When things get rough — as now — beware of cowards, mixed messages, and macho managers

Tough times sort out the true leaders from those who wear the clothes but have nothing beneath them. Leaders lead; mere administrators, whatever their job titles, panic. Worst of all, fair-weather bosses infected by Hamburger Management send people mixed messages. In today’s atmosphere of frantic competition and short-term focus, mixed messages caused by “macho” management can make bad situations far worse and leave a business wide open to crushing problems. It’s time we recognized that moral courage is often a truer test of leadership than mere quarterly results.

If nothing else has results from our boom and collapse economy, it ought surely to make everyone aware of how many supposed leaders are nothing of the kind; and the ease with which such executives, under pressure to “deliver the goods or else,” cross the line from tough business practice to dishonesty and fraud.

A few past offenders have been caught and punished, but that doesn’t mean the underlying problems have been cured.

That won’t happen until people stop using false measures to judge success, thus propelling wholly unsuitable people into jobs they cannot handle, for all their swagger and pride.

Pinker & Blacker: a case study in the dire effects of Hamburger Management in a crisis

Let’s imagine a corporation called, for the sake of a name, Pinker & Blacker, Inc. Their executives certainly aren’t criminals, nor even basically dishonest. For decades, they and their predecessors have conducted their business blamelessly, gradually growing into a major player in their industry. During the last round of corporate scandals, they took care to put their own house in order, establishing codes of practice and policies to govern their business and financial dealings.

Recently, however, competition has grown as fresh players entered their market from China and elsewhere. They could no longer keep up the pace of past profit growth or Wall Street’s expectations. Profits fell and the stockholders of Pinker & Blacker began to urge an all-out effort to rebuild their slipping share price. Targets were raised, jobs cut, and everyone re-focused on getting the desired quarterly results.

Away in a distant part of the business, a small number of people devised a plan to increase returns dramatically, if riskily. At first it went well and the players were praised. They felt secure and free from the apprehension their colleagues felt for their futures.

Then, without warning, things turned ugly. Their plan started to come apart.

A major loss of face was the least of their worries. Bonuses depended on keeping up the steady flow of results. So did jobs and the glittering prospects held out to them so recently. Getting together, they looked for something to give them a breathing space to get back on track. In finding it, they crossed the line into misrepresentation — they called it "a temporary adjustment" — and then concealment.

In a few months, they thought, everything could be quietly put back in place and no one would be hurt.

It wasn’t and they, plus the business, were hurt very badly. Faces at Pinker & Blacker got redder and redder. Profits — and the share price — went into free-fall ,and the business faced law suits and heavy fines.

So what went wrong?

Why did this happen? Why did a rational search for financial stability spill over into irrational risk-taking and corporate malfeasance?

It’s easy to write what ought to happen and do it far from the battle lines. But fine words are worthless without the resolution to back them up when doing so will be costly. In such circumstances, fine-sounding policies and codes can do more harm than good, producing a sense of complacency that causes executives to put such unpleasant problems out of their minds.

In this case — as in so many others — the executives gave mixed messages. The long-term, strategic message of "follow only sound business practices" was drowned out by the short-term, extremely loud and macho message of "deliver the results . . . or face the consequences."

Macho management is often no management at all

It’s too easy for managers to believe leadership lies in setting people tough objectives and weeding out any who fail. This looks and sounds strong, but it is fundamentally lazy and cowardly. Such people capitulate to Wall Street at the first whiff of trouble, and drop into the habit of giving it whatever it wants, even if it ruins the business for the longer-term. They are no friends to the shareholders, who typically bear the cost, or the employees, who are blamed. Instead of standing up for what is right, they shift responsibility onto others.

The real focus of the leader should be to stand apart from short-term pressures and concentrate on the wider picture. Sometimes, leadership demands accepting failure — even welcoming it — where the alternative is departing from integrity and sound business practices.

Leaders are constantly forced to decide on priorities under fire. The buck has to stop with them and they may well face many unpalatable choices. In such cases, moral courage is a truer test of leadership than material results; especially when that means accepting that some problems aren’t solvable by acceptable means . . . and none are ever resolved by putting the blame onto other people.

To be a Slow Leader means to face the test and stand firm. To borrow from Kipling: “If you can keep your head when all about are losing theirs and blaming it on you . . .” you might become a true leader, not simply a hired administrator in macho clothing.

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