How many times have you heard about CEOs who espouse the theory that, in the larger scheme of things, seemingly smaller issues are not worthy of a Big Kahuna’s attention? Put another way, these top dogs keep telling themselves they don’t want to lose sight of the forest for the trees.
This concept of managing from 50,000 feet seems logical when times are good and sales cover a multitude of sins. However, history has proven that this type of detachment from the deceivingly mundane does not always work in practice when companies are travailing through difficult economic patches.
The streets are littered with the figurative carcasses of leaders who subscribed to this hands-off style, only to be dragged down by something that started as a whisper and built to a deafening shout. A small faux pas or error of omission or commission can grow exponentially. Unfortunately, in many organizations, it is just not CEO-ish to sweat the small stuff.
Here are a few infamous stumbles that probably started small but ultimately led to painful “flat-on-the-face” falls.
A bank executive in 2007 somewhere in a palatial office is talking to his or her loan officers stating, “There is nothing wrong with granting equity home loans to the creditworthy-challenged. So what if these poor schleps don’t have jobs or may never pay back a single debt? Give them the loans because it will help our bottom line, and if the borrowers default, who cares? By that time, we’ll have sold the loser loans to someone else or the property value will have gone up and we’ll be better off anyway.”
Famous last words.
How about the now infamous auto executives who flew to Washington on their majestic corporate jets in search of government handouts? No doubt they thought, “No one will notice the planes, and if they do, who cares anyway because we need to secure billions to survive, so what’s a few hundred large to fly a measly 395 miles each way.” The Big Three CEOs would have been smarter taking the Grey Dog (Greyhound Bus) to D.C.
Pretend you are a bug on the wall in the Oval Office around August 24, 2005, when the red phone rings and it’s Al Roker, America’s favorite weatherman, alerting the president to the pending precipitation that is expected to hit New Orleans in the form of Hurricane Katrina. The leader of the free world responds, “What’s a little rain? It can’t make a difference; no need to jump through hoops to prepare. Plus, isn’t a little water good for the grass?” Ask the people still living in FEMA trailers if they agree.
Who knows if there may have been a client of Bernie Madoff, the grand shyster of all shysters, who looked at his or her monthly statement and thought, “Gee, it’s strange that this statement is printed on paper more indigenous to a lavatory than a top-tier money management firm.” So what if the money market fund Madoff used and listed on the report didn’t inspire confidence because alongside the name was the fund’s slogan: “Find someone we paid and will pay you.” It’s a good bet the client dismissed these little details, fondly pondering the extraordinary month after month returns that America’s now most despicable con man claimed to achieve.
Each of these issues started small but ended big, hairy and very ugly. In business, every day, executives see things and too many neglect to anticipate the larger ramifications. Common thinking is, “Let my person call the other guy’s person and have them work it out.”
Successes are built on a series of small, seemingly inconsequential steps. However, not minding the details, thinking someone else a few levels below will catch it or relying on the good fairy to solve the issue just doesn’t cut it anymore. Apathy and turning a blind eye provide the makings for a perfect storm.
In today’s precarious and volatile business environment, leadership must set the tone and the standards. This includes paying attention, watching for warning signs, constantly looking for chinks in the armor and always asking the tough questions when something does not pass the smell test.
Many executives want to distance themselves from the nitty-gritty and deal from on high. The best CEOs, however, when necessary, act like hands-on managers to prevent a broken branch from becoming a falling tree that hits them in the head.
Michael Feuer co-founded OfficeMax in 1988. Starting with one store and $20,000 of his own money during a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling it for almost $1.5 billion in December 2003 to Boise Cascade Corp. Feuer is CEO of Max-Ventures, a retail venture capital/consulting firm, and co-founder and co-CEO of Max-Wellness, a new health care product retail chain concept that is launching in 2009. 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 email@example.com.