous misapplication of Microsoft’s nothing is impossible attitude and vision. My advice to Mr. Ballmer? Don’t allow your short-term legal dispute with Google over the non-compete violations of former Microsoft employees compromise your long-term judgment and leadership. As CEO of one the world’s largest, most admired and visible corporations, you can’t afford to let out-of-control emotions, personal vendettas and sheer arrogance turn into management malpractice—for most senior executives, avoiding management malpractice involves overcoming or mitigating the impact of personal flaws, long-standing weaknesses and inherent blind-spots. Remember what you told your employees a few months ago: “Innovating, growing share and profits, and serving customers, all ensure that we have no time for wasted motion.”
An Open Letter to President George W. Bush
“Dear Mr. President, as a fellow HBS alum ‘76 and author of Management Malpractice: How to Cure Unhealthy Management Practices that Disable Your Organization, I implore you to avoid the natural human tendency to cover-up or diminish the seriousness of government failures and mistakes associated with the post-hurricane catastrophe in New Orleans. Make your White House investigation into our Federal response an open book—keep it as honest, thorough and transparent as possible. Ignoring, covering-up or denying mistakes and failures in the name of preserving confidence, faith and trust is one of the most serious and insidious forms of management malpractice. Such management malpractice would serve only to further abuse those who have suffered, retard corrective measures necessary to resolve the current crisis and prevent learning and change for the future. Stand up and take ownership of the failures and mistakes that led to the government’s sloppy, sluggish responsiveness. That’s what a truly great leader would do. Don’t allow this tragic disaster to transmute into the worst management malpractice scandal of the decade. Learn from these mistakes and failures and then take the necessary steps to make sure this never happens again. NEVER. This is clearly a defining moment in your presidency—don’t blow it Bushie.”
cc: White House staff
The Big Lie
To one degree or another, people everywhere are biased, egotistical, narrow-minded, thoughtless, dogmatic, insensitive or otherwise flawed. Yes, some of us are definitely more flawed than others, but the important point here is that all of us are flawed. FLAWED. That means we all make mistakes, bad decisions, wrong moves, stupid judgments, false promises, and a host of other absurd, yet human, blunders. The big lie is that people in positions of power, authority, prestige, celebrity or trust are somehow less flawed than that rest of us—the truth is they are not less flawed. In fact, famous leaders, artists, philosophers, scientists, inventors, politicians and other celebrities throughout history run the gamut from seriously to slightly flawed. Of course they do. The problem is that most people still expect their leaders, managers, mentors, teachers, coaches, journalists, poets, philosophers and guides to be better than they are—the truth is some are and some are not. Some malpractice management frequently while others malpractice management infrequently. So what’s the point? Everybody malpractices management to one degree or another, so we all need to work together to see it, expose it and prevent it—so we can reduce the discouragement, productivity loss, disengagement, cynicism, distrust, demotivation, apathy, discord, bitterness and depression experienced by people in organizations because of management malpractice.
Growing Disillusionment
Management gurus such as Peter Drucker, Tom Peters and Warren Bennis have written passionately about the growing number of absurdities in postmodern organizational life, but the absurdities continue to mount. In fact the gap between espoused management principles and daily management practice is widening in many organizations, making it ever more difficult to move from good to great and stay there. CEO Quinn Spitzer of Kepner Tregoe, the well-known management consulting firm in Princeton, New Jersey, regularly tells clients that the cartoon strip “Dilbert,” depicts the growing disillusionment with organizations and management in the United States. “Dilbert’s unflattering portrayal says a lot about how management has evolved in our culture. Cynicism is rampant,” Spitzer says. The result? People in organizations in the U.S. and throughout the world are becoming more aware of and disgusted with the increasing absurdities in organizational life. It’s time to do something about these insane absurdities—start exposing them today.
Kmart
Kmart, the forty-year-old discount retailer, built a powerful brand only to see it taken over by Target and Wal-Mart. Holding on to old assumptions and biases about low prices, quality products, store location, and marketing were not enough to save the one-time $40 billion retailer from massive layoffs, store closings, and bankruptcy. When competitors such as Target, Wal-Mart, Sam’s Club, and Costco changed the game, built stronger brands, and developed clearer marketing messages, Kmart just kept doing the same old things because, after all, it had been the first leader in the market. Kmart built the industry. However, it’s a big mistake to be so full of yourself that you never question your basic assumptions and biases. With a brand-new board of directors and executive team as well as a merger with Sears, maybe Kmart’s history will provide sufficient stimulation to constantly challenge assumptions and biases. Can Kmart discard old assumptions and biases to make its merger with Sears a success? Only time will tell.
The malpractice? Asking your employees to constantly challenge their assumptions and biases when you have no intention or track record of doing the same.
Abuse of Power, Knowledge and Relationships
Great management principles and strong corporate values such as sharing ideas at every level, respecting and valuing individuality, building a solid foundation of trust, enabling people to tap their full potential, and doing what matters most, to name just a few, provide people in organizations with vital protection against abuses of power, knowledge and relationships. When managers and leaders in organizations espouse such principles and values but fail to live up to them on a regular basis, they are malpracticing management—and destroying the confidence, trust and goodwill of their people. Over 70% of U.S. workers are disengaged at work—checked out, going through the motions or acting out their unhappiness—because of management malpractice. The abuse of people at all levels in organizations must be stopped if we, individually and collectively, expect to achieve new levels of progress, prosperity and fulfillment.
New York Times
When the New York Times discovered that Jayson Blair had been plagiarizing stories and inventing interviews, executive editor Howell Raines was forced to resign. In many ways, Raines had been a superb executive editor, but he didn’t listen to his staff, many of whom thought him to be domineering and biased toward certain star reporters. A culture was created that eliminated honest dialogue and the inclusion of all viewpoints. The malpractice? Embracing the idea of listening to all viewpoints in the organization as a way of making employees feel valued, important, and relevant, when, in reality, you have no intention of seriously considering their viewpoints, particularly when making crucial decisions.