Magazine

Fear of Flip-Flopping


Jack and Suzy Welch argue that leaders are actually supposed to change their minds when the wind shifts

As a Vietnam vet, I can't see an end to the conflict in Afghanistan or the debt that will result. Am I being pessimistic? —Jerry Helmert, Bristol, Wis.

We too are perplexed by President Obama's recent executive order to escalate operations in Afghanistan with the addition of 17,000 troops. If the history of that country has taught us anything, it's that conventional warfare doesn't work very well, to put it mildly, against the guerrilla-style "freedom fighters" defending its unknowable terrain. That's why we hope the President will reevaluate his position in the weeks ahead. And as he does, we hope, too, that he doesn't fall prey to a dynamic that afflicts virtually every leader who has ever stood up to make a bold and defining strategy pronouncement, as he did with Afghanistan on the campaign trail: Call it fear of flip-flopping.

Now, it's hard to know exactly when flip-flopping first became a dirty word in the leadership lexicon. But in recent years it has been the epithet of choice against political candidates on both sides of the fence, seriously damaging the campaigns, for instance, of John Kerry and Mitt Romney. In those cases, critics made it sound as if revising a stance is some kind of a moral failing.

What nonsense. It is the essence of leadership to have the self-confidence to admit that a strategy has gone off course or a position has become outdated. And it is the responsibility of all leaders in such a "predicament" to revise their direction swiftly, widely communicate it, and move on without undue pandering or emotionality.

Change happens. And so a leader's mind set must change, too—in particular, under two broad circumstances.

But before we describe those circumstances, a quick caveat. We're obviously talking here about "revisionism" within limits. There's almost nothing more frustrating than a manager who changes his opinion according to the views of the last person to leave his office. Just as bad are leaders who change their views depending on their audience, rolling out differing sets of talking points for the press, analysts, and employees. That's nothing but weakness, which enervates the organization and soon catches up with any leader who indulges in it.

No, we're talking about appropriate flexibility—the kind that legitimately occurs when a leader gets his perspective upended by new insights, or when the environment gets upended by unanticipated conditions.

For an example of the first circumstance, consider what happened at GE in the 1990s. For more than a decade, the company had a prominent imperative that every product or service be first or second in its market, or its managers needed to "fix, close, or sell" the business. Then a group of managers had a eureka moment at a leadership course. The No.1 or 2 strategy, they said, wasn't necessarily encouraging GE businesses to grow. More often, it was impelling them to define their markets more narrowly. They weren't saying, "We're No.1 in Product X." They were saying, "We're No.1 in Product X—with one particular feature." So in many of those narrower categories, they were able to boost market share into the 40% range.

Almost immediately, GE's leadership team changed the No.1 or 2 imperative to reflect its new perspective. Every business had to redefine its markets in such a way that its share was initially no more than 10%, a move that didn't change the rank of most GE units. The point was to open managers' eyes to opportunities in adjacent markets. And growth rates shot up as result.

As for the second circumstance—an upended competitive environment—we're living it. Today's marketplace is changing so fast that any leader still clinging to a "defining" strategy needs a kick in the pants, especially if that strategy is based on pricey brand exclusivity. Howard Schultz, the CEO of Starbucks, is right when he says the company must reinvent itself with items like low-cost instant coffee and value meals. Granted, the move may muddy its high-end image, but given the realities of consumer spending, it's the right mind set for these times.

Now, we'll admit that ending up talking about Starbucks in a column that started with the President and Afghanistan might seem like quite a stretch. But the underlying point we wanted to make is the same. For every kind of leader, the apparent perils of the flip-flop label can loom large. In the right circumstances, changing your mind is change you can believe in.

Jack and Suzy Welch look forward to your questions. You can e-mail them and view their new website at www.welchway.com For their podcast, go to www.businessweek.com/search/podcasting.htm.

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