06 June 2013

Good Catholic, Bad Catholic - Reconsidering That Whole CEO Vision Thing

The other day I met an interesting fellow. At one point he was arguing that CEOs earned their pay because it was their job to articulate a vision for the organization. For instance, he said, Jeff Smisek, United's CEO, had come on at the very beginning of our flight to welcome us on board and to remind everyone - his employees included - that United moved freight as well as people. "It's important to have that kind of vision held before people, to get people aligned and to continually remind them of what you are trying to create," he told me.

Earlier, he had said that while he'd been raised Catholic he was now an atheist. I thought, but did not say, "Well, you're still a good Catholic. That is, you still buy into the medieval notion of a pope whose revelation guides everyone else." And I would argue that this is the source of the late twentieth century CEO model, with its emphasis on vision.

Luckily for the West, this model gave way to empirical testing. "Truth" became something that anyone could theorize and test rather than something that the pope opined. We've known phenomenal progress since then.

I will admit that vision is sort of mystical. Someone gets an idea about a possibility or a future, the source of which isn't easily explained. But if that is going to be translated into the real world of business or any organization, it quickly becomes something akin to a testable hypothesis. And like a working hypothesis, to succeed it will have to be shaped by and respond to its contacts with reality.

Steve Jobs said that one big problem most CEOs have is the belief that "the idea" is the big deal. That idea or plan or vision can just be handed off to a team to work out. But the reality of creating a new product, he said, is that you are constantly trying to fit together 500 variables that shape and influence its success. Realities about the properties of glass or plastic, the movement of taste and markets ... all of these are changing and all of these shape your product.

Jobs, it seems, is describing a testable hypothesis. And one real benefit of such an approach is that it invites input from various sources. More data and more nuance on the hypothesis makes it more effective, more accurate, more likely to create results. By contrast, the model of a CEO whose unique insights are propagated out into the organization as guidance is one that is far more like the model of the medieval church than the modern R&D lab.

Fortunately, a growing number of organizational leaders have an approach to vision that's more like Jobs' than the pope's. My friend Daryl is the GM of the Houston Rockets. When he first took the role, an ESPN headline read, "Moneyball Comes to the NBA." Daryl avails himself of sports analytics. Essentially, his team of analysts is continually collecting data, developing, testing, and refining hypotheses, and running their ideas smack into the wall of reality. His organization still has hierarchy. There are still people who do better at data crunching than generating ideas about what data matters. In many senses it is probably no different than many organizations. But given his team's penchant for data, he can't just share a vision. He has to explain data, even though he's the GM. This management model is not about preparing for an ideal world. It's about dealing with this one. And curiously it is a model of management that is still considered the exception rather than the rule, one that makes headlines when it comes to town.

And while it sounds silly to suggest that a CEO might not be as subject to reality as anyone else, it happens. And perhaps inescapably so. But the continued embrace of the CEO as a source of vision rather than a catalyst for a working hypothesis just exacerbates that. Because it's silly to stop believing in God but continue believing in the pope.

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