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PUBLISHED ARTICLE: Moment of Truth for a CEO
5-Aug-11 [ by Larry Chao ] 99918 Read and 2 Comment

When I first met Mr. Huang (pseudo-name) in his Bangkok office‚ he looked like a polished‚ confident 62 year-old CEO dressed in his crisp white shirt.  But looks can be deceiving.


For the past few years‚ his over US$100+ million multi-national foods business here in Thailand had been struggling‚ losing market share and barely staying afloat.


This year the company had dipped into the red and people at headquarters had sounded the alarm bells. 

"Things are not going well‚" he had admitted to me when we first met.


Over the next three days‚ two events would touch Mr. Huang's life and serve as a wake-up call for the 62-year old CEO.


First‚ there would be a visit by a corporate board member.  Second‚ I would be conducting a workshop with his middle management team to brainstorm solutions to several nagging business issues.

Initially‚ Mr. Huang had balked at my so-called teambuilding event. 


"What is the value?" he had asked. 


In the end‚ he reluctantly agreed to go ahead with this workshop under the condition that the participants would present their results to him and the rest of the executive management committee.


Facing Reality


Meanwhile‚ the corporate board member came with a tough message for Mr. Huang: We could tolerate you breaking even‚ but losing money is unacceptable.  Our shareholders will not allow it.  Either you turn the business around‚ or we will have to find someone who will.


This challenged everything Mr. Huang had stood for.  All of his nearly 40 years of experience and reputation were on the line.   At the end of the day‚ whether a business succeeds or fails‚ the buck stops at the top.  For Mr. Huang‚ there was no place to hide.


What had gone wrong?  For the bulk of his career‚ Mr. Huang had been an authoritative manager.  To his own admission‚ he had used a top-down style‚ which had worked well in the beginning.


For example‚ as a former marketing executive‚ he got involved in day-to-day marketing tasks‚ like choosing the color of packaging or approving advertising copy.


?When I get involved‚ we get it right‚? he said.


Indeed‚ Mr. Huang spent much of his time bouncing up and down from the executive floor to the different functional departments on the floor below‚ dispensing ad hoc advice and intervening in execution.


Of course‚ middle management quickly learned that whatever they did would be overruled by Mr. Huang‚ so they stopped caring.  It became a downward spiral.  Soon‚ the quality of their work began to suffer.


More than once‚ the company had allowed competition to preempt them on launches of very important innovations.  This had led to losses of millions of dollars of potential sales.


As Mr. Huang contemplated his fate‚ we went ahead with our teambuilding workshop.  The participants worked hard and collaborated in cross-functional teams.  They addressed issues such as‚ how can we launch more innovations with business impact?  What new categories should we be in to aggressively grow share?  How can we improve cost effectiveness‚ and how do we really retain great talent?


After two days‚ we returned and the teams presented their solutions to Mr. Huang and the executive management committee.  The presenters were nervous‚ but I reassured them that these were issues that had plagued the organization for years‚ so to solve them completely in a two-day workshop would be a stretch.


Enlightenment


In the end‚ the presenters did a magnificent job.  No‚ the solutions were not perfect‚ but they showed insight and promise.


Mr. Huang was stunned.  He had no idea his team was capable of thinking so strategically.  He was surprised that inexperienced managers could know more than he did. 


Ultimately‚ the visit by the corporate board member and the performance by his middle management team made Mr. Huang question his entire approach to management. 


Had the world changed and left him behind?  Was it possible that inexperienced managers‚ closer to the market could see fast changes and trends better than he could?  If he had not been so fixated in doing things his way‚ could his teams have executed better on their own?  

Most importantly, if he had let go of day-to-day operations, could he have focused on more important issues that had affected the fate of his business?


Hindsight is 20/20 and sometimes it takes a crisis to create a sense of urgency for change.  But in most cases, letting go and empowering others, when they are ready to do the job, is a smart thing to do.


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