Strong caveat to new management
First, do no harm!
By Michael Feuer
September 2008
Hippocrates, the father of
medicine, also knew a
thing or two about business. In the fourth century B.C.,
he crafted the Hippocratic oath.
Extracted from this sage pledge
came the dictum, “First, do no
harm.” Even after more than
2,000 years, this oath could be
appropriately adopted today by
corporate titans. Every day,
companies are bought and sold
from around the corner to
across the world. Organizations
of all types undergo management and leadership changes —
sometimes as frequently as athletes change their socks.
Many times, changes are necessitated by poor performance or
new ownership. The “out with
the old, in with the new” actions
during transitions are frequently
required and appropriate.
However, too frequently, ill-conceived changes can
cause a negative domino
effect. Before anyone realizes it, the cure becomes
worse than the malady.
New leader, new worries
As the ink is still drying on a
new leader’s contract, almost
instant promulgations are
made that the new kahuna
has brought in his or her own
team, frequently including the
head operator, marketing strategist and financial guru. The precipitous action of throwing the
baby out with the bathwater
can include key people who
have the critical “institutional”
knowledge of why this or that
works or, equally important,
why something won’t.
Often the first shoe to drop is
only the beginning. The usual
scenario is that the other executives who come in with
the new leader proceed with great dispatch bringing in their
own people, further upsetting a
fragile apple cart. This exponential process many times causes
turmoil and costly business disruptions before anyone realizes
the organization is at risk and
the troops are not only restless
but also operating in fear mode.
Things stop getting done, sales
suffer and customers become
unhappy because after these
radical changes in personnel
nobody knows who’s on first
and who does what under the
new leadership. It’s not uncommon for the old team members
who stay on to be treated like
redheaded stepchildren.
Changes at the top are typically initiated because the former
leader simply couldn’t get the
job done. Most rational business people have no quarrel
with this. This doesn’t mean the
people below the old boss are
all bad. In fact, they actually
may be very good and understand the intricacies of the business, but because of poor leadership, they couldn’t function
effectively or their creativity
was stymied. However, if the
new CEO takes the Hippocratic
oath, a great deal of suffering
can be avoided.
Wait a minute
Perhaps there is a better way,
including enforcing a moratorium on wholesale personnel
changes for a specific period of
time and certainly at least until
the dust settles and a thorough
evaluation of existing people
and processes is completed.
The best of the best buyout
companies have a meticulous
review and integration process
that is launched after an acquisition. This process not only
assesses skills but also incorporates sensitivity because new
management/owners know
they are messing with a lot of
people’s lives. When changes do
begin, they are done professionally, providing dignity to the
departed.
Leadership must recognize
that during a transition all parties, particularly the employees
and the customers, are watching. Indiscriminate changes will
long be remembered, and when
the employee who does stay
receives a new offer a month or
a year down the road, he or she
will not have forgotten how the
company treated its “loyal people” during the change process.
Customers, too, have their
favorite people in a company,
and most times, they are the
lower-level support types who
are most likely unknown to the
CEO. When the time comes, the
customer will also vividly recall
how the company behaved and
treated its customers and
employees during the transition.
To avoid the unnecessary rush
to judgment of an existing team
member, process or strategy, new
management must stop, look,
listen and learn before acting.
Speed certainly counts but not
as much as aiming before firing.
When the time comes, as it
usually does, for a management
transition in your organization,
gather your top people together
and have them raise their right
hands and repeat after you: “No
matter what changes we make,
our primary consideration must
be to first, do no harm.”
MICHAEL FEUER co-founded OfficeMax in 1988 with a friend and partner. Starting with one store during a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide, with annual
sales approximating $5 billion before selling this retail giant for almost $1.5 billion in 2003 to Boise
Cascade Corp. Feuer immediately launched another start-up, Max-Ventures, a retail/consumer products
venture capital operating and consulting firm headquartered in suburban Cleveland, Ohio. Feuer serves
on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and
building entrepreneurial enterprises. Reach him with comments at mfeuer@max-ventures.com.
