How Great Leaders Think

The Art of Reframing

Lee G. Bolman, Terrence E. Deal

• Publisher: Jossey-Bass
• Year: 2014
• ISBN:
  9781118282236
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

The proven model that offers powerful and elegant strategies for leaders

How Great Leaders Think: the Art of Reframing uses compelling, contemporary examples to show how more complex thinking is the key to better leadership. Leaders who understand what's going on around them see what they need to do to achieve the results they want. Bolman and Deal's influential four-frame model of leadership and organizations—developed in their bestselling book, Reframing Organizations: Artistry Choice and Leadership— offers leaders an accessible guide for understanding four major aspects of organizational life: structure, people, politics, and culture. Tapping into the complexity enables leaders to decode the messy world in which they live, see more options, tell better stories, and find strategies that are more effective. Case examples of leaders like Jeff Bezos at Amazon, Howard Schultz at Starbucks, Tony Hsieh at Zappos, Ursula Burns at Xerox, and the late Steve Jobs at Apple provide concrete lessons that readers can put to use in their own leadership. The book's lessons include:

• How to use structural tools to organize teams and organizations for better results
• How to build motivation and morale by aligning organizations and people
• How to map the terrain and build a power base to navigate the political dynamics in organizations
• How to develop a leadership story that shapes culture, provides direction, and inspires commitment to excellence

Part 1
Leadership in Four Dimensions

Before we change the world, we need to change the way we think.

—Russell Brand¹

A man cannot expect to progress without thinking.

—Henry Ford²

NOTES

1. Brand, R. “Russell Brand on Revolution: ‘We No Longer Have the Luxury of Tradition.’” New Statesman, Oct. 24, 2013. http://www.newstatesman.com/politics/2013/10/russell-brand-on-revolution. 2. Quoted in Hoffman, B. G. American Icon: Alan Mulally and the Fight to Save Ford Motor Company. New York: Crown, 2012, p. 126.

Chapter 1
Introduction
The Power of Reframing

Intelligence, talent, and experience are all vital qualities for leadership, but they’re not enough. They don’t make the difference between success and failure. It’s commonplace for businesses, once successful, to go into a funk. Then they need a turnaround because the smart, experienced people in charge who know the place better than anyone else have failed. The usual solution is to bring in an outsider with a stellar track record, but that approach doesn’t always work. It all depends on how a leader thinks.

Take the case of an American institution, JCPenney, where generations of Americans had shopped for almost everything for more than a century. More than a few remember it as “the place your mom dragged you to buy clothes you hated in 1984.”¹ By 2011, the firm was treading water, and CEO Myron Ullman retired after seven years at the helm. Ullman’s initial years had gone well, but the recession of 2008 hit Penney’s middle-income shoppers hard, and the company had been going downhill since.

The board looked for a savior and found Ron Johnson, a wunderkind merchant who had worked his magic at two of the most successful retailers in America. He’d made Target hip and led Apple Stores as they became the most profitable retail outlets on the planet. Johnson moved quickly to create a new, trendier JCPenney. His vision went well beyond making the company more profitable. He wanted to graft an entirely new model of retail merchandising on old root stock: “to analysts and employees, Johnson was Willy Wonka asking [them] to go with him on a trip through his retail imagination.”²

Wanting to move fast, Johnson skipped market tests and staged rollouts. “No need,” said Johnson. “We didn’t test at Apple.”³ Creative new floor plans divided the stores into boutique shops featuring brands such as Martha Stewart, Izod, Joe Fresh, and Dockers. Centralized locations provided places for customers to lounge, share a cup of coffee, have their hair done, or grab a quick lunch. Games and other entertainment kept children occupied while customers visited boutique offerings or just “hung out.”

Johnson quickly did away with Penney’s traditional coupons, clearance racks, and sales events, part of a model that relied on inflating prices, then marking them down to create the illusion of bargains. Johnson replaced all that with everyday “Fair and Square” prices. To Johnson’s rational way of thinking, this move made perfect sense. But shopping is more of a ritual than a rational undertaking:

JCP’s Ron Johnson was . . . clueless about what makes shopping fun for women. It’s the thrill of the hunt, not the buying . . . Women love to shop and deals are what make the game worth playing . . . Bargain hunting is now like playing a game—and finding deeply discounted goods on sale is part of the game.⁴

Johnson replaced much of Penney’s leadership with executives from other top retailers. Many, like Johnson, lived in California, far from company headquarters in Plano, Texas. They often looked down on the customers and the JCPenney culture they had inherited. One of Johnson’s recruits, COO Michael Kramer, another Apple alum, told the Wall Street Journal, “I hated the JC Penney culture. It was pathetic.”⁵ Inside and outside the company, perceptions grew that Johnson and his crew blamed customers rather than themselves as results went from bad to worse. Traditionally, great merchants, such as Costco’s Jim Sinegal or Wal-Mart’s Sam Walton, have loved spending time in their stores, chatting up staff and customers, asking questions, and studying everything to stay in touch with their business. Johnson, on the contrary, gave the impression that he wouldn’t shop in one of his own stores and didn’t particularly understand the people who did.⁶

Johnson substituted broadcasts for store visits. He sent out company-wide video updates every twenty-five days. Staff gathered in training rooms to hear what the CEO had to say, and struggled to make sense of the gap between Johnson’s rosy reports and the chaos they were seeing in the stores. It didn’t help that Johnson liked to broadcast from his home in Palo Alto or from the Ritz-Carlton in Dallas, where he stayed during visits to headquarters. Instead of marking milestones in Johnson’s turnaround effort, the broadcasts deepened a perception that he was out of touch and self-absorbed. They “came to be emblematic of how Johnson seemed to have little grasp of the way he was perceived inside the company and how little faith workers had in his plans.”⁷

Johnson’s reign at JCPenney lasted seventeen months. Customers left, sales plummeted, and losses piled up. A board with few good options sacked Johnson and reappointed Ullman, the man who had left under a cloud less than two years earlier.

If Johnson failed, even though he was a retail superstar, imagine how much worse it would be for a company to hire a chief executive who didn’t even know the business. That’s what the board of IBM did after the company ran up a $5 billion loss in 1992. They fired CEO John Akers and went after such luminaries as Jack Welch and Bill Gates, who all said no. Eventually they turned their sights on Lou Gerstner, who had just finished a stint as CEO of Nabisco, purveyor of brands such as Oreos and Triscuit. Skeptics wondered if he knew the difference between chocolate chips and computer chips.

Gerstner spurned the initial overtures. He knew IBM was in deep trouble and wondered whether he, or anyone else, could save it. In the end he was persuaded by friends who told him, “IBM is a national treasure.”⁸ He took on the awesome challenge of pulling a giant enterprise out of its free fall.

When he arrived at IBM, Gerstner saw an exclusive club of sovereign fiefdoms, a bloated whale trying to compete with a group of agile bluefin tuna. The smart money wanted to break up the company, and vultures circled in the hope of grabbing the good stuff, like the renowned T. J. Watson Research Center.

In the 1960s and 1970s, IBM had been the jewel of American business, the world’s most admired company. Its laboratories developed products such as the System/360 mainframe, so advanced that competitors struggled to keep up. IBM’s sales force dominated the computer market. Impeccable customer service kept customers loyal and satisfied, as reflected in the popular adage that “no one ever got fired for buying IBM.” Enjoying a near-monopoly in the computer industry, IBM entertained America with Charlie Chaplin commercials and pithy slogans such as THINK. But too much success can be heady and dangerous. IBM began to lose touch with changes in the world outside. E...