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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
CASE STUDY
Leadership in Perspective
This case was written by Associate Professor Eoin Banahan, Managing Director, Roundrose Associates, under the supervision of Professor Pierre Casse, Dean of Berlin School for Creative Leadership. It has been prepared as a basis for class discussion and is not intended to illustrate best practice, or otherwise, in a business situation.
Business Leadership Review V:II April 2008 Page 1 of 11
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Background The Business Leadership Review Case Study Series is an opportunity to participate in a collective debate of key management issues, to enhance the understanding of leadership through mutual interactive learning. Readers are asked to make comments on the situation at hand and get responses to their views from the case writers. The Case Study Series is a chance to discuss key topics of leadership and management within an interactive forum. The fourth case in this series, BusinessWise, is about effective leadership. The case itself continues after these introductory comments. The Case Study Process The key to the success of the Case Study Series is interaction. Our main objective is to make this case analysis lively and rich in personal discoveries. To this end, please contribute to the process by responding with your comments and answers to the questions below. Your input and analysis will be published in the next issue of Business Leadership Review, along with responses and conclusions from the case writers, Professor Pierre Casse, and Associate Professor Eoin Banahan. The Case – A Word on Effective Leadership The latest case in this series, BusinessWise, is about reflecting on what is effective leadership in the field. It is about leadership in perspective. The case explores three different perspectives of effective leadership and how three corporate leaders view their respective roles. It is clear from the discussion that there are different ways to view the leadership role and how you approach it depends upon the situation in which you find yourself. Whilst this may be obvious, perhaps it is worth considering if indeed we can underline some critical key elements to effective leadership in today’s turbulent business world. What do you think? What is your experience? What is your perspective?
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
The Questions In order to facilitate the debate we challenge the reader with the following questions: Read the case study BusinessWise and answer the following 3 questions: 1. What do you think of the three different views of effective leadership presented in the case? Which do you identify with the most, with which do you identify the least? 2. What is your own perspective on effective leadership in today’s business world? What do you think is missing in the BusinessWise debate? 3. What do you think will be the critical issues facing the business leader if he/she is to be effective in the years ahead?
The Debate Please send your answers, along with any other comments and responses on the BusinessWise Case, to the editorial team of Business Leadership Review via Mark Stoddard, Associate Editor, at [email protected] The BusinessWise case continues on the next page.
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
There was a rush of activity as everyone took their places. It was always like this before show time. Bob Wayward had worked hard to make BusinessWise the only quality talk show plugged-in to the world of international business on network television. Bob was proud of what he had achieved, and he was looking forward to the evening’s show – he knew his guests well and he was confident there would be an interesting debate. Suddenly the floor supervisor shouted "quiet!” The studio manager began his countdown, 5, 4, 3, 2, 1, and they were live on air. Bob Wayward: (to camera) "Welcome to this week's edition of BusinessWise, the programme that keeps you up to date with the international business scene. My name is Bob Wayward and on the programme tonight we have three senior managers here to talk about their own particular style of leadership First, we have Edward Ash, CEO of WorldWide Movers, the international shipping company. Mr Ash took the top job at WorldWide in the beginning of 1993 when the company was on the brink of disaster. Now just five years later, profitability has increased by almost 45% and the company is looking healthier than it has ever been in its 25-year history Next to him, we have Helmut Nowacki, CEO of Hensen Foods, the European food and beverage group. Hensen began the process of globalisation shortly after Mr. Nowacki took over 6 years ago Since then the group has more than doubled in size. With share price gains of 35% this year alone, there is little doubt that investors approve, and Hensen's expansion programme seems set to continue. Finally, we have Miss Martine Svensson, CEO and founder of Milltech, the computer software company". Miss Svensson set up the company in 1992, and today Milltech employs 250 people and is a market leader in the development of industrial engineering software. Welcome to the programme.” "Now, if I could start with you Mr. Ash, WorldWide is a company that has, like the phoenix so the speak, risen from the ashes. What would you say has been the secret to your success?" Edward Ash: "Every time I’m asked that question I think of a different answer. However, the truth is, our success is down to the dedication and professionalism of our people.” Bob: "What is it that inspires such dedication and professionalism?" Edward: "My people are passionate about their work. They deserve to be the best, they know it, and they won't accept anything less.” Bob: "That may be the position now, but it wasn't always like that. What do you think has been your contribution?" Edward: "I think that I re-awakened that passion. I set out to show our people that we could be the best, provided we believed in ourselves, and concentrated on what we were doing and why we were doing it." Bob: "Mr. Nowacki, would you agree that the secret to effective leadership is a question of stimulating a sense of self-belief in your people?"
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Helmut Nowacki: "Of course your people, your employees, are important but remember the shareholders are your people too. We mustn't forget where our priorities ultimately lie. The shareholders are the key players and the market dictates. Let's be realistic, that is the nature of business today.” Bob: "Why is it the case today, as opposed to the past? What has changed?" Helmut: "The market has changed. If a company like Hensen is to survive it must be a global player. It must have the means to meet the demands of the global customer. Without the confidence and commitment of the shareholder, I don't see how that would be possible.” Bob: "Miss Svensson?" Martine Svensson: "Well I would certainly agree with Edward, motivating your people is crucial to success. The question is, how do you do it? In my experience providing a clear and sensible direction is critical. It may sound something of a cliché, but effective leadership is about leading from the front. Yes, shareholder interests cannot be overlooked. Fortunately however, there is only one major shareholder at Milltech and that’s me. I think that how you define your priorities is a function of what strategy you intend to pursue.” Bob: "Mr. Ash, shareholder interest is the core strategic priority. Let's face it, that is, as Mr; Nowacki has underlined, the reality in today's business environment. You can't escape that! How can you hope to meet the demands of a global market without satisfying the interests of your shareholders?" Edward: "Look, its no secret that I told shareholders at our last AGM that they would not be my primary interest. Its time we faced the fact that the argument is not about shareholder vs. employee vs. supplier vs. customer, we are all stakeholders with a common interest. WorldWide Movers is a public company and I wouldn't suggest that shareholder interests are not important but, they're not the ones responsible for future growth and prosperity.” Helmut: "There I would disagree.” Bob: "Sorry Mr. Nowacki, if I could just interrupt, what exactly do you mean by stakeholders?" Edward: "By stakeholders I mean everyone who has a vested interest in the business.” Bob: "Mr Nowacki, you were going to say…?” Helmut: "Yes, this view of shareholders as not being responsible for a company's future is completely out of touch. By virtue of their position as owners of the organisation, shareholders are responsible. Bottom line is, as I've said, they provide the means to do what needs to be
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
done. They are ultimately in control. If they don't like what you're doing then they'll move their investment elsewhere. The company loses value and your hands are tied.” Bob: "Miss Svensson, have you ever considered the possibility of taking Milltech public?" Martine: "Yes I have but the prospect scares me. The important thing to me is that I can move quickly and I have the freedom to do so. Bringing in outside interests would only complicate and inhibit progress. I'm not prepared to compromise the one thing I consider most precious, that's my freedom. When I see the opportunity I want to be able to seize it I don't want to have to bow down to some unknown faces out there who know nothing about my business but think they do.” Helmut: "Both of you seem to be forgetting that today the market is global Perhaps you don't fully understand what that really means. To survive and guarantee that you're ready for the demands of the future you have to ensure you have the strength, the reach.” Bob: "Of course, Hensen Foods has grown spectacularly in the last few years, moving into both American and Asian markets.” Helmut: "That's right and our expansion programme would not have been possible without support from our shareholders.” Martine: "Yes, it seems to me that the market is a myriad of interests. Mr. Nowacki has no choice but to pander to his shareholders because Hensen's strategy demands it. But what he gains in shareholder loyalty he loses in freedom to move in whatever direction he may wish to take. As such, I would see leadership as an activity that must work on different levels and the secret to success might be different depending on the level.” Edward: "Shareholder loyalty! What does that mean? Loyalty to what? If you're suggesting that shareholders feel a sense of loyalty to your business then I think you have your head in the clouds. Shareholders are only concerned with return on investment and that's as far as it goes.” Helmut: "So what? I fail to see why you should look on that as a bad thing. As owners of the business they keep you on your toes. So what, if they're only interested in what they'll get out of it? Isn't that just part of the human condition?" Martine: "I'd like to respond to that. I'm an entrepreneur and yes, I'm in the game because I want to see a return for my efforts. In that sense I've something in common with the shareholder. But the return isn't necessarily always a financial one. More and more, shareholders want to see responsible leadership, leadership that seeks to ensure corporate action enhances the quality of life for all.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Bob: (to camera) "Leadership involves multi-level interests, employees and shareholders being the most obvious. The question is, where do you put your priorities? Let's take some calls. We have a call on line 1. What's your question caller?" Caller #1: "There has been a lot of talk of employees and shareholders. My question to the panel is, what about the customer? Forget about workers and pension funds, shouldn't the customer be your first, and only, priority?" Bob: "Miss Svensson?" Martine: "My customer is my boss and my job is to meet my customer's expectations. For Milltech the customer is the first priority. Our business is to provide solutions to problems so that our customers are better off and we are better off from having had the opportunity to help them.” Edward: "Nobody can forget that meeting customer expectations is the reason why we do what we do. I think we would all agree on that. However, speaking as a leader, I know that if I focus on the people whose job it is to see that those expectations are fulfilled, then the customer will be happy.” Bob: "The point being…?” Edward: "I know that, as a leader, if I dedicate myself to ensuring that my people have pride and passion in what they do, and have the tools to do the job, then I will have an operation that is customer-focused. As leader my customers are those people in my organisation who look to me for guidance, support and encouragement.” Bob: "Mr. Nowacki?" Helmut: "Let me begin by saying that there is a downside to stimulating a strong sense of pride in what you do. On an organisational level you can become too complacent. This has been my experience at Hensen. When I took over we were strong in a number of markets in Europe and I sensed a feeling of invincibility throughout the company. However once we realised that reality went further than our own front door, we had to accept that we were not as untouchable as we had come to believe. The second point I would like to make is that as a leader I know what needs to be done and my people are there to see that it is done. I decide and they do.” Bob: "Yes, isn't it the leader's job to ensure that the organisation doesn't become complacent by issuing orders and ensuring that those orders are carried out?" Edward: "I would agree that there can be little else more damaging than a false, or misplaced, sense of security, but I see my role as something more than just a general issuing
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
orders. After all, leaders aren't invincible. We must recognise and acknowledge the talent around us.” Bob: (to camera) "I think we have time for one more caller before we take a short break. Caller on line 2, you're through to the panel.” Caller #2: "Isn't effective leadership essentially a question of providing a sense of meaning to what the company is doing? If we accept that then effective leadership is all about communication, getting the message across?". Bob: "Miss Svensson, would you like to respond?" Martine: "Yes, I think the caller is absolutely right. Getting the message across, particularly in terms of where you are going as a company, is key. This comes back to what I said a while ago; the effective leader leads from the front. I think of myself as rather like the conductor of an orchestra, out there in front pointing the way forward.” Helmut: "That is certainly my experience at Hensen.” Edward: "I agree, the ability to point the way to the future is crucial but I would like to add that as well as clarifying direction, the leader must create a passion for the journey.” Bob: (to camera) "You're watching BusinessWise, and if you've just joined us, this week's issue for debate is ‘effective leadership, what's the secret?’ Three prominent CEOs share their views. We'll be back in a moment with more of your calls so don't go away.” ---COMMERCIAL BREAK--There was a brief pause and the floor manager shouted “clear!” It was a debate with substance, thought Bob, and he told his guests so as they reached for their glasses of water. The studio manager announced that calls were coming in steadily. Always a relief, thought Bob, you never knew whether you were going to hook the public on the issue. Now he had them and he knew he could lead them wherever he wanted. The floor manager called “time!” Then came the voice of the studio manager in his ear-piece, “5,4,3,2,1, on air.” Bob: (to camera) "Welcome back to BusinessWise, we are live in the studio with three prominent CEOs. The issue is effective leadership. I would like to ask each of you, what, in your experience has been the single most motivating factor in what you have done. In other words, what technique have you employed that has proved singularly successful? Mr. Nowacki?" Helmut: "Oh, in my case, I would say our collective ownership scheme has done more to create excitement and stimulate a sense of commitment than anything else.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Bob: "Can you explain?” Helmut: "Sure. When I took over at Hensen, I instituted a scheme whereby our people could feel they were truly owners of their organisation. We wanted our people to become shareholders themselves, so that they had more of a vested interest in the future of the company than just a monthly pay check.” Bob: "Miss Svensson?" Martine: "I'm a great believer in the old saying, variety is the spice of life. At Milltech, I try to ensure that my people are continually learning, as I am myself. Everyone has to be prepared to turn their hand to anything. I like to think of each day as a new and exciting experience and my people thrive on that philosophy. The bottom line is that there is nobody who can complain of boredom.” Bob: "And what about your experience at Worldwide, Mr. Ash?" Edward: "It’s difficult to pin-point any one technique, as I believe that ultimately effective leadership is a combination of factors. Nevertheless, I think my most successful technique has been to create a strong feeling that we are all in the same boat together. We all share a common goal and by working towards it, helping each other, we can achieve whatever we want.” Bob: "Mr; Nowacki?" Helmut: "When I took over at Hensen, it was clear that we were a small fish in a big pond. Had we continued in our complacency we wouldn't be here today. I came in and stirred things up. I made it clear what I wanted and refused to accept anything less. That is what was required and that is what I did". Bob: (to camera) "I believe we have another caller on line 2. Caller, you have a question for our guests?" Caller #3: "Yes, good evening, I'm the CEO of a small but growing service company and I can appreciate what the panel has been saying. I know that providing direction, motivation, encouragement and so forth are important, no one would dispute that. However my question is, as Miss Svensson posed earlier, how do you do it? How do you make it happen? How do you get results?" Bob: "Time for some pragmatism. Mr. Ash, how do you get people moving in the direction you want? How can you ensure that you're effective?" Edward: "You stimulate a passion among your people for what they do. Passion is a feeling and it's infectious. If you want people to feel passionate about what they do, you must be
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
passionate about it too. They must feel that. As Miss Svensson said earlier, you lead by example, you lead from the front.” Bob: "Mr. Nowacki?" Helmut: "Your people are there to do a job. Once you have the right people in the right place, they know what needs to be done and what they do is carefully managed, then you're moving in the right direction.” Edward: "Look, I'm CEO of an international shipping company because the challenge of moving goods around the world is something I find exciting. My people know that because they see me get involved.” Bob: "Miss Svensson, is that your experience at Milltech?" Martine: "Yes, being a small company, everyone is very much, ‘hands-on’. We have to be. But I think that it's easier to create a strong sense of passion if you're small. It’s a different ball game for a company like Hensen.” Bob: "Mr. Nowacki, would you describe yourself as a ‘hands-on’ leader?" Helmut: "That would depend on how you define, ‘hands-on’. If you're asking me, do I get involved with the day-to-day operations, well my answer would have to be no. I simply don't have the time. Besides, I think that that is best left to those who know what they are doing. I have to take a very broad view of the business.” Bob: "I would like to turn that question back to the caller. You mentioned that you were the CEO of a successful company, you must be doing something right. What's your experience? How do you make it happen?" Caller #3: "It's true, we've been enjoying a period of success over the last two years but we've had some hard times too. Now I am finding it difficult to keep the ball rolling. It seems to me it's easier to lead your people when your back is against the wall than when things are going well. Perhaps there is more of a challenge to the leader when the company is in difficulty. Hard times force you to be creative, because you can feel the sense of urgency.” Bob: "Interesting point, would you care to comment, Miss Svensson?" Martine: "It would seem to me that the real challenge is to keep the ball rolling. We mentioned the danger of complacency earlier and as is often the case, success does seem to breathe a sense of security. At Milltech, I find that as we go from strength to strength, I need to be more innovative in finding ways to keep my people focused. It’s much easier to run into difficulties than it is to find success and maintain it.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Helmut: "Yes, I would agree, but the caller is right by implication. The effective leader must adapt his/her style to suit the situation. Leading a company that is riding the wave, so to speak, is a different matter to trying to prevent it from drowning. The techniques we employ as leaders must reflect that.” Bob: "Mr. Ash, would you like to comment briefly?" Edward: "The ability to be creative, to be innovative, to think beyond what we think are our limitations, that's the name of the game. Nowhere is such an attitude more relevant than when the organisation has one foot in the grave and one foot on a banana skin. As leaders we must create the right environment that will sustain such an attitude.” Bob: (to camera) "Unfortunately, the clock has beaten us once again and we'll have to leave it there. It seems that the issue of effective leadership is one which can be viewed from many perspectives. What do you think? Drop us a line and give us your views But before we go, I'd like to thank our guests for taking time out of their busy schedules to give us their perspectives. I'm Bob Wayward and on behalf of the BusinessWise team, I bid you goodnight.”
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CASE STUDY
Leadership in Perspective
This case was written by Associate Professor Eoin Banahan, Managing Director, Roundrose Associates, under the supervision of Professor Pierre Casse, Dean of Berlin School for Creative Leadership. It has been prepared as a basis for class discussion and is not intended to illustrate best practice, or otherwise, in a business situation.
Business Leadership Review V:II April 2008 Page 1 of 11
www.mbaworld.com/blr © 2008 Association of MBAs
BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Background The Business Leadership Review Case Study Series is an opportunity to participate in a collective debate of key management issues, to enhance the understanding of leadership through mutual interactive learning. Readers are asked to make comments on the situation at hand and get responses to their views from the case writers. The Case Study Series is a chance to discuss key topics of leadership and management within an interactive forum. The fourth case in this series, BusinessWise, is about effective leadership. The case itself continues after these introductory comments. The Case Study Process The key to the success of the Case Study Series is interaction. Our main objective is to make this case analysis lively and rich in personal discoveries. To this end, please contribute to the process by responding with your comments and answers to the questions below. Your input and analysis will be published in the next issue of Business Leadership Review, along with responses and conclusions from the case writers, Professor Pierre Casse, and Associate Professor Eoin Banahan. The Case – A Word on Effective Leadership The latest case in this series, BusinessWise, is about reflecting on what is effective leadership in the field. It is about leadership in perspective. The case explores three different perspectives of effective leadership and how three corporate leaders view their respective roles. It is clear from the discussion that there are different ways to view the leadership role and how you approach it depends upon the situation in which you find yourself. Whilst this may be obvious, perhaps it is worth considering if indeed we can underline some critical key elements to effective leadership in today’s turbulent business world. What do you think? What is your experience? What is your perspective?
Business Leadership Review V:II April 2008 Page 2 of 11
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
The Questions In order to facilitate the debate we challenge the reader with the following questions: Read the case study BusinessWise and answer the following 3 questions: 1. What do you think of the three different views of effective leadership presented in the case? Which do you identify with the most, with which do you identify the least? 2. What is your own perspective on effective leadership in today’s business world? What do you think is missing in the BusinessWise debate? 3. What do you think will be the critical issues facing the business leader if he/she is to be effective in the years ahead?
The Debate Please send your answers, along with any other comments and responses on the BusinessWise Case, to the editorial team of Business Leadership Review via Mark Stoddard, Associate Editor, at [email protected] The BusinessWise case continues on the next page.
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
There was a rush of activity as everyone took their places. It was always like this before show time. Bob Wayward had worked hard to make BusinessWise the only quality talk show plugged-in to the world of international business on network television. Bob was proud of what he had achieved, and he was looking forward to the evening’s show – he knew his guests well and he was confident there would be an interesting debate. Suddenly the floor supervisor shouted "quiet!” The studio manager began his countdown, 5, 4, 3, 2, 1, and they were live on air. Bob Wayward: (to camera) "Welcome to this week's edition of BusinessWise, the programme that keeps you up to date with the international business scene. My name is Bob Wayward and on the programme tonight we have three senior managers here to talk about their own particular style of leadership First, we have Edward Ash, CEO of WorldWide Movers, the international shipping company. Mr Ash took the top job at WorldWide in the beginning of 1993 when the company was on the brink of disaster. Now just five years later, profitability has increased by almost 45% and the company is looking healthier than it has ever been in its 25-year history Next to him, we have Helmut Nowacki, CEO of Hensen Foods, the European food and beverage group. Hensen began the process of globalisation shortly after Mr. Nowacki took over 6 years ago Since then the group has more than doubled in size. With share price gains of 35% this year alone, there is little doubt that investors approve, and Hensen's expansion programme seems set to continue. Finally, we have Miss Martine Svensson, CEO and founder of Milltech, the computer software company". Miss Svensson set up the company in 1992, and today Milltech employs 250 people and is a market leader in the development of industrial engineering software. Welcome to the programme.” "Now, if I could start with you Mr. Ash, WorldWide is a company that has, like the phoenix so the speak, risen from the ashes. What would you say has been the secret to your success?" Edward Ash: "Every time I’m asked that question I think of a different answer. However, the truth is, our success is down to the dedication and professionalism of our people.” Bob: "What is it that inspires such dedication and professionalism?" Edward: "My people are passionate about their work. They deserve to be the best, they know it, and they won't accept anything less.” Bob: "That may be the position now, but it wasn't always like that. What do you think has been your contribution?" Edward: "I think that I re-awakened that passion. I set out to show our people that we could be the best, provided we believed in ourselves, and concentrated on what we were doing and why we were doing it." Bob: "Mr. Nowacki, would you agree that the secret to effective leadership is a question of stimulating a sense of self-belief in your people?"
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Helmut Nowacki: "Of course your people, your employees, are important but remember the shareholders are your people too. We mustn't forget where our priorities ultimately lie. The shareholders are the key players and the market dictates. Let's be realistic, that is the nature of business today.” Bob: "Why is it the case today, as opposed to the past? What has changed?" Helmut: "The market has changed. If a company like Hensen is to survive it must be a global player. It must have the means to meet the demands of the global customer. Without the confidence and commitment of the shareholder, I don't see how that would be possible.” Bob: "Miss Svensson?" Martine Svensson: "Well I would certainly agree with Edward, motivating your people is crucial to success. The question is, how do you do it? In my experience providing a clear and sensible direction is critical. It may sound something of a cliché, but effective leadership is about leading from the front. Yes, shareholder interests cannot be overlooked. Fortunately however, there is only one major shareholder at Milltech and that’s me. I think that how you define your priorities is a function of what strategy you intend to pursue.” Bob: "Mr. Ash, shareholder interest is the core strategic priority. Let's face it, that is, as Mr; Nowacki has underlined, the reality in today's business environment. You can't escape that! How can you hope to meet the demands of a global market without satisfying the interests of your shareholders?" Edward: "Look, its no secret that I told shareholders at our last AGM that they would not be my primary interest. Its time we faced the fact that the argument is not about shareholder vs. employee vs. supplier vs. customer, we are all stakeholders with a common interest. WorldWide Movers is a public company and I wouldn't suggest that shareholder interests are not important but, they're not the ones responsible for future growth and prosperity.” Helmut: "There I would disagree.” Bob: "Sorry Mr. Nowacki, if I could just interrupt, what exactly do you mean by stakeholders?" Edward: "By stakeholders I mean everyone who has a vested interest in the business.” Bob: "Mr Nowacki, you were going to say…?” Helmut: "Yes, this view of shareholders as not being responsible for a company's future is completely out of touch. By virtue of their position as owners of the organisation, shareholders are responsible. Bottom line is, as I've said, they provide the means to do what needs to be
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
done. They are ultimately in control. If they don't like what you're doing then they'll move their investment elsewhere. The company loses value and your hands are tied.” Bob: "Miss Svensson, have you ever considered the possibility of taking Milltech public?" Martine: "Yes I have but the prospect scares me. The important thing to me is that I can move quickly and I have the freedom to do so. Bringing in outside interests would only complicate and inhibit progress. I'm not prepared to compromise the one thing I consider most precious, that's my freedom. When I see the opportunity I want to be able to seize it I don't want to have to bow down to some unknown faces out there who know nothing about my business but think they do.” Helmut: "Both of you seem to be forgetting that today the market is global Perhaps you don't fully understand what that really means. To survive and guarantee that you're ready for the demands of the future you have to ensure you have the strength, the reach.” Bob: "Of course, Hensen Foods has grown spectacularly in the last few years, moving into both American and Asian markets.” Helmut: "That's right and our expansion programme would not have been possible without support from our shareholders.” Martine: "Yes, it seems to me that the market is a myriad of interests. Mr. Nowacki has no choice but to pander to his shareholders because Hensen's strategy demands it. But what he gains in shareholder loyalty he loses in freedom to move in whatever direction he may wish to take. As such, I would see leadership as an activity that must work on different levels and the secret to success might be different depending on the level.” Edward: "Shareholder loyalty! What does that mean? Loyalty to what? If you're suggesting that shareholders feel a sense of loyalty to your business then I think you have your head in the clouds. Shareholders are only concerned with return on investment and that's as far as it goes.” Helmut: "So what? I fail to see why you should look on that as a bad thing. As owners of the business they keep you on your toes. So what, if they're only interested in what they'll get out of it? Isn't that just part of the human condition?" Martine: "I'd like to respond to that. I'm an entrepreneur and yes, I'm in the game because I want to see a return for my efforts. In that sense I've something in common with the shareholder. But the return isn't necessarily always a financial one. More and more, shareholders want to see responsible leadership, leadership that seeks to ensure corporate action enhances the quality of life for all.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Bob: (to camera) "Leadership involves multi-level interests, employees and shareholders being the most obvious. The question is, where do you put your priorities? Let's take some calls. We have a call on line 1. What's your question caller?" Caller #1: "There has been a lot of talk of employees and shareholders. My question to the panel is, what about the customer? Forget about workers and pension funds, shouldn't the customer be your first, and only, priority?" Bob: "Miss Svensson?" Martine: "My customer is my boss and my job is to meet my customer's expectations. For Milltech the customer is the first priority. Our business is to provide solutions to problems so that our customers are better off and we are better off from having had the opportunity to help them.” Edward: "Nobody can forget that meeting customer expectations is the reason why we do what we do. I think we would all agree on that. However, speaking as a leader, I know that if I focus on the people whose job it is to see that those expectations are fulfilled, then the customer will be happy.” Bob: "The point being…?” Edward: "I know that, as a leader, if I dedicate myself to ensuring that my people have pride and passion in what they do, and have the tools to do the job, then I will have an operation that is customer-focused. As leader my customers are those people in my organisation who look to me for guidance, support and encouragement.” Bob: "Mr. Nowacki?" Helmut: "Let me begin by saying that there is a downside to stimulating a strong sense of pride in what you do. On an organisational level you can become too complacent. This has been my experience at Hensen. When I took over we were strong in a number of markets in Europe and I sensed a feeling of invincibility throughout the company. However once we realised that reality went further than our own front door, we had to accept that we were not as untouchable as we had come to believe. The second point I would like to make is that as a leader I know what needs to be done and my people are there to see that it is done. I decide and they do.” Bob: "Yes, isn't it the leader's job to ensure that the organisation doesn't become complacent by issuing orders and ensuring that those orders are carried out?" Edward: "I would agree that there can be little else more damaging than a false, or misplaced, sense of security, but I see my role as something more than just a general issuing
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
orders. After all, leaders aren't invincible. We must recognise and acknowledge the talent around us.” Bob: (to camera) "I think we have time for one more caller before we take a short break. Caller on line 2, you're through to the panel.” Caller #2: "Isn't effective leadership essentially a question of providing a sense of meaning to what the company is doing? If we accept that then effective leadership is all about communication, getting the message across?". Bob: "Miss Svensson, would you like to respond?" Martine: "Yes, I think the caller is absolutely right. Getting the message across, particularly in terms of where you are going as a company, is key. This comes back to what I said a while ago; the effective leader leads from the front. I think of myself as rather like the conductor of an orchestra, out there in front pointing the way forward.” Helmut: "That is certainly my experience at Hensen.” Edward: "I agree, the ability to point the way to the future is crucial but I would like to add that as well as clarifying direction, the leader must create a passion for the journey.” Bob: (to camera) "You're watching BusinessWise, and if you've just joined us, this week's issue for debate is ‘effective leadership, what's the secret?’ Three prominent CEOs share their views. We'll be back in a moment with more of your calls so don't go away.” ---COMMERCIAL BREAK--There was a brief pause and the floor manager shouted “clear!” It was a debate with substance, thought Bob, and he told his guests so as they reached for their glasses of water. The studio manager announced that calls were coming in steadily. Always a relief, thought Bob, you never knew whether you were going to hook the public on the issue. Now he had them and he knew he could lead them wherever he wanted. The floor manager called “time!” Then came the voice of the studio manager in his ear-piece, “5,4,3,2,1, on air.” Bob: (to camera) "Welcome back to BusinessWise, we are live in the studio with three prominent CEOs. The issue is effective leadership. I would like to ask each of you, what, in your experience has been the single most motivating factor in what you have done. In other words, what technique have you employed that has proved singularly successful? Mr. Nowacki?" Helmut: "Oh, in my case, I would say our collective ownership scheme has done more to create excitement and stimulate a sense of commitment than anything else.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Bob: "Can you explain?” Helmut: "Sure. When I took over at Hensen, I instituted a scheme whereby our people could feel they were truly owners of their organisation. We wanted our people to become shareholders themselves, so that they had more of a vested interest in the future of the company than just a monthly pay check.” Bob: "Miss Svensson?" Martine: "I'm a great believer in the old saying, variety is the spice of life. At Milltech, I try to ensure that my people are continually learning, as I am myself. Everyone has to be prepared to turn their hand to anything. I like to think of each day as a new and exciting experience and my people thrive on that philosophy. The bottom line is that there is nobody who can complain of boredom.” Bob: "And what about your experience at Worldwide, Mr. Ash?" Edward: "It’s difficult to pin-point any one technique, as I believe that ultimately effective leadership is a combination of factors. Nevertheless, I think my most successful technique has been to create a strong feeling that we are all in the same boat together. We all share a common goal and by working towards it, helping each other, we can achieve whatever we want.” Bob: "Mr; Nowacki?" Helmut: "When I took over at Hensen, it was clear that we were a small fish in a big pond. Had we continued in our complacency we wouldn't be here today. I came in and stirred things up. I made it clear what I wanted and refused to accept anything less. That is what was required and that is what I did". Bob: (to camera) "I believe we have another caller on line 2. Caller, you have a question for our guests?" Caller #3: "Yes, good evening, I'm the CEO of a small but growing service company and I can appreciate what the panel has been saying. I know that providing direction, motivation, encouragement and so forth are important, no one would dispute that. However my question is, as Miss Svensson posed earlier, how do you do it? How do you make it happen? How do you get results?" Bob: "Time for some pragmatism. Mr. Ash, how do you get people moving in the direction you want? How can you ensure that you're effective?" Edward: "You stimulate a passion among your people for what they do. Passion is a feeling and it's infectious. If you want people to feel passionate about what they do, you must be
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
passionate about it too. They must feel that. As Miss Svensson said earlier, you lead by example, you lead from the front.” Bob: "Mr. Nowacki?" Helmut: "Your people are there to do a job. Once you have the right people in the right place, they know what needs to be done and what they do is carefully managed, then you're moving in the right direction.” Edward: "Look, I'm CEO of an international shipping company because the challenge of moving goods around the world is something I find exciting. My people know that because they see me get involved.” Bob: "Miss Svensson, is that your experience at Milltech?" Martine: "Yes, being a small company, everyone is very much, ‘hands-on’. We have to be. But I think that it's easier to create a strong sense of passion if you're small. It’s a different ball game for a company like Hensen.” Bob: "Mr. Nowacki, would you describe yourself as a ‘hands-on’ leader?" Helmut: "That would depend on how you define, ‘hands-on’. If you're asking me, do I get involved with the day-to-day operations, well my answer would have to be no. I simply don't have the time. Besides, I think that that is best left to those who know what they are doing. I have to take a very broad view of the business.” Bob: "I would like to turn that question back to the caller. You mentioned that you were the CEO of a successful company, you must be doing something right. What's your experience? How do you make it happen?" Caller #3: "It's true, we've been enjoying a period of success over the last two years but we've had some hard times too. Now I am finding it difficult to keep the ball rolling. It seems to me it's easier to lead your people when your back is against the wall than when things are going well. Perhaps there is more of a challenge to the leader when the company is in difficulty. Hard times force you to be creative, because you can feel the sense of urgency.” Bob: "Interesting point, would you care to comment, Miss Svensson?" Martine: "It would seem to me that the real challenge is to keep the ball rolling. We mentioned the danger of complacency earlier and as is often the case, success does seem to breathe a sense of security. At Milltech, I find that as we go from strength to strength, I need to be more innovative in finding ways to keep my people focused. It’s much easier to run into difficulties than it is to find success and maintain it.”
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BusinessWise: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Professor Pierre Casse, Berlin School of Creative Leadership
Helmut: "Yes, I would agree, but the caller is right by implication. The effective leader must adapt his/her style to suit the situation. Leading a company that is riding the wave, so to speak, is a different matter to trying to prevent it from drowning. The techniques we employ as leaders must reflect that.” Bob: "Mr. Ash, would you like to comment briefly?" Edward: "The ability to be creative, to be innovative, to think beyond what we think are our limitations, that's the name of the game. Nowhere is such an attitude more relevant than when the organisation has one foot in the grave and one foot on a banana skin. As leaders we must create the right environment that will sustain such an attitude.” Bob: (to camera) "Unfortunately, the clock has beaten us once again and we'll have to leave it there. It seems that the issue of effective leadership is one which can be viewed from many perspectives. What do you think? Drop us a line and give us your views But before we go, I'd like to thank our guests for taking time out of their busy schedules to give us their perspectives. I'm Bob Wayward and on behalf of the BusinessWise team, I bid you goodnight.”
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