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strategy and business
 / Spring 2003 / Issue 30(originally published by Booz & Company)


Noel M. Tichy: The Thought Leader Interview

S+B: Presumably, that’s more necessary now than ever, for in a world of managed alliances and services provision, one needs to learn to lead people over whom one has no authority. You’d argue that that happens through teaching/learning?

TICHY: Absolutely.

S+B: You say it’s important to build teaching into various corporate processes, for strategy and for operations, for example. Can you explain?

TICHY: There are three processes every company has to have: Somehow you’ve got to set strategies; you’ve got to have a budget, so you need an annual operating plan; and somehow you’ve got to do succession and people planning. All these can be done by the entrepreneur in his head, or they could be very formal processes. But there is a process, and left to their own devices, every one of these processes tends to become quite bureaucratic.

So I say, look at the process as a flow. There’s preparation, face-to-face, and follow-up. If things break in the preparation phase, I don’t know how you’re going to fix it afterward, when you go face-to-face to make decisions and do follow-ups. Or you could have a great prep phase: Your department got all pumped up; you have great plans, and then you go and meet with the CEO. He hasn’t done his homework. He gives you a hard time. The meeting is defensive. So next year you say, “Why bother with all that again?” and you put the thing on the shelf. So it’s very important to get people to make these processes really interactive, where there is teaching and learning going on by both the leader and the team.

S+B: Welch did a process change like that at GE.

TICHY: With the Corporate Executive Committee, the CEC. What he inherited was a monthly show-and-tell where everyone was defensive. U-shaped table, 35mm slides. You couldn’t care less about the other guy. You couldn’t wait to get out. Nobody was learning anything. Welch was constantly experimenting with the CEC to make the process and results better. Get them out of the physical setting of headquarters. Go to Crotonville. Roll up your sleeves. You had to spend the night. If you were caught going home at night — no, no, no, even if you lived 10 minutes away. Why? He wanted you to socialize, be at the bar, sharing ideas.

S+B: How else can you make strategy and planning processes interactive?

TICHY: One of the best practices I saw was introduced by Gary Wendt when he was head of GE Capital. He had this insight that by the time people came in to give their strategy review, it was a defensive meeting. They had worked for two months, so by the time they came to him for the presentation, all they wanted to do was sell him on the results. He couldn’t add a hell of a lot of value. So he changed his calendar and committed to 29 days, a couple of months ahead of the final face-to-face, to go to each business unit for a half-day or a full-day meeting — the top team, no presentation, no flip charts, let’s brainstorm. That gave executives time to rethink their paradigms.

There are all sorts of ways a leader can foster interactive teaching and learning if he starts thinking, Where do I socially architect myself? Like Larry Bossidy and the follow-up letters he writes to his senior people after meetings. Think about what that does. That’s a contract. And it’s not some staff weenie doing it. It is a personal contract between the CEO and an executive, in very down-to-earth language.

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