“I feel terrible. It’s not like I’m totally depressed or anything, but I definitely don’t feel good. But I want to thank you anyway for opening up this painful can of worms, it’s exactly what I needed and expected you to do.”
At the time we had been working alongside Katharina, the chief executive of a holding based in Frankfurt am Main, for the past two years. During this time, the company had grown enormously. Good news, really, and Katharina was the veritable wonder woman leading the way. And yet, an expanding mid-sized business invariably faces the dilemma of building anticipated structures it cannot afford and currently doesn’t need. Still, the structures must be in place to meet and surmount tomorrow’s challenges and to cope with the larger order volume. This brings us back to the subject of entrepreneurial behavior […] when speaking of businesses and their works councils. Business thought and action entails always keeping three business factors in view – Past, present and future, including the transition from present to future.
When launching their enterprise or during an expansion phase many company executives claim: “I’ll wait until I have enough orders to justify hiring more people and installing the necessary structures.” Wrong way around! You need the workforce before you acquire the orders.
This was exactly Katharina’s problem. She had her eyes clearly on the future but failed to consider a smooth transition from today to tomorrow. As demand was flooding in, she planned two additional offices in the Ruhr Valley but neglected to notice that her staff at the Frankfurt main office were already on their last legs. There just wasn’t enough people power and they were trying to cover everything, including assignments that had nothing to do with their actual responsibilities. Everyone was involved in every business aspect, doing their best to somehow get the workload done. But Katharina’s one-track mind was hellbent on launching two further offices with an already over-stretched team. She wanted it all and she wanted it now.
Although we knew it was probably going to hurt her, we simply had to hit the brakes. “That’s not going to work,” we explained. You can’t expect to have everything at once, you have to set priorities.” […]
Expanding Personnel and hiring new people is guaranteed to take some time, so you really should postpone opening the new offices for four to six weeks.” “But that’s not the time plan,“ Katharina protested. “Maybe it’s not,” we replied. “But even the best laid plans are useless when the employment market isn’t supplying enough skilled people and it takes longer than planned to staff your new offices. We have no choice but to face reality and adjust the original plan. Otherwise your entire business will collapse around your ears and then we’ll find ourselves trying to salvage what can be saved. That would possibly mean a new contract for us, but for you, it would entail down-sizing to a healthy, manageable 80-person staff. You would have to let go of half of your people and go back to square one, starting all over again. Now, this process will not only take much longer, it will also cost you much more than just a lot of money. And all because you’re unwilling to wait four to six weeks and take things step by step.” […]
When Katharina ran out of convincing arguments, she broke out in tears. The painful truth dawned on her. We were right and she would have to let go of her ambitious plans despite the initial agony it cost her. Although we caused her pain and made her cry, she was ultimately grateful that we had opened up this painful can of worms, it’s exactly what I needed and expected you to do. As the leader at the top, Katharina needed someone who would talk straight with her. Employees are often too intimidated by the imbalance of power to give honest feedback, believing it would endanger their job. So, in order to avoid friction, they tell their bosses what they want to hear.
In our case, however, we are paid to be uncomfortable, to scrutinize doings with a critical eye. We really don’t enjoy destroying our client’s castles in the sand but do this in their own interest. Most of the company or team leaders who engage our services are so caught up in their business bubble, they take a great many factors for granted. And then we step in with our external, critical vantage point and challenge business as usual, questioning everyday processes and offering new possibilities and prospects. We literally force our client to leave his comfort zone and that can be quite a painful process. Yet sometimes it takes a curative shock to open someone’s eyes so he sees he’s adamantly marching in the wrong direction. To be sure, Katharina would not have thanked us for wordlessly watching as she willingly walked to her doom.
An excerpt from the book “Leadership is More – 27 Questions We Too Can Answer” written by Gianni, Jan & Marcello Liscia, 2022
