Charismatic leaders are charismatic because they are the living embodiment of an inspiring and universal human narrative.
Companies that anticipate the need for a successor to a charismatic founder or leader should take the time to do this work in advance. Take the time to understand the narrative that the leader is living — what they really symbolize.
[Thank you Harvard Business Review]
[Ty Montague | 08.07.13]
We've all heard some version of this story: a brash and charismatic leader creates a runaway business success. The press can't get enough of him. And people can't seem to buy the products fast enough. The board and shareholders, enjoying the dizzying ride, are happy to look the other way if some of his antics sometimes seem... unconventional.
And then disaster strikes.
The leader dies, or gets ousted, or just gets bored, or gets old and decides to step back. After the initial shock, the company resolves to soldier on. A professional manager with an impressive resume is brought in. And the mantra is "our success is due to more than one person. This is a team effort."
And things actually go okay at first.
But as time passes, it becomes clear that something is wrong. You can feel the momentum waning. Key talent gets poached, and new products don't seem to have that old snap. The whispers begin that the company has lost its way. The press piles on. The share price plummets. The company stumbles, and is either gobbled up by a competitor or it just slowly drifts off to sleep and eventually disappears. I'm sure you have several recent examples of companies that are somewhere along this trajectory in your head right now.
If this scenario is really as common as it seems, why don't we know more about how to prevent it? After all, given the potential value to shareholders of solving a problem like this, you would think that corporate boards would think of almost nothing else.
But they are focused on the wrong thing. When looking for a replacement for a charismatic leader, they look for someone with an impressive résumé instead of someone who understands the power of story. You can survive losing a leader. But if the underlying story the leader was living gets lost, you are in deep trouble.
Charismatic leaders are charismatic because they are the living embodiment of an inspiring and universal human narrative. Branson and Kelleher are mavericks thumbing their noses at convention. Dorsey and Page are the boy geniuses inventing the future. The companies these innovators run make useful products and services to be sure. But they also make something even more important for their customers — they make meaning. These companies embody a story that everyday people can find inspiration in for their own daily lives. It is this deeper narrative that creates real loyalty and authentic evangelism.
Preserving this narrative shouldn't be an afterthought; it should be a company's first priority.
Some companies succeed at this, some don't. And some, like Ford Motor Company, have managed to do both.
When Henry Ford developed the assembly line, he ushered in the era in which middle-class Americans, not just the wealthy, could buy an automobile. In an instant, Ford's narrative and America's — freedom, ingenuity, self-reliance and optimism — were bound tightly together. And this powerful narrative didn't die with Henry. In fact, it flourished under a series of leaders who understood the story and kept it alive with successive waves of innovation and improvement.
But starting in the 1990s, and through much of the 2000s, Ford strayed from its core narrative. The professional managers in charge weren't students of story. They were students of spreadsheets, and short-term profitability. This resulted in a series of distracting acquisitions, and products that were drab, uninspiring, and poorly made. For those with a desire to dig deeper, this book chapter is particularly illuminating.
Blame was placed on a number of things: high pension costs, changing tastes, and a weak economy, to name a few. But the last statistic in this article from the early 90s hints at a different story: American car buyers, embarrassed and disgusted at the state of Ford and other American car companies, were turning in droves to imported cars, particularly from Japan — cars built and sold by companies that were acting more American than American car companies. Ford worked to address the quality issues but this takes time, and time was ticking away. As the crisis deepened, Ford began to hemorrhage money, posting astonishing losses by the mid-00's. Some began to whisper about what had once seemed unthinkable: the end of the road for Ford.
It wasn't until 2006 that Bill Ford (Henry's great grandson) and the board of directors found a leader that understood the Ford narrative and knew how to act Ford-like again. Alan Mullaly, an aviation engineer from Boeing was a guy with the right stuff. He and his team set about building higher quality products (a baseline necessity), and, notably, taking public responsibility for missteps.
But the breakthrough moment came when Mulally and his team opted not to take any of the auto-bailout money that the U.S. government was offering. This excellent video summarizes the whole story. Ford under Mulally started to feel American again. Suddenly, the company was recognizable again to American consumers. It was like an old friend emerging from a coma. You could feel confidence in the company returning. And the revenue followed.
Mulally, undoubtedly a talented leader and manager, was the instrument of Ford's resurgence, for sure, but Ford's success is really about something deeper — a return to that central narrative that is so inspiring to millions of Americans: "Americans innovate.
Americans take responsibility for their actions. Americans don't take handouts." It's not the person that inspires us, it's the narrative.
This core narrative is what allows us to apply that meaning to our own lives. It makes us proud (or embarrassed) to drive a Ford. That narrative doesn't have to be lost when the leader is gone, so long as the narrative is well understood, codified and preserved, and made actionable by people at every level of a company.
This codification takes focus and discipline. This is not about creating a mission statement by committee and carving it in a wall somewhere. It is about unearthing the authentic narrative that drove the company to its current success, and will also motivate the company's actions moving forward. And it is about working with people throughout the enterprise to apply the story to their area of specialization: product development, HR, sales, and, yes, marketing.
Companies that anticipate the need for a successor to a charismatic founder or leader should take the time to do this work in advance. Take the time to understand the narrative that the leader is living — what they really symbolize. Codify the narrative and share it with prospective candidates. Work with them to explore ways that the company can act upon the narrative in the future. Build a map of iconic first actions that the incoming leader will undertake that support and extend this narrative. By recruiting a leader who is truly committed to understanding and advancing this core narrative, companies will set themselves up for an easier transition and greater future success than those that do not.
Ty Montague is the author of True Story: How to Combine Story and Action to Transform Your Business and a founder of co:collective, a consultancy that helps clients develop their strategy and brand story using the principles of storydoing.
i blog about the things I love: fitness, hacking work, tech, Experiences and anything holistic.
> Head of Digital Product at Nutrien