LEADERSHIP STRATEGY: DON’T LET SUCCESS BECOME A PRECURSOR TO FAILURE
Reclaiming their founders' value of service
My consultancy was working with American Express after it had suffered a near fatal blow by not responding to challenges from the banking industry. At a meeting with their senior team, I was asked to share my perception of our culture-shaping intervention’s effectiveness. It isn’t comfortable nor safe to “tell it like it is” when a CEO is with his/her senior team. I operate from a strong ethics platform based on the core-values of Quality, Integrity, and Responsiveness. Integrity and responsiveness (remember, they asked me) demanded, and as a client they deserved, straight shooting.
by Art McNeil LSI Publisher
I suggested the project was not going well because change was being blocked by a cultural ghost. I went on to say something like, “Your founders evolved a perfectly adapted culture (collective set of habits) to exploit a credit card market of their own creation. But a blind spot came with that advantage—and it’s calling the tune that second generation executives are marching to. In spite of evidence to the contrary, you failed to recognize that the bank cards were changing the rules of “your game”.
It was a painful message to deliver and even tougher for them to hear. I was on thin ice but knew that senior teams frequently resist (subconsciously) what their company needs most. Amex home-office staffers were quick to pounce with what had become their customary practice of shooting messengers who delivered “negative” information. Concerned field executives—who were not being listene to at the time , rushed to my defense. Fortunately for Amex and for us, their field officers prevailed. From that day forward, things began to change.
The specific problem was that they had resisted lowering rates charged to retailers, and in spite of a shrinking market share, would not reduce what business owners viewed as an inordinately lengthy compensation interval. Until banks started to compete (with VISA and Mastercard), there had been no alternative for credit seeking consumers. Amex became a dominant force because of service innovation—but fell from grace when “caretaker” executives allowed the company’s heritage of service to mutate into change-resistant ideology.
Senior management saw themselves as custodians of a great legacy (aka ideology) rather than as values-directed leaders charged with helping employees respond to evolving consumer needs. I facilitated as they clarified their cultural-values. Once the senior team started to live their values rather than remind customers and investors how great they once were, arrogant behaviors caused by an ideological mutation were replaced by a company-wide desire to once more deliver superb service.
Amex focused the future tense of their cultural-values into a renewed corporate vision, and a once powerful culture was restored. The turning point came when a cultural ghost called “speak no evil” was exorcised.