Larry Bossidy on confronting reality


Larry Bossidy has had a long and distinguished career serving on the boards of several well known corporations including US global giant General Electric, the aerospace and auto parts corporation, AlliedSignal, and multinational engineering corporation Honeywell.

Bossidy was credited for transforming the fortunes of AlliedSignal through his use of the Six Sigma quality programme and an uncompromising focus on growth. He delivered 31 consecutive quarters of earnings-per-share growth above 12 per cent during his time at the company.

More recently he has enjoyed a second successful career as an author. His first book "Execution: The Discipline of Getting Things Done", co-authored with Ram Charan, was a wake up call to corporate America.

In his most recent book (also co-written with Charan), "Confronting Reality: Doing What Matters to Get Things Right", Bossidy continues in the same pragmatic vein.

To be successful in the future, he asserts, organisations need to face up to the realities of operating in the modern world, both internally and externally, and decide what adjustments are needed.

What kind of qualities does a leader need in order to "confront reality" in their organisation?

That's a key question. If the leader is not disposed to confronting reality, it makes it very difficult for other people in the organisation. We need people running organisations that have an almost unquenchable thirst for information, that like to solicit and listen to other people's views, and are able to put clarity on complexity. A lot of people in the world think that intellect comes from complexity, but intellect comes from simplicity. We need people who are willing to change and not protest against change.

That is not all though?

We also need people who live among reality. They are not insulated. They are not pompous, they are not egotistical, and they don't mind climbing down from their one position.

There is a lot of strength in having the same ethics, and the same values, over time. But you shouldn't be unwilling to change your position over time in the face of new facts.

So we are looking for people who are flexible of mind, perpetually adaptable, and who have a willingness and almost an eagerness to change, who have the courage to risk failure.

What does the "courage to risk failure" mean in practice?

People who are prepared to look at problem solving in fresh ways. There are some people who only make decisions based on their experience, and there are other people who take a clean piece of paper and find out if there may be a different solution than the traditional one. Those kinds of people, I think, will tend to be in greater demand in the future.

Don't people who go against the convention often get knocked down?

Some of that is their own fault because they don't present their ideas very well. Some of it is because they are in cultures where that kind of viewpoint isn't tolerated. Those cultures are going to be under siege during the next decade. But you are right, it is not always welcomed, you have to be in a place where a discordant view is listened to.

Where are these leaders for tomorrow going to come from? Can you train them within an organisation? Or do they have to be imported?

I think you can train them. But I think you've got to make it a point to train them. I don't think they are just going to rise through your organisation if you don't provide the right education and training, if you don't provide the right incentives, if you don't pay for the right things.

In business you are always trying to judge what a person's growth potential is. So you have to put more of a premium, if you will, on people who have the kind of characteristics that I stated. Then make sure you bring those people through the organisation. As opposed to many others who might be good, but who are not going to exhibit these qualities that I mentioned, and therefore not going to be the right leaders for the enterprise.

How do you reward these people?

Make an example of them in a positive way. Promote them in a positive way. Compensate them in a way that suggests you want them to stay.

I read once that you didn't think interviews were a very good way of hiring? Is that right?

I think that they are nice introduction. But that is all. Because some people interview very well, who aren't terribly capable, and some people don't interview very well who are terribly capable. So the essence of an interview has to be gleaned by checking references, talking with people where that person has been. Where they have seen them every day for x number of years. And it is on that basis that I used to form my opinion.

How do you know within an organisation when it is time to change? When it is time to disrupt the organisation?

Dispel the notion that change is always good. You have to be grounded in an understanding of what the problems are of the business, and therefore what the alternatives are, before you decide to change.

We use some examples in the book, where a couple of big companies decided to change, and a couple didn't and they were both right. But there are still people out there unfortunately who think the only answer to everything is change. They are going to be dangerous.

You have to have the intellect, the savvy, the sense, to know what to leave alone. And when I say leave alone, you may tinker with it, adjust it in some way, but fundamentally leave it alone.

In the book you talk about "initiatives" as a way to get things done, to get the ball rolling, when confronting change within the company?

I happen to be a proponent of Six Sigma, but it isn't this specific initiative that matters. It is the fact that you cause people all over the business to work together to get the objectives achieved.

In other words it isn't just a financial person, or a marketing person, or a manufacturing person, in Six Sigma you need people from all over the business. And once you can get an attitude of culture, of people from all segments of the business working together, then you can introduce measures that can bring about change more easily.


About The Author

Des Dearlove & Stuart Crainer
Des Dearlove & Stuart Crainer

Des Dearlove is a long-term contributor and columnist for The Times and a contributing editor to Strategy+Business. Stuart Crainer is a contributing editor to Strategy+Business and executive editor of Business Strategy Review.