14th July 2006
The Malta
Marcello Lippi gave us a perfect example of
what it means to exit while on top. Just when he had the whole country at his
feet heaping glory for the unexpected victory at the 2006 World Cup against many
odds, Lippi wisely declared that his mission had been
accomplished and that he needed to move on to different challenges.
He no doubt reasoned out that when at the top one can only go down.
It is a lesson that ought to be heeded by many leaders in different spheres, politics and business included. It applies in two particular situations.
Leading is a tiring job. If one tries to do it for an overlong period of time in the same job, there comes a point when personal objectives will start to over-ride the corporate goals of the organisation one leads.
Extended time in the hot seat inevitably allows over-confidence to seep into the decision-making process.
Blinded by familiarity which impedes an objective view of the organisation’s strengths and weaknesses, even the best leaders will start taking decisions subjectively.
“Let’s do this because I say so and I am usually right” starts to become the rational for charting the organisation’s way forward. Little heed is taken that past successes were sourced from objective decision making and that in the absence of such objectivity one can hardly expect future decisions, based on over-confidence verging on arrogance, to have the same success as past decisions based on objective analysis.
Margaret Thatcher has suffered a bruising exit during her third term when she should have exited just after scoring the third consecutive electoral victory.
Tony Blair is risking a similar fate. In business we have the contrasting examples between the leaders at Microsoft and Nokia. Bill Gates was the brains behind Microsoft in the eighties creating an operating computer system which stole market share from under the nose of more resourceful and established players until it practically formed an international monopoly with its Windows operating system and related office software.
Success easily breeds inertia. Microsoft has been getting slower in issuing updated versions and has been wasting more energy in packaging its products to protect its dominant market position rather than to keep refreshing its product lines. In the process, it has allowed newcomers to take leading positions in electronic advertising and search engines while Microsoft kept guarding its cash piles. Microsoft share price in fact now trades on multiples resembling a fatigued low-growth giant rather than an agile high growth new era winner, a business mantle now carried by Google and Yahoo. Bill Gates should have left earlier.
Jorma Ollila joined Nokia in 1985 when it was still basically a tyre factory. He became CEO in 1992, chairman and CEO in 1999 and in 2006 he left his CEO role and stayed on as non-executive chairman whilst making it clear that his energies will now be mostly devoted to his new chairmanship of Royal Dutch Shell.
He left while Nokia is on top having protected market share in sale of mobile phones and continually refreshing its product line taking the breadth away from competitors, possibly with the exception of Motorola.
Another scenario when leaders should exit is when they set themselves very clear and specific targets at the start of their tenure. Once these targets are achieved, continuing to lead an organisation which is itself transformed by the achievement of the objective could be a recipe for disaster as the leader could lack the skills needed to lead the company post-goal achievement.
Mintoff post-1979 is a typical example of someone who achieved the very specific objective he set himself at the start of his 1971 tenure but continued to lead in the old manner when in fact the country needed new skills to win its way through a competitive global economy. Post-1979 Mintoff became a rebel without a cause.
Lippi set himself the target of making a very good show in the 2006 World Cup. This was never specifically defined but every one understood that the minimum would be the quarter-finals and the probable maximum would be the semi-finals. With Totti coming from a serious injury and with most of his players serving with Clubs involved in Calciopoli, it would take a strong charismatic leader to keep the team focussed. Luck helped.France Italy France Brazil Germany Argentina Portugal England
But luck on its own will not win you a World Cup. BeatingGermany
Pity Zidane did not understand the absolute need to exit on top. He was within minutes of it but ruined it by his senseless reaction in head-butting an adversary. Whatever Materazzi might have told him to cause such provocation it was between them. The head-but was shared with the rest of the world.
ClearlyItaly
He no doubt reasoned out that when at the top one can only go down.
It is a lesson that ought to be heeded by many leaders in different spheres, politics and business included. It applies in two particular situations.
Leading is a tiring job. If one tries to do it for an overlong period of time in the same job, there comes a point when personal objectives will start to over-ride the corporate goals of the organisation one leads.
Extended time in the hot seat inevitably allows over-confidence to seep into the decision-making process.
Blinded by familiarity which impedes an objective view of the organisation’s strengths and weaknesses, even the best leaders will start taking decisions subjectively.
“Let’s do this because I say so and I am usually right” starts to become the rational for charting the organisation’s way forward. Little heed is taken that past successes were sourced from objective decision making and that in the absence of such objectivity one can hardly expect future decisions, based on over-confidence verging on arrogance, to have the same success as past decisions based on objective analysis.
Margaret Thatcher has suffered a bruising exit during her third term when she should have exited just after scoring the third consecutive electoral victory.
Tony Blair is risking a similar fate. In business we have the contrasting examples between the leaders at Microsoft and Nokia. Bill Gates was the brains behind Microsoft in the eighties creating an operating computer system which stole market share from under the nose of more resourceful and established players until it practically formed an international monopoly with its Windows operating system and related office software.
Success easily breeds inertia. Microsoft has been getting slower in issuing updated versions and has been wasting more energy in packaging its products to protect its dominant market position rather than to keep refreshing its product lines. In the process, it has allowed newcomers to take leading positions in electronic advertising and search engines while Microsoft kept guarding its cash piles. Microsoft share price in fact now trades on multiples resembling a fatigued low-growth giant rather than an agile high growth new era winner, a business mantle now carried by Google and Yahoo. Bill Gates should have left earlier.
Jorma Ollila joined Nokia in 1985 when it was still basically a tyre factory. He became CEO in 1992, chairman and CEO in 1999 and in 2006 he left his CEO role and stayed on as non-executive chairman whilst making it clear that his energies will now be mostly devoted to his new chairmanship of Royal Dutch Shell.
He left while Nokia is on top having protected market share in sale of mobile phones and continually refreshing its product line taking the breadth away from competitors, possibly with the exception of Motorola.
Another scenario when leaders should exit is when they set themselves very clear and specific targets at the start of their tenure. Once these targets are achieved, continuing to lead an organisation which is itself transformed by the achievement of the objective could be a recipe for disaster as the leader could lack the skills needed to lead the company post-goal achievement.
Mintoff post-1979 is a typical example of someone who achieved the very specific objective he set himself at the start of his 1971 tenure but continued to lead in the old manner when in fact the country needed new skills to win its way through a competitive global economy. Post-1979 Mintoff became a rebel without a cause.
Lippi set himself the target of making a very good show in the 2006 World Cup. This was never specifically defined but every one understood that the minimum would be the quarter-finals and the probable maximum would be the semi-finals. With Totti coming from a serious injury and with most of his players serving with Clubs involved in Calciopoli, it would take a strong charismatic leader to keep the team focussed. Luck helped.
But luck on its own will not win you a World Cup. Beating
Pity Zidane did not understand the absolute need to exit on top. He was within minutes of it but ruined it by his senseless reaction in head-butting an adversary. Whatever Materazzi might have told him to cause such provocation it was between them. The head-but was shared with the rest of the world.
Clearly
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