Meeting My Management Team
Leading change is an intensely lonely job.
This series of articles teaches how to apply best practices from McKinsey & BCG to any consulting business.
In part 1 of this series we dived into how I was head-hunted to turnaround a boutique consulting firm. Part 2 provided an overview of the consulting practice I inherited.
Part 3, this article, focuses on my initial interactions with the management team of the consulting business. We explore the challenges of leading and turning around a consulting business when one has to deal with a hostile management team.
For confidentiality reasons, we have modified some of the details in these articles.
Meeting my management team
The night before the first meeting with management team was not a great one by any measure. The room was tiny, it was noisy and I could not sleep. There are few things worse than taking an extra strong sleeping pill and not being able to sleep, and then feeling terrible the next morning because the pill has not worked itself out of your system.
So at 7am I was sleepy, groggy and preparing for a tough meeting. Everything moved in slow motion. Did I mention the airline misplaced my luggage, again? I was feeling bad inside and, wearing old clothes, I probably looked worse outside.
My champion on the board had tipped me off that everyone in New York and Moscow was in a tizzy because they felt I wanted to shut them down. He warned me to expect a less than friendly reception from my management team.
He also urged me to not expect too much hospitality from the rest of the business.
Here I was preparing for a tough first meeting with my management team and all the tools I had were being blunted: my mind and my image. Talk about the perfect storm.
Arriving at a meeting where you know nobody likes you or wants you around was a surreal feeling. It is something very few people experience in their lives. It was also the only time I can recall ever being in such a situation.
It takes a very different kind of leadership skill to set aside being thoroughly disliked, to focus on the task at hand. Especially when people who so intently dislike you are your own management team that you need to rely on to help you execute on the strategy.
It was not easy or pleasant. It was a strange feeling because every HBR article and thousands of blogs and leadership books provide advice on developing calm and effective cultures. Very few write about that niche situation when you come in to lead an organization that is in trouble but where the management team flat out refuses to acknowledge the need to change and personally attacks you.
Business can be personal, brutal and offensive. Too few books focus on that. They all make the assumption that employees mean well. Most do, but all it takes is 5% to make your life pretty difficult.
I arrived at the London offices around 8:30am local time. I was taken to a fairly dour room where unbeknownst to me at the time I would spend the entire day.
Yes, that is not an exaggeration. I spent the entire day in this one room. It may have been a kidnapping but I am not really sure. At the very least it was a form of incarceration. Think of 5 by 5 meeting cell that just happened to be in a luxury office tower. I was seated, offered some coffee and no food.
I was at the very least expecting a tour of the offices, an opportunity to meet the New York and Moscow consultants who were working on a study for a French client, followed by more meetings with my management team with breaks for lunch and dinner. I was expecting some form of hospitality.
Four dour looking consulting partners, members of my management team, entered the room and it looked and felt like a funeral procession. They were a representation of a different generation. They looked like an 80’s sitcom family. They just looked perturbed, angry and sad. Maybe irritated as well. They were trying to offer the minimum of professional decorum that they could and it was absolutely transparent.
They did this because they were under the impression they were untouchable because the rest of the firm treated ex-McKinsey and ex-BCG strategists like Gods and left them alone. Yet, I was not in awe because I had a similar background and I knew how many limitations such a background generated.
We where far from Gods. One cannot claim to be a great strategist when one’s business is in the gutter. A consultant should be measured on their last engagement. The past counts for little if it does not generate the skills to make the present more successful.
The senior consulting partner, the one who expected to get my job, was probably the most acerbic. It seemed she had prepared a soliloquy and needed no introduction to begin. She just began complaining and this suited me quite fine since it is always better when others talk first in a negotiation.
They show their cards.
The partner, lets call her Georgina, could not at all understand why the board did not have more admiration for “her” management team in New York and Moscow. She went into this long discussion about the strength of the management team which resulted in the quality of their team’s work, their ability to beat McKinsey, BCG and Bain in the market and an overview of the exciting studies they were doing and why the unit had been preserved.
This lasted for about 45 minutes with the other consulting partners spicing things up by adding their own thoughts.
Georgina was clearly the ring-leader.
It is important to realize that until now no one had asked me for my initial thoughts. I was being profiled. They were all operating on the fumes of rumors and it was probably making them dizzy. This was pretty much how the entire morning went.
When they did eventually get to what I thought, I sincerely explained that I was visiting each office, wanted to hear from every single consulting partner and consultant and would only make decisions once I had spoken to everyone. They where upset that I even needed to do such a review. They just felt their brilliance should radiate and be obvious.
As an aside, I actually did speak to every single consultant, even the ones the New York and Moscow offices tried to hide from me. I simply called them on their mobile phones.
I had some ideas (no partner actually uses the word ‘hypotheses’ internally unless they want to sound like a right donut) for the changes to be made, but they were not concrete.
Therefore, I was not ready to share them and I was completely open to any and all ideas.
Two of the partners seemed pleased by this while others in that room seemed upset that their value was not entirely clear. I did not get lunch, did not get to meet any of the consultants and it was a pretty horrible entry to the business.
In fact, one consulting partner made the comment that he could not believe I would not immediately see the value of the unit under my command, the consulting business, given my strategy background.
If they were trying to alienate their new boss, they certainly succeeded.
What always surprises me about so many boutique consulting firms is this obsession with analytics and this management team were no different. They had the values and culture of abrasive, whiskey drinking, profanity-laden Civil War generals but they believed they were special.
It had not dawned on anyone that values are what distinguish great consulting partners.
Sending the first leadership message
Ninety nine percent of people would react to the behavior of these consulting partners as a personal attack. They would become rude, angry and probably say as much. It takes an enormous amount of control not to lash out. I am not saying I was not upset.
There were times I wanted to respond to the abrasiveness of the management team, but I reminded myself that it never helps to attack someone. There are other ways to get things done.
One thing I had learned by that stage of my management consulting career is that if you have real power, you do not need to actually tell people you have it, since you can exercise it when needed.
It’s like asking someone, “Do you know who I am?”. If you were really important you would not need to ask that question in the first place.
The partners from Moscow and New York were obviously pleased with their abrasive performance but forgot about how decisions were made in the consulting business.
They believed they could continue playing fantasy league strategy and things would continue as is.
When I joined, the economy was not great and we were trying to cut costs as much as possible. Boutique consulting firms generally do not splash out on fancy dinners or year end parties, but we at least tried to.
While the overall consulting business did not have a support structure, the New York and Moscow partners had their own finance and HR support system which they retained from the days when the consulting business was still doing relatively well.
It was a legacy setup since the parent company had no real office in New York and it was just the consultants working there, so naturally the support staff in New York only worked for the consultants.
In November I sent out an email asking the management team to be extra prudent with costs, promotions and bonuses due to the economic situation. Since I had just assumed my role, I wanted to review all the decisions before they were implemented, but would leave it to the management team to present their recommendations.
I did not want to make the decisions for them – I only wanted to be the final step to review it and make sure it fitted into the broader economics.
One thing I learned from Lou Gerstner’s Who Says Elephants Can’t Dance? is that no matter who you are or how successful you were as a former consulting partner, or where you worked, plenty of people will ignore you and never agree with you.
And Lou Gerstner was one of McKinsey’s most successful former partners when he went to IBM. So, things did not bode well for me. Having read that book I knew that not being of Gerstner’s stature was going to make my introduction to business at least 5 times as bad as his introduction to IBM. It turned out to be much worse.
Irrespective of the strategy I was going to set-up, I had created a plan to initially consolidate power across the consulting business to ensure all decisions made supported the strategy I would rollout. And until I had that strategy in place, I had to prevent unnecessary and wasteful expenditures.
When the strategy was rolled out and the right people where running key parts, only then would I relinquish such tight control. In those early days I would sit down with my accounting team and review each line item.
One needs to track everything during a turnaround. Training, travel, meals etc., must all be cut unless they supported the new strategy. And everything needs to be reviewed since every item which previously supported the old strategy was no longer relevant.
This is a crucial tactic I used in all situations. Even when I ran a practice or office. Immediately consolidate and then devolve decision making when things are fixed. Everyone will complain but it is needed and necessary.
The plan was simple. I sat down with the CFO and the HR SVP and agreed that all financial codes related to consulting business had to be approved by myself when decisions were made and all HR decisions for consulting business would have to come through my office for approval.
So I had built natural roadblocks to prevent the management team from ignoring the new rules.
The management team in New York naturally ignored my messages and planned an elaborate Christmas Party, allocated generous bonuses and was planning to promote quite a few people. They were doing this just at time when the parent company was going to retrench close to 5,000 people.
They went ahead, completed all the paperwork and submitted it through their usual channels. The New York management team even announced the promotions before informing me, which pretty much sent a message that they considered the matter done and I should not interfere.
Yet, to their big surprise, they received a message from their support structures that all finance and HR decisions for consulting business would now go through me since the governance model had changed.
This sent a clear message to the consulting partners that things have indeed changed. I could have left them to make decisions, but it was apparent from the London meeting that they were living in the past and had no understanding of the broader business.
Moreover, if I had to chase them up to get any responses, they would simply ignore me and I would spend the better part of the day trying to speak to them. That is not productive.
In fact, I tried that at first. Before rolling out these changes I once left 6 messages over 3 days on the Moscow partner’s phone to understand why they were hiring new staff when the market had collapsed. He never got back to me.
Thankfully, Gerstner had prepared me for this.
Changing the governance structure is like cutting off their credit cards. The management team can only ignore you if they are allowed to spend freely. By controlling the purse strings, you leave the management team with no choice but to motivate for the changes they need. When you are trying to change the culture and behavior of an organization, this is the kind of tough love that is required.
This does create a bottleneck but that is necessary during a consolidation and turnaround.
Make no mistake about it. There is rarely a situation where people simply change their behavior. That is a myth of the Harvard Business Review and the Disney Channel.
Some will support you, usually the majority, but a few difficult management team members can cause a lot of trouble.
The New York and Moscow consulting partners had their lives, careers and egos entwined in running the so-called strategy teams and they would not give this up easily. People rarely change even if you place a rational explanation in front of them. Sometimes a change is tough and it needs to be pushed through.
The lesson is that if you cannot convince your management team to change their minds, remove the processes that aid and abet bad behavior.
That is a vital lesson in senior management where you are traveling all the time and have staff all over the world. It is just not possible to sit down with everyone and convince him or her of what needs to happen.
In big companies, when some key people refuse to listen, and it is always a “when” and not an “if”, you need to change the processes. Otherwise, you will spend your entire life chasing them down.
Finally, I was not happy to allocate bonuses since I felt the compensation structure was too rich and the delays and misunderstandings caused by the New York and Moscow partners, via their bonus and promotion announcement, created the perfect opportunity to allow natural attrition. I was looking for a way to cut some people and this provided the perfect opportunity.
A few people did leave but they were adding little value anyway. I wanted them to leave to free up capital which we could deploy more wisely.
I basically had to do nothing and the uncertainty alone caused the attrition I was seeking. And I did not end up looking bad in this process.
Initially many consultants from New York and Moscow avoided me since they assumed I either had no power to make changes or did not have the stomach to take on the senior managers. Due to this conflict, the management team ended up weakening their own influence. Their consultants now realized that their leaders did not have any real power and the leverage shifted.
I cannot say they took this without a fight. They lobbied hard with the board of the parent company and really fought me on this. Yet, they had treated the parent company so badly for so long that they had lost all support so there was not much they could do.
So, my early days were no fun. I had no real friends, was pretty much isolated but crucially had the board’s support.
Let me tell you this, eating lunch alone is a weird thing. When we read about leadership and the difficulties of executing changes, we rarely think about the mundane things. Yet, it is the mundane things where one feels the isolation. Imagine traveling all the time, basically having no friends, and constantly pushing people to do things they really do not want to do at all. That is the difficulty of leadership.
You are constantly fighting for change.
The isolation can become so numbing that you will question your judgement. Senior management being pushed out will complain about you. If you want to be loved, you should never take the role of leading a turnaround.
Just about every phone call you take, or place, is to get someone to do something differently or change things. As the new person, you will have to ask questions of people who think they should not be questioned and have never been questioned before. Many will not take kindly to it. Key partners may ignore meetings, ignore information requests and flat out refuse to cooperate.
That is a tough environment. I cannot say I knew it would be so tough when I signed up for this.
I vividly recall sitting in one meeting with my executive assistant and the partners. It was not going well and the tactic the partners were using was basically a filibuster. They were asking these really pointed technical questions on the smallest details of the changes we were implementing, thereby hoping to drown the meeting in details, which would lead to no decisions. They were running down the clock.
I turned to my assistant and said, “I really have no patience for this.”
She said, “Actually, you seem to have lots of patience to slowly implement everything.” At that stage she was one of the few fans I had.
To be continued …
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