to the current position, which now makes him part of Prism's senior management team.
With the traditional revenue model collapsing and media going increasingly digital, Prism International is in decline, as evidenced by shrinking market share and decreased revenues. The need for a new strategy is overwhelmingly clear, but senior management is showing a collective reluctance to throw off the chains and take action. Freddy believes radical change is needed, but he lacks the communication, leadership and persuasion skills to get others on his side. He feels his logic is sound, but he's never been great at winning others over to his opinion. As an IT guy, his expertise is in logic and explanation, not rhetoric or debate. Freddy feels there is a need to experiment, learn quickly and adapt to the changing consumer and technological reality. But he struggles to express his opinion – plus, he's the new guy.
Nancy Iwala, a second-generation African American, is Senior Finance Advisor with The Tipton Group, a midsize steel manufacturer in Pittsburgh. Nancy joined Tipton after spending a decade in various finance positions at Whitesands, a regional sugar refinery and distributor. Whitesands was a highly-siloed company, where Nancy held a senior position but collaborated little with her counterparts in other divisions. Though she had considerable influence over Finance-related decisions, she rarely had to discuss or debate decisions with anyone outside her own department.
Tipton's previous CEO, Miguel Jimenez, left the company just before Nancy arrived, part of the fallout from an accounting scandal that shook the organization. The company has grown steadily for over a decade and, despite the sound business foundation that remains, is now in a precarious financial position, leading to a plummeting stock price and shareholder nervousness about what strategic direction the company will take. Nancy's role is one of half a dozen that have been replaced.
Hugo van Groten is a newly-promoted General Manager at AMR, a Brussels-based distributor of kids' toys. Hugo has been with AMR for 14 years. It is the only company he has ever worked for. Hugo came directly out of his MBA and into a marketing position, and has ascended the marketing ladder with AMR over the course of his career. He has been promoted to GM EMEA from his previous role as Director of Marketing. His new role makes him part of the dozen-strong executive team. He will now report to Daisuke ‘Dino’ Tai, AMR's CEO.
We hope that the concepts we discuss and the views we provide in this book will help you embark on the journey toward general management with confidence and clarity, and that you will form your own thinking around the issues and challenges we present via the journeys of Freddy, Nancy and Hugo. To that end, at the conclusion of each scenario discussion, we include a box called ‘Your Thoughts’. We encourage you to pause, reflect on what you've watched and read, and record some of your own contemplations.
Everyone's context is different, and it is not accurate to say that one success formula applies to every individual in every situation. However, we do confidently assert that the concepts presented in this book, considered properly and applied diligently, will provide a foundation from which effective general management can result. In these pages, Freddy, Nancy and Hugo will tackle the most crucial aspects of becoming a successful GM in today's business arena, and they will undergo the essential changes in personal and professional mindset that can translate, ultimately, into ongoing success.
We wish the same for you.
Section 1
Managing the Business
Chapter 1
Embracing the Why
Freddy
The Scenario
Freddy is in his office unpacking boxes, putting pictures of his family on his desk, etc. He hears an e-mail ding into his Inbox on his desktop computer. The e-mail, marked urgent, is from Trish McDougall, Head of Technology and Operations North America. The other half-dozen members of the New York management team are copied on the e-mail as well. Trish is requesting a meeting to discuss the need for a new strategy.
Part of the senior management team assembles. In addition to Freddy and Trish, present is Vivian Ho, SVP IT, North America, to whom Freddy reports. Absent are Gil Stanton, VP Operations NA, and Patrick White, SVP Operations NA, all of whom report to Trish as well.
Here's how their conversation goes:
Questions We Asked
1. Have you ever argued for or against a diversification strategy? What position did you take? How was it received?
2. Have you ever been in a discussion where you felt your colleagues or bosses were adopting a short-term view to the potential disadvantage of the company? Did you say anything?
3. Have you ever had a different view than your immediate supervisor on an important topic? Did you make your opinion known? How was it received and what was the outcome?
Comments We Got
The user community provided numerous anecdotes describing sensitive situations they've encountered just like the one faced by Freddy – whether it was to argue for or against diversification, debate short-term wins versus long-term gain, or take on their boss when they thought he or she wasn't necessarily seeing things clearly. They reported extensively on the classic challenge that arises for many general managers stuck at the crossroads of authority. Often, the greatest requirement of a GM in this position is to be able to argue effectively, at the right times, for the right causes, in the right way.
Six overall themes emerged from the input we received. Here they are, including some of the representative comments made.
1. It's okay to argue for change. Change means innovation, and innovation means value.
‘You have to take a risk. Otherwise, sooner or later, you will be out of the competition.’
‘After the financial crisis, “long-term” suddenly became equal to a quarter. I spoke up.’
‘Short-term strategy is cost-saving, but this will not be sustainable in the long term. As a member of the supervisory board, I'm trying to help the managing director to shift her focus gradually.’
‘The phrase “The markets wants …” or “The market is expecting …” comes up often. But seriously – I think that the market is more concerned about a sound long-term business plan than some kind of EBITDA make-up.’
2. Articulate your position with data.
‘When arguing against diversification I relied on the lack of value in pursuing it – expected results from the new directions were smaller than in focusing existing resources on the current mission.’
‘My approach is to gather the facts on overall developments in the market, our share development over time versus competitors, present them in a format that will allow discussion, start the discussion and ask the team who is winning and why.’
‘If you're going to suggest going away from your current direction, you should bring insight, and a plan.’
‘Fact basis and risk analysis were the essence of making my opinion known.’
3. Build trust early and often, so
