Can Good Leaders Be Good Everywhere?

Richard Branson’s latest book, Business Stripped Bare (Random, 2008) is, like Losing My Virginity, an absolute cracker.  For business leaders and entrepreneurs, it provides some marvellous examples of entrepreneurial success and failure as well as a great deal of food for thought.

It is thanks to global business leaders like Richard Branson that we can drill down into the roller coaster world of the global entrepreneur.  It is also thanks to Branson that we can see how business leadership can be infused with a sense of humour, a truck-load of passion, and a focus on working backwards from the real needs of the customer.

The Virgin empire extends from planes and trains to credit cards and mobile phones.  It has successfully diversified in an era in which diversification was viewed as a strategy of last resort.  Despite growing to become one of the globe’s biggest companies, Virgin’s corporate culture retains the energy and dynamism of its founder.

One of Branson’s most powerful insights is that even the most complex of businesses should be reducible to a simple understanding of its key elements.  If, like the failed dot coms of the last decade, it remains complex and impossible to understand, it is thus either shrouded in the mists of jargon and technocrap, and thus ripe for a new entrant or, at its core, is fundamentally flawed.

On this basis, none of us should be scared about learning the ins and outs of a new industry, winnowing our deepening understanding into a progressive search for new business opportunities.  Branson records, for instance, that he learnt the basics of running a new airline in just four months,

Four months to learn how to deliver an airline.  Not easy.  But definitely doable.  Those business leaders who seek, in interviews and in their writings, to turn their industries into complex puzzles…these people really, really annoy me…To listen to them, you’d think you must be born into an industry to make any headway in it.  And this is rarely true unless you are truffle hunting…The volume of information you’ll need to hack through will be high…but the underlying business model is always fairly simple.

For entrepreneurs, this is great news.  With hard work, you should be able to understand the mechanics of an industry and detect who is doing well and who isn’t.  Poorly or unmet customer needs will often arise as you undertake your homework.  Opportunities to establish a start-up, buy an existing player, or form an alliance may well appear.  Alternatively, you may conclude that the returns of pretty much everyone in the industry do not justify your further efforts and capital.  If so, nothing dramatic has been lost.

For business leaders and executives, however, I think that we need to take care in applying the Branson philosophy across the board.  Consider the Coles Supermarket brand in Australia, for example.  Coles has long sought to match its major competitor, Woolworths, in its offerings, customer service, and brand image, but has yet to succeed.  Recently, it was purchased by Australia’s Virgin-equivalent, the diversified Wesfarmers Group, however it has not shown any serious signs of improvement.  Prior to the Wesfarmers takeover, it had given a high-profile and highly-respected business leader, John Fletcher, the time and resources to bring it back to health.  Fletcher, however, could not sufficiently improve an extremely tired corporate culture and declining brand.

In the global context, consider too the business career of “Chainsaw Al” Dunlap, who rode on the coat tails of a slash-and-burn philosophy that had appeared successful at Sunbeam in the United States and at Kerry Packer’s Australian Consolidated Press.  Appointed to save the languishing paper products giant Scott Paper, however, he failed miserably. 

The lesson for executives is that we must seek to match strength to context.  If a leader’s philosophy and style do not align with the array of variables together contributing to outstanding outcomes, all may be lost.  Some of these variables, such as the global and national economic environment, the support of one’s board, and the availability of key personalities to complement and support the leader’s approach, may be wholly or partially outside one’s control.  At times, an organisation’s decline may be terminal, impervious to whatever the leader tries.  Just this week, the giftware firm Wedgewood, as old as industrial life itself, sputtered to an end for this very reason.

So, while the critical ingredients for great leadership may be true everywhere – commitment, passion, ethics, and so on – these may be necessary but not sufficient ingredients for great leadership outcomes in specific situations.  What is missing?  Being in the right place at the right time and, perhaps, a dollop of luck.  Hardly the things that can be taught in MBA schools, but the reality of the messiness, and excitment, that is organisational life.