High-Stakes Leadership

Leading Through Crisis with Courage, Judgment, and Fortitude

Constance Dierickx

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351613996
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

What makes some leaders so effective when the stakes are high, while others fall short? Why are some able to not only survive but to lead their organizations to new heights even in risky, fast-changing times? The answer is succinct but multi-layered: such leaders display courage, judgment, and fortitude.

High-stakes leadership does not require unnatural powers, nor is it predicated on a dangerous situation. The three signature character traits can be cultivated by anyone at any level in any organization, big or small. Organizational and leadership consultant Constance Dierickx describes high-stakes leadership in a simple, three-part model that illuminates the mindsets, strategies, and tactics leaders must draw upon to make tough decisions, take an unpopular stand, or ignore convention, providing real-world examples across a range of sectors and industries.

Dierickx developed her model of high-stakes leadership to help her clients—executives at organizations ranging from start-ups to nonprofits to large, global companies—better define what they need to bring strategy to life. This, she found, is the great gulf in business, the vast space between idea and results. High-Stakes Leadership helps leaders sharpen their ability to:

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• act decisively, with clarity and focus

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• test ideas using reason, and course correct as needed

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• be resolute and inspire others to continue, even in the face of challenges

Leading requires the courage to make conscious decisions about what to do, the judgment to separate information from short-term trends, and the fortitude to remain true to oneself and one's mission. When leaders do these things, they also become teachers, leading their teams by example, often without realizing it. The essential aspects of good leadership endure even as the environment and tactics change. Indeed, courage, judgment, and fortitude are not merely tools for survival, they are the means by which we sculpt the future.

Chapter 1

High Stakes

When a donor wrote a check to the Girl Scouts of Western Washington for $100,000, it was a joyous day for CEO Megan Ferland and her team. This donation was nearly one-third their annual budget.

Ferland and her colleagues knew this money would help send to camp girls who otherwise could not go. It would help the Girl Scouts extend membership to girls who may not have another place where they felt included and were encouraged to learn, grow, and feel the priceless sense of pride that comes from accomplishment.

Then, one day, Ferland received a letter in which the donor made a very specific request: “Please guarantee that our gift will not be used to support transgender girls. If you can’t, please return the money.”

This sort of exclusion is antithetical to what the Girl Scouts is all about. And while the situation might have presented a difficult dilemma for some leaders, Ferland says she didn’t even need to think about it.

What did Ferland do? She returned the money. It was clear to her that the organization could not keep the money. She said that Girl Scouts is “for every girl.” Her purpose was clear, and her judgment allowed her to understand immediately that agreeing to this untenable restriction was not an option. So, she returned the check.

Ferland’s actions offer a sterling example of high-stakes leadership. Despite the risk to her organization of returning a $100,000 contribution, Ferland’s deep well of courage, good judgment, and personal fortitude led her make the right decision for the Girl Scouts of Western Washington. A lesser leader might have caved, deciding to compromise the organization’s core values in exchange for the contribution.

What happened next, however, was nothing short of stunning. Ferland and her team went public with their decision. Then, they launched a fund-raising campaign on Indiegogo. Next, they created a compelling video about what Girl Scouts is about. They didn’t attack the donor, though many saw this person as a bigot. Rather, the video is a touching message about young girls and why Girl Scouts is so important.

The story spread like wildfire. When I saw it, I immediately posted about the story on Facebook. I was calling out to my friends, some of whom grew up with me in Cocoa Beach, Florida. Several of us were in Girl Scouts together from age seven through high school. A few had joined the eight hundred thousand adult volunteers now involved. More than a few Chevrolet Suburbans were sold to these dedicated women so they could take troops of Girl Scouts on trips.

Ferland and her team tapped into a potent resource—women who have an emotional connection to their time in the Girl Scouts. Fifty-nine million women and girls are in, or have been in, the Girl Scouts. I am one of those fifty-nine million, and my memories of camping, canoeing, and hiking the Appalachian Trail endure. Memories are great, but skills, resourcefulness, and resilience are even better.

As a Girl Scout, I learned how to tie fancy knots and when to use each type of knot. I learned how to stabilize a broken bone, whether the fracture was closed or compound. We learned how to play guitar, use dry bamboo to create a musical instrument, and sing our way through fear, sadness, or a minor epidemic.

Just imagine—twenty-four teenage girls camping together for two weeks. Primitive camping, nothing sissy! Set up near a beautiful mountain stream, we had plenty of clean water, but it was cold, so cold you wanted to scream when you stepped into it. We took matters into our own hands and decided to make a shower. We had a plastic bucket we could poke holes in but nothing else that would remotely resemble a shower. Undeterred, we used twigs tied together with twine to make a floor. Then, we added more twigs and twine to fashion “walls” that were tied to trees. Finally, we hung a door that swung on hinges made from … you guessed it, twine. The work of making this shower took focus, knowledge, and perseverance. Our counselors neither interfered nor discouraged us. They watched and then celebrated with us when we succeeded in making it work.

We grappled with issues from bugs to burrs to bears, and in the end, we succeeded. What was happening to us, besides acquiring knowledge, was that we were developing self-confidence. Underneath the collective sense of pride in our accomplishments, our individual capacities for learning, adaptation, and self-reliance were growing rapidly. The Girl Scouts helped us to be brave, make good decisions, and persist in difficult circumstances. When faced with a problem, or even danger, we didn’t crumble.

When I heard about Megan Ferland and the stand she was taking, I was exhilarated. She was acting with boldness and principle, and she immediately became a person of extreme interest to me. Ferland was smart to use the wave of attention to benefit Girl Scouts. She made good use of the platform she had—indeed, she built it as surely as my friends and I had built our shower in the woods all those years ago.

The thought that someone would deliberately interfere with any girl having experiences like those my friends and I had made me furious. I challenged my friends to donate to the Western Washington Girl Scouts. My grassroots plan may have helped. What helped more was the courage of Megan Ferland and the boldness she and her organization used to get the word out. Thousands saw the beautiful video they created for their fund-raising effort.

Watching a video, reading the story, and getting mad was one thing. More than seven thousand people did far more—they opened their wallets. In just three days, the Western Washington Girl Scouts received more than $250,000. That’s $150,000 more than the donor took back. Ultimately, the one-month Indiegogo campaign raised a total of $338,282.

For many organizations, the loss of $100,000 would be like letting go of a business unit. The donation’s return represented a major loss of revenue for the organization. Yet, it fueled efforts to replace the lost revenue, and in this case, what was unleashed produced a significantly higher dividend.

Megan Ferland showed her high-stakes leadership stripes in her decision to turn down money with strings attached. She did something that many leaders of far larger organizations are loath to do—she let go of money because to keep it would have exacted a much higher cost. It would have required that she and her team ignore their principles.

This type of courage is no accident. Ferland is an exceptional person, but she is not alone; the Girl Scouts benefits from the example and legacy of another high-stakes leader, Frances Hesselbein. Originally an adult volunteer in Pennsylvania, Hesselbein rose to become CEO of the Girl Scouts, a position she served in from 1976 through 1990. She transformed the organization during her fourteen years in the role, and Peter Drucker famously said she could run any company in the United States.

Hesselbein brought to the Girl Scouts a clarity of mission that had become obscured before she took her role as CEO. When directing a team to redesign the Girl Scout Handbook, she said, “When any girl opens the handbook I want her to see herself.”¹ She went on to say that she meant the books should appeal to a girl on a Navajo reservation or a girl in a New England home with a picket fence. That is courage, judgment, and fortitude in action. Frances Hesselbein and Megan Ferland both helped the Girl Scouts by being bold enough to bring these elements together.

Direction

When we think about crisis, we generally think only about the negatives that crises tend to bring with them. A crisis is, after all, a disruption of the calm that we may have enjoyed for some period of time. But one thing a crisis has over calm is that it is extremely clarifying. A fire, flood, or threat of harm focuses people immediately. Objectives, and thus direction, become very clear: survive, reduce discomfort, remove risk, or protect reputations.

As you read this book, chances are you aren’t in a crisis. That’s the good news. The bad news? Your current lack of crisis can lull you into settling for obscure objectives.

When I ask an executive about the direction in which she wants to go, she usually responds with something like, “I want a strategic planning retreat.” I ask why. Not only do we need a “why,” we need a “why” that is good enough to justify the investment. If you don’t get to the “good enough why,” you might have a meeting based on the sole objective of having a meeting. It is the leader who must establish direction, not a meeting planner. The higher the stakes, the more important it is to have clarity about your objectives. Great leaders are firm about what they want to do and are flexible, even innovative, about how they want to do it. The likelihood of success, especially when the stakes are high, is reduced by rigidity.

When Patrick Brennan took the job of leading the integration of Manheim Financial Services (MFS) and Dealer Services Corporation (DSC) after Manheim (an auto auction company now part of Cox Automotive) bought DSC in 2012, his boss gave Brennan very clear direction. Joe Luppino, the chief financial officer at Manheim, said to Brennan, “If one and one does not equal more than two, this will be a failure. Go make it work.”

He didn’t need to tell Brennan that the way to do it was to add value to customers. That is how Brennan thinks and is a key reason he was put in the role in the first place. The stakes were high because this was a significant acquisition for Manheim, and growing the business would give the company momentum. Failure would mean lost opportunity, revenue, market share, and reputation. The decision about who should lead the merger was important, but Luppino is no stranger to risk. He embodies the characteristics of courage, judgment, and fortitude that a leader needs to successfully navigate when the risks are high. Because mergers and acquisitions are notoriously difficult and fail somewhere between 50 and 80 percent of the time, it was critical to have a good leader overseeing the integration.

Right away, Brennan began to think about the marketplace and strategy. His first concern was to bring together parts of the business in a manner that would have obvious and immediate benefit to customers. This is an extremely atypical approach. Usually, a company starts looking for the mythical “synergies,” most of which fail to deliver what people believe or hope they will. Encouraged by run-of-the-mill advice on mergers and acquisitions, many companies start planning how to bring various functions together before they have a clear rationale for doing so. Technicians go to work to weld the pipes without concern for which pipes they are welding, why, or in what order. Overconfidence leads to a false belief that the analysis and due diligence work done before the deal and the pipe welding done afterward will create success. If this were true, more deals would deliver the promised value. A leader who has the courage to be thoughtful rather than mechanical, uses his own experience and judgment, and has the fortitude to focus on the big picture is far more likely to be successful.

Beacons

Leaders who provide a succinct and vivid description of the direction the company needs to go have far greater influence than those who speak only of profit. Their words and actions provide a beacon, reminding people where they are and shining a light on the path they are to follow. No matter the situation, the path can easily become littered with misunderstanding, rumors, and pressure from various constituents. Leaders must provide a beacon that is, in the words of Frances Hesselbein, “as constant as the North Star.”

As distracting as lack of clarity is for people inside an organization, the effect on customers is even more profound. When attention is drawn inward, customers take a back seat. Often, this happens without intention or awareness. The realization hits after results sag. Leaders who let customers suffer because the organization’s focus is on the wrong things will see erosion in the very part of the market that is most valuable—the part they already have. Ironically, some leaders spend millions to capture new customers while ignoring current customers.

Yet, some leaders abdicate their responsibility to provide the clear and shining beacon that people need. Even if leaders sometimes say, “we don’t know yet,” that is preferable to gossip and misinformation. Patrick Brennan knew that water cooler talk was inevitable, but he also knew that it could not be a substitute for communication from him and other leaders. To maintain focus, he made decisions at the strategic level with a few key people, keeping them out of the hands of technicians. He focused on the question, how will our customers be better off ? Explaining decisions within that frame of reference helps employees understand the changes being made and gives them confidence that the leader knows where he is headed. It takes fortitude to resist the urge to turn mergers and acquisitions integration into a mechanical exercise depicted by colorful slides with timelines and charts. Many a deal goes south because the details are buttoned up, but they are the wrong details.

Customer Value—Tomato, Toe-Mah-Toe

If you had asked a Manheim vice president and a DSC vice president in 2012 what customers want, each would have told you a different story. The vice presidents and general managers of the Manheim auto auctions talk a lot about relationships. They are very good at this, and it gives them important information about their customers. They are interested in the answers to questions such as, what is happening in a customer’s business, how can Manheim help, and are there red flags indicating that the customer may have some struggles? The customers of MFS were accustomed to a highly personalized level of service. Some of them had been working with specific individuals within the company for years. Customers trusted these individuals, and to them, MFS was embodied in a single person.

DSC customers interacted with the company in a different way. They used the phone, spoke with a person who visited their dealership, and utilized a web-based system to transact business. In 2012, DSC made a version of its software available for mobile devices. At that point, customers could manage their accounts anytime from anywhere. This was huge!

While MFS and DSC both provided financing, and each placed tremendous importance on customer satisfaction, they pursued their goals in very different ways. The story of DSC, MFS, and the company it became— NextGear Capital—is a case study in mergers. This one has been a stunning success. Why?

• Leaders showed courageous patience. Patrick Brennan, the Manheim executive responsible for the integration, has a sense of timing that is rare. He neither rushed in nor used a generic, “weld-the-pipes-together” approach. Brennan moves fast when things are clear and slows himself down when he needs to understand a complex issue. This is a vital characteristic of a high-stakes leader.
• Customer value and experience were the top priorities. Understanding customers was critical—the team asked, what do they value? Bart Becht says it best, “At the end of the day, what counts is not what the ten people in that room think, it’s what the consumer thinks.” His statement is emblematic of another characteristic of a high-stakes leader—a wide lens.
• The company was sincere with employees. Leaders who are aware that fear is distracting, and that sharing fears breeds rumors, will act differently from those who assume that employees will merely “go along.” Generic approaches do not work. You must identify your best people and hold them close. Those who you do not believe are a good fit need to know that. They need information and help so that they may leave with their dignity intact. None of this will happen if you do not know your employees well. Accurate judgment about people depends upon understanding them. When the stakes are high, there is no substitute for informed judgment.

It’s Not Rocket Scien...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Acknowledgments
• Preface
• Introduction
• Chapter 1 High Stakes
• Part I Courage
• Part II Judgment
• Part III Fortitude
• Conclusion
• References
• Index
• About the Author