Tuesday, March 18, 2008

Built to Last

Sea Fever is 46 years old this year. She was designed for the late Alex Houghwout by famed naval architect Bill Tripp in 1958 and built by Mercer Boat Works in 1962. By every standard, Sea Fever was deliberately built to last. Her hull, for example is 4 inches thick to the water line and she is fitted with a 4 inch solid bronze cap that runs the entire length of her keel and rudder. I once hit a reef at 6 knots that took her right out of the water as we rode up and over it and she didn't even have a scratch! In addition to her rock solid hull, Sea Fever was given an expensive (at the time) 1958 Fresh water cooled Mercedes diesel, that, even after all this time, still starts on the very first try every time. Yes, Sea Fever was built to last. But that doesn't mean she hasn't needed a lot of tender loving care along the way. Sails, rigging, paint, varnish, and electronics have all been replaced at one time or another and that's to be expected, but pound for pound, Sea Fever is in many ways stronger than many of her modern counterparts. It also helps that she had two dedicated Captains that not only understood her pedigree but were concerned with her legacy as well.

As often happens on a long cruise, we were sitting in the cockpit comparing life and sailing when my first mate, Brett Modesti, took our Sea Fever conversation to the next level. "Tom," he asked, "can you point to an existing organization that was built to last and has a sustainable culture?"

This was a great question. Even when something is built to last, it will still need to be sustained by people who care about her pedigree and legacy.

Building a sustainable organization requires that its leader truly engage people to the point where they (the crew - employees and other stakeholders) take full responsibility for the ship's continued well being. The ship (organization), after all, is the vehicle that carries us all into the future.

In my work, I have asked over 3000 employees and managers what being "engaged" looks like and they have all described it more as a feeling.

1. Feeling Part of something meaningful, not just profitable
2. Feeling Challenged, not overwhelmed
3. Feeling Appreciated, not patronized
4. Feeling Responsible for the outcome, not a scapegoat

No one goes to work to do a bad job, but few get inspired about exit strategies designed to make owners and investors rich at their expense. It's interesting that a current best practice in engaging employees is to fire the bottom 10% every year. Good luck engaging people with that one! Just ask former Hewlett-Packard CEO Carly Fiorina.

So my pick for a company that was built to last and has a sustainable culture is General Electric. But not for the reason you may think. GE has a deeply rooted management culture and a rich tradition of guiding and mentoring future leaders through its ranks. Remember, there are tens of thousands of GE executives and managers besides the ones that make the pages of Newsweek. GE grows their own at every level. And they do it very well.

"During the 20 plus years that Jack Welch ran GE, it became the most valuable corporation in the world, increased in value over thirty times and under his leadership turned out more Fortune 500 CEOs than any other company in history." - Steven Bryce, Journalst

What most don't know is that this culture of grooming future corporate leaders was there long before Jack Welch took the helm, in fact he was a product of it, and as long as the commitment to sustainability remains, it will be there for a long time to come.

One of Mr. Walch's many contributions to the GE legacy was leveraging GEs wealth to pay off a market domination strategy: be the top two players or get out. Impressive use of power and resources. Fortunatly for Neutron Jack, as Welch was affectionately called at GE, the "father of fire the bottom 10%" had a deep, battle tested management corps to pull it off.

I believe that sustainability and succession planning is imperative for founders if their vision involves the long-term survival of the organization. The founders of GE set a standard and created a tradition much like the framers of the U.S. Constitution did. Those men, as described in Jim Collins' books "Built to Last" and "Good to Great" had what I call "Character", something few have a clue about today. In fact character is what we revered in those leaders. And in my view, the organizational legacies that men of character build take lot to destroy.

So, what is Character, exactly? Well, I define Character not simply as strong ego and personality, although they had those as well, but rather, men who "knew themselves at a deeper level". They were clear about their:

1. Passion - they knew what they were giving their lives for; their passion had to do with contributing to society, not creating an exit strategy.

2. Purpose - they knew how they affected the world around them, they were fearless in doing the right thing rather than the politically correct thing.

3. Values - they had a set of personal values that they thought about and accepted as core to their being. They were able to remain true to themselves.

4. Unique Abilities - they knew what their strengths were and focused on them, empowering others "with character" to employ their different and complementary unique abilities.

In short, they made their people feel part of something meaningful, challenged, appreciated, and responsible for the outcome.

I work with some amazing CEOs. And yet, there are many others who are just run by the "seat" they occupy and bring nothing to it whatsoever. These are not bad people. On the contrary, they are really hard working individuals, but they are, in my experience, unconscious to their own Purpose and Passion. Fortunately, in a company like GE, their vast management corps still seems to carry the tradition forward.

By the way. What works for GE will not necessarily work, as we have all seen, for Home Depot. And I suspect it may not work for Chrysler either. But that's another conversation.

This is day 74. Sail On

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