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Published: August 24, 2010
 / Autumn 2010 / Issue 60

 
 

Getting Tensions Right

When the team members realized that Classon was engaging them in a new kind of inquiry — based on his belief that the relationships at the top had sufficient trust and respect to tolerate and even embrace dissent — a lot of new thinking came forward. In the end, the team concluded that the deal would probably work from a financial perspective, but that it wasn’t as good a fit strategically as many had thought. They decided to pass. Six months later, a much better acquisition opportunity came along, and the team had the resources, the time, and the mutual trust to act. The resulting acquisition took the company to another level.

In orchestrating this right fight, Classon had one important thing going for him: a strong foundation of alignment on which to build success. Another CEO, Douglas Conant, had no such foundation when he took the chief executive role at Campbell Soup Company in 2001. Throughout the previous decade, in the pursuit of higher margins, the prior management team had systematically cheapened the company’s products while raising their prices. They’d even taken the chicken out of their chicken soup. Without a common view of what the organization was trying to accomplish, the leadership had become consumed with conflicting priorities and infighting, blaming one another for the financial mess they were in. The once revered American brand had lost its way and become the poorest-performing major food company in the world.

Conant faced each of the three performance tensions — in spades. But he was in no position to tackle them right away. He first had to build a foundation of alignment. So in his first 90 days, he worked with the leadership team to create a values statement, an “employees matter” promise, and a mission statement that defined Campbell’s purpose as “nourishing people’s lives everywhere, every day.” Fixing the company’s performance was important, but the mission had to come first.

At the same time, Conant knew he had to re-energize the organization and make it more innovative — and efficient. He started at the top, rearranging the hierarchy into a matrix to provide team members with broader lines of sight to facts (avoiding silos), and requiring them to “own” more than one perspective. This new structure encouraged senior leaders to produce visions and plans that affected more than just their own departments. It provided a foundation for Conant to build Campbell’s ability to take on right fights and fight them right.

Conant was candid about Campbell’s problems, telling his team that the company couldn’t “talk its way out of a situation it had behaved its way into.” He promised consistent, well-measured improvement, year over year. Slowly but surely, his focus on the future began to work. Pricing came into line. Product quality improved. The innovation pipeline became full again.

By the end of 2008, Campbell’s was ranked in the top 10 percent of food companies in financial performance and in the top quartile of Fortune 500 companies in employee morale.

By starting with building sufficient alignment on vision, mission, goals, and facts, and then structuring a way forward that made the lines of tension visible and safe, Conant stopped all the fighting about things that didn’t really matter and turned his team’s attention to fighting really well about the few critical things that did.

Becoming Productively Tense

Many boards and top teams have too little good tension in them; they fear that open dissent and disagreement will undermine their collective effectiveness. Many others have too much bad tension in them; the members are too focused on their individual results, power, and stature to attend to the tensions that really matter (profitability versus growth, the short term versus the long term, and the collective whole versus its individual parts). Both dynamics are dysfunctional and ultimately undermine a company’s ability to realize its full potential.

 
 
 
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