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Friday, June 26, 2009

Response to Sibley's "Trust Us On This", The Ottawa Citizen, April 11, 2009

Recently, the Ottawa Citizen ran a column entitled “Trust us on this” (1) written by Robert Sibley with assistance from David Mitchell of the Public Policy Forum. I was very appreciative that they raised the issue of an overall, system-wide lack of trust that has emerged as a distinguishing and worrisome feature of today’s economic recession. They suggested that in going into this recession, the leaders of today’s private, public and not-for-profit organizations do not enjoy the same degree of public confidence that leaders have in the past, making the climb out of this recession likely to be that much more difficult. However, in attempting to map a way forward, their analysis got it wrong.

Just think, for instance, of the shocks that have been faced almost simultaneously by the citizens of Detroit who have been devastated by the dual bankruptcies of GM and Chrysler, were sent reeling from the perjury and sex scandal that saw its mayor removed from office, and then lurching from the collapse of the city’s Board of Education. But for the grace of God go we …! There, as elsewhere, leadership confidence, already at record low levels, is being battered daily.

To whom, therefore, should citizens turn with an expectation that their trust will be rewarded? Sibley suggests that without this underlying confidence, any economic improvement will remain fragile -- at risk from even the smallest hint of insecurity.

But, while I agree this is an important issue, I do not believe trust is the basic problem – it is merely a side effect of a deeper dilemma. As I see it, the problem is our society’s misplaced and deeply ingrained assumption that someone must be ‘in-charge’.

It is an assumption that even corporate icons today are beginning to challenge, as Jeffrey Immelt did recently when he commented to the Financial Times on the success of his predecessor, Jack Welch, as CEO of General Electric in the 1990s. Immelt said that, “anyone could have run GE and done well in the 1990s. A dog could have run GE.”(2) Why? Because there were so many good people in the middle of the organization that did the job of running and coordinating the company for him. Being in-charge was irrelevant. It was a figurehead position. A decade later the coordination challenge is even greater and the CEO even less in control. Again as Immelt sees it, “the most important thing is context. It’s how your company fits into the world and how you respond to it.” How does a CEO of a single organization hope to coordinate with the whole world?

This someone must be in-charge assumption proliferates throughout our public, private and civic institutions. It is a cornerstone of our management mythology that periodically a white knight swoops in to restructure and set right the great ship of organization. The current crisis of confidence challenges that view because it exposes the lack of influence that CEOs actually have. Concern arises not from what we know leaders actually did or did not do but from the difference between a) our over inflated expectations of them that were fuelled by their own hyped sense of importance; and b) our perceptions of their performance -- between what they promised to deliver and what we see them providing. Confidence is low because this organizational performance gap is large, regardless of the influence leaders may really have on that performance (3).

When things went well, as they did over the last decade, our leaders were quick to point out the impact of their wisdom and decisiveness. Now as fortunes fall, the chorus of leaders has changed its tune, suddenly claiming it’s not them but the system that’s been responsible all along. Having previously been persuaded of their crucial importance, we are now confronted with an overwhelming organizational performance gap (4). They were in-charge and so they must be responsible.

But today’s recession is the consequence of multiple policy and market decisions made in many places, many of which were well meaning in their intent. When combined, however, they created a house of cards which eventually collapsed last fall in a global cascade. It may be argued that these unintended consequences were beyond the ability of any individual leader to control so one should be cautious about falling prey to a leadership blame game. Yet if they didn’t get us into the mess are they equally incapable of leading us out? Consequently, we should give ourselves pause to question not just these contradictory claims of individual leaders but also the assumptions and systems under which they have operated.

“Large corporations are vast and complex entities, with customs and attitudes that are hard for any one leader to change. So why do we talk as if the CEOs are truly in charge... ”(5) The cycle of leadership mistrust ends, not by whitewashing our faith in leaders as Sibley suggests, but in evolving a more mature confidence in ourselves as the principal actors in our own lives and organizations. Without enlivening this sense of shared ownership, good stewardship will remain elusive, and we will fail to make the collective commitments necessary to close the gap between our expectations of our organizations and the shared outcomes we observe.

1. Sibley, Robert. “Trust us on this”, The Ottawa Citizen, April 11, 2009
2. Guerrera, Francesco. “A need to reconnect”, Financial Times, New York, March 12, 2009
3. A study of "superstar CEOs", for instance, found that companies run by top executives who won awards from the business press between 1975 and 2002 consistently underperformed the market after their honor. Fox, Justin. “Are Today’s CEOs batting a Thousand?, Fortune, October 20, 2006a
4. Collingwood, Harris. “Do CEOs Matter?”, The Atlantic, June 2009: 54-60
5. Fox, Justin. “The Limited (but real) Impact of CEOs”, Time Magazine, October 20 2006b, accessed at http://curiouscapitalist.blogs.time.com/2006/10/20/the_limited_but_real_impact_of/