netrashetty
MP Guru
Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts, with offices in 30 countries. Bain is considered one of the most prestigious management consulting firms in the world,[1] and for eight consecutive years has been named the "Best Firm to Work For" by Consulting Magazine.[2]
While change may be the only constant in business today, few executives take comfort in it. Consolidation, reorganization, globalization and deregulation are reinventing our vision of the world and more importantly, our place in it. Stakeholder expectations are ever-rising, competitive advantage is obsolete in a nanosecond and the challenge to exceed expectations is enormous.
As some CEOs and CFOs struggle to cope through transition periods, others aim to lead through them. While the concept of leadership may seem "soft" in a technology-driven, results-oriented business climate, it can and it is making a difference at many companies. Importantly, effective leadership can open lines of communication at times when CEOs and other top managers need them most.
"As information moves up in a corporation, it often gets watered down by the time it gets to the CEO," says Charles M. Farkas, a director of Bain & Co. "If organizational culture prohibits people from saying what is working or not working, it's easy for a CEO to get cut off from what's really going on in the business."
Jack Weber, a consultant and University of Virginia professor, also underscores the importance of leadership during periods of change. "During any transition, people go through various emotional stages, and it's critical for CEOs and CFOs to be visible in their organizations, listening and speaking about change," Weber states. "If you don't address what people are thinking, you run the risk of negative communication in its absence."
Consultants preach it and executives pursue it, yet it's important to note that leadership has no magic formula. While there are principles that can enhance effectiveness, experts say there is no singular style of leadership that works at all organizations. Individual times and circumstances demand different solutions, and, by all accounts, leadership is an evolutionary process.
"One of the weaknesses I see when companies tap individuals for executive positions is a mentality of `who can do the job as effectively as the last CEO,"' says Farkas. "Too much of the focus is on who can do the old job best rather than who can lead the organization forward."
While styles and circumstances may vary, executives interviewed by Financial Executive agree on one thing: adding value is a critical aspect of leadership development. While opinions may differ, depending on organizational culture and industry-specific perspectives, the leadership challenge is one of preparing organizations for whatever obstacles and opportunities lie ahead.
Wells Fargo:
Teamwork and Self-Motivation
It is sometimes said that challenging circumstances create great leaders. But that hasn't always been the case in banking. In recent years, rigid management philosophies, ego-centered acquisitions and poorly integrated mergers have undermined many of the largest and seemingly most innovative financial institutions. In contrast, San Francisco-based Wells Fargo & Co. seems to have managed change adroitly.
Lauded by Fortune magazine as one of the nation's most admired companies, the "new" Wells Fargo -- the 1998 union of the former Wells and Minneapolis-based Norwest Corp. - has thrived under the leadership of CEO Richard Kovacevich. Among its honors last year: most admired U.S. commercial bank and second-most admired bank globally, according to Fortune, best bank for valuing customers' time, according to Forbes; and best bank in the U.S., according to SmartMoney.
But accolades like these weren't always a given. Initially, many analysts and others questioned the Norwest/Wells alliance, wondering whether Wells' integration errors of the past would haunt it once again. Indeed, the former Wells' earlier union with California-based First Interstate Bancorp created an exodus of valued customers and employees. But Kovacevich instituted what many describe as an inclusive, commonsense management style - specifically, a leadership approach that rewards self-motivation, teamwork and superior execution. Kovacevich and his team also fostered an openness in shaping the best of both worlds in the emerging Wells' combined culture.
The financial results that followed speak for themselves. In 2000, loans and revenues across the company's 23-state banking franchise grew 13 percent and 9 percent, respectively, while wholesale banking grew its loan volume 15 percent. Consumer finance hiked receivables 20 percent, and Wells' mortgage company regained its prominent ranking in both loan originations and loan servicing. In demographically attractive but highly competitive California, product sales rose 22 percent, while loans and revenues each increased 16 percent.
So, how does Wells motivate its 117,000 team members to achieve such results? While the company doesn't jump onto every financial services fad, it doesn't walk or talk like a traditional commercial bank, either. For example, when Kovacevich calls Wells Fargo branches "stores," he isn't trying to be trendy for analysts or the press - he means stores, and the types of business development strategies that you would expect to find at a retail establishment.
Moreover, Kovacevich doesn't try to reinvent the wheel from a product standpoint, focusing his company's energies instead on sales and service - areas where Wells can make a clearer mark. Importantly, he invites a spirit of inclusiveness throughout the organization. This is one CEO who doesn't believe that the only great ideas come from the executive suite.
"I think leadership begins with a genuine respect for the people who work with you, that they have unique talents and they want to do the right thing," says Kovacevich, at one time a marketing executive for General Mills and a consumer bank specialist with Citicorp. "At Wells Fargo, we want to be sure that we create an environment where the unique talents of our people are allowed to blossom. For example, instead of embracing a hierarchical attitude where it is assumed that the more steps you are up the corporate ladder, the better you are, it's just the opposite here."
Wells also believes that leadership is critical at all levels. "It isn't just about one leader or a few leaders," Kovacevich states. "Part of great leadership is to believe and to express that leadership is an important ingredient throughout the company. The manager of one of our stores is a leader. The head teller is a leader, too. If you treasure leadership and truly believe that it is the key to success, you will have more leaders. You can't have a decentralized organization and not have good leaders."
Another important facet of leadership entails collaborative career planning, which includes continuing education, ongoing training opportunities and coaching. While Wells Fargo encompasses wide geographic and product areas and has decentralized much of its decision-making, Kovacevich maintains that leadership emanates from a unified corporate culture as well. "The shared vision and articulation of common values - that's what keeps us together as we've broadened the scope of what our company is today," Kovacevich says.
Simultaneously, the CEO is an advocate of workplace diversity and employing individuals with complementary skills. At many companies, however, the tendency is to hire within one's own image. Says Kovacevich, "If you had a football team of all All-American quarterbacks, you wouldn't win - in fact, you'd probably get killed. Diversity is important because it brings to your attention solutions that you may not have considered before. In my opinion, it actually enhances the company's ability to do well."
A key element of Kovacevich's leadership style during industry-wide transition is his pragmatism and willingness to call it like it is. Peers acknowledge his ability to delineate strategy and focus his people on execution of key goals. For example, in this year's annual report, Kovacevich accentuates the importance of quality customer service. While acknowledging the company's accomplishments - successful conversions, revenue and profit growth, no broad deterioration of customer service - he also issues a challenge: Can a company that wants to be great get there with average customer service?
He stresses that it costs the company five times as much to add new customers as it does to keep current ones. In other words, every 2 percent of customers the company keeps is equal to cutting costs 10 percent. In an industry bent on costcutting, numbers like these underscore the value of superior customer service.
"If you're going to grow into an organization with a broad set of services and a broad geographic scope, you have to be willing to expand your thinking beyond your operating style of the past," Kovacevich says. "While it's more comfortable to revert back to what's easier to do, you have to be willing to enhance your company's ability to do well in differing circumstances."
Northrop Grumman: Adapting to Change
A consolidation-oriented environment is also a reality for Northrop Grumman Corp., the $15 billion global aerospace and defense company headquartered in Los Angeles. With 80,000 employees and operations in 44 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial users, providing technologically advanced products, services and solutions in defense and commercial electronics, systems integration, information technology and non-nuclear-powered shipbuilding and systems.
As a self-described "broad-based enterprise" that can "meet the demands of both the defense and commercial aerospace environment," Northrop Grumman plays a major role in some of the world's most advanced weapons systems and technologies.
This past spring, Northrop Grumman was much in the news, announcing in May a $2.1 billion unsolicited bid for Virginia-based Newport News Shipbuilding Inc. Northrop Grumman's bid followed General Dynamics Corp.'s April announcement of its plan to buy Newport News. As of press time, no final winner had been determined.
Mergers and cutbacks have been a common theme in the defense industry, especially with the end of the Cold War. In addition to consolidation, shifting government spending priorities have also altered the competitive dynamics for companies such as Northrop Grumman.
"In recent years, it hasn't been business as usual," agrees Richard B. Waugh Jr., the company's CFO since 1993. "Our industry has gone through considerable consolidation, and the companies that have survived have much more of an awareness of management's obligation to grow shareholder value. Ultimately, if you're not growing shareholder value, you're not growing a healthy company." While many corporations have sought to grow shareholder value via acquisitions, only to stumble in the subsequent integration, Waugh says that the process of building shareholder value at Northrop Grumman involves leadership and self-discipline in defining and executing organizational strategies . For example, in consolidation-- oriented environments, acquisition opportunities may be simultaneously attractive to several potential suitors. "From a leadership standpoint, you have to maintain your focus on what fits your objectives," Waugh notes. "You cannot be so enamored with attaining one particular target that you lose sight of other organizational priorities."
That also means being disciplined in integrating acquisitions and assimilating corporate cultures into the Northrop Grumman fold. "Our style is to amalgamate our colleagues into Northrop Grumman, and I think that over the years, we've brought the best of various cultures together to make the company what it is today," Waugh asserts.
M&A work isn't the only focus of Waugh's energies. In addition to financial reporting and investment community contact that accompanies the role of CFO at a large, publicly traded corporation, Waugh recognizes the importance of hiring. "We believe it's important to hire self-- starters and give them the opportunity to work on real challenges, with strong internal processes and appropriate oversight and developing good people," Waugh says. "We also believe it's important to recognize those people who exemplify integrity and intelligence in addressing challenges by making key, reasoned judgments."
Waugh, who joined the company in 1978, was previously corporate vice president/taxes, risk management and business analysis. In keeping with leadership development initiatives, he believes it benefits organizational and individual professionalism when executives are involved in community and professional associations. Having earned accounting and law degrees from Ohio State University, Waugh has been active throughout his career in various associations, among them FEI, the American and California bar associations, and the American Institute of Certified Public Accountants.
Above all, Waugh says, effective leadership through industry-sector changes is best exemplified in day-- to-day-interactions with colleagues. "Influencing others by reason - not by intimidation - and showing genuine respect for the opinions of others creates an environment where you can tap the best solutions that capable people have to offer within your organization."
living systems: Supporting Employees
To say that technology is constantly changing is an understatement. Leadership can emerge as a critical key in setting the organizational pace and tone for business development, discipline and fortitude for those companies that want to make a lasting mark. living systems, a privately held, five-year-old German software company headed by CEO and cofounder Kurt Kammerer, is making an impression in the field of e-commerce. Earlier this year, he was honored as a "Technology Pioneer" by the World Economic Forum, and Fortune magazine profiled Kammerer in May as one of its "Next Generation Global Leaders."
At the heart of Kammerer's business is software that uses intelligent agents to arrange business transactions online. While the technology has been a source of interest for quite some time, Kammerer's 330-- employee company has actually come up with real-world uses for it, putting together online marketplaces for several industry disciplines. In an e-mail interview, Kammerer says that leadership is key to the company's ongoing development.
"living systems' success is built on employee technical competence and a company culture that is built on fairness, trust, individual skills, teamwork, ambition and mutual respect - what we call the `living spirit,"' Kammerer says. "To keep this spirit alive requires that everyone - not just me - assume leadership roles in the company."
For example, Kammerer says the company has created what it calls the "living ideas" database to give employees the opportunity to post and share suggestions on a variety of company, customer and technology issues. "We've taken the company suggestion box of the 20th century to the 21st century," Kammerer says. "The living ideas database can be used by our 330 employees worldwide. It allows employees to publicly share with their colleagues and management new ideas and concepts that will give us a competitive edge. And it is structured to give employees feedback and provide a process for idea escalation."
Kammerer says the idea-sharing represents the company's fundamental approach to discerning new opportunities through its employees - and that it has consistently contributed key elements to living systems' business strategy and product development. Says Kammerer, "That's leadership from the ground up."
Open communication and accessibility are also vital to living systems' success. Kammerer says the company has a program of weekly, worldwide company-wide updates and an annual company-wide meeting for all employees. Moreover, management is available via phone or e-mail to address questions and business issues. Summing up the leadership style at living systems, says Kammerer, is pretty simple: "It's giving employees the support they need to succeed."
Phillips Industries: Private Challenges
Leadership through marketplace transition isn't just a concern for large publicly traded companies or highly visible technology firms. It is also a major issue for privately held companies that are seeking to add value to their businesses. So it is for vice president and CFO Brian Ruttencutter of Phillips Industries Inc., Santa Fe Springs, Calif.
Phillips is a privately owned manufacturer and distributor of electrical cables, wire harness assemblies, connectors and other parts for the heavy-duty trucking industry - an industry that has seen its share of competitive change in recent years. Instead of focusing strictly on the numbers, Ruttencutter also believes it is his responsibility as a manager within Phillips to help create "a dynamic and professional work environment that encourages high standards and provides our people with the tools to do an outstanding job." He believes it's important to create a setting where people have the latitude to demonstrate their abilities and where regular communication is welcomed.
Ruttencutter says he has seen the role of CFO change over the years within various industries to one of supporting the CEO and other line managers in their business development and decision-making strategies . "While it may not be the case in every company, I think we've seen a shift in responsibilities over time," Ruttencutter states. "I think the days of the CFO being nothing more than a financial reporter are falling by the wayside."
Nowadays, Ruttencutter says there's more of a tendency for the CFO to be involved in strategic vision and to have a greater operational perspective than ever before. He says participation in various professional associations like FEI - he's a past president of the Orange County Chapter - promotes a sense of camaraderie and a sharing of ways to lead through transition. Ruttencutter adds that it's important for managers to take the time to communicate with their counterparts and with customers and vendors to understand the impact of changes affecting one's industry or company and how managers can address new challenges effectively.
"You have to have the fundamentals - good planning and forecasting techniques - but you also must be responsive to the needs of your various constituencies," Ruttencutter concludes. "In times of change, you have to keep the lines of communication open. People tend to live up or down to the standards imposed upon them."
While change may be the only constant in business today, few executives take comfort in it. Consolidation, reorganization, globalization and deregulation are reinventing our vision of the world and more importantly, our place in it. Stakeholder expectations are ever-rising, competitive advantage is obsolete in a nanosecond and the challenge to exceed expectations is enormous.
As some CEOs and CFOs struggle to cope through transition periods, others aim to lead through them. While the concept of leadership may seem "soft" in a technology-driven, results-oriented business climate, it can and it is making a difference at many companies. Importantly, effective leadership can open lines of communication at times when CEOs and other top managers need them most.
"As information moves up in a corporation, it often gets watered down by the time it gets to the CEO," says Charles M. Farkas, a director of Bain & Co. "If organizational culture prohibits people from saying what is working or not working, it's easy for a CEO to get cut off from what's really going on in the business."
Jack Weber, a consultant and University of Virginia professor, also underscores the importance of leadership during periods of change. "During any transition, people go through various emotional stages, and it's critical for CEOs and CFOs to be visible in their organizations, listening and speaking about change," Weber states. "If you don't address what people are thinking, you run the risk of negative communication in its absence."
Consultants preach it and executives pursue it, yet it's important to note that leadership has no magic formula. While there are principles that can enhance effectiveness, experts say there is no singular style of leadership that works at all organizations. Individual times and circumstances demand different solutions, and, by all accounts, leadership is an evolutionary process.
"One of the weaknesses I see when companies tap individuals for executive positions is a mentality of `who can do the job as effectively as the last CEO,"' says Farkas. "Too much of the focus is on who can do the old job best rather than who can lead the organization forward."
While styles and circumstances may vary, executives interviewed by Financial Executive agree on one thing: adding value is a critical aspect of leadership development. While opinions may differ, depending on organizational culture and industry-specific perspectives, the leadership challenge is one of preparing organizations for whatever obstacles and opportunities lie ahead.
Wells Fargo:
Teamwork and Self-Motivation
It is sometimes said that challenging circumstances create great leaders. But that hasn't always been the case in banking. In recent years, rigid management philosophies, ego-centered acquisitions and poorly integrated mergers have undermined many of the largest and seemingly most innovative financial institutions. In contrast, San Francisco-based Wells Fargo & Co. seems to have managed change adroitly.
Lauded by Fortune magazine as one of the nation's most admired companies, the "new" Wells Fargo -- the 1998 union of the former Wells and Minneapolis-based Norwest Corp. - has thrived under the leadership of CEO Richard Kovacevich. Among its honors last year: most admired U.S. commercial bank and second-most admired bank globally, according to Fortune, best bank for valuing customers' time, according to Forbes; and best bank in the U.S., according to SmartMoney.
But accolades like these weren't always a given. Initially, many analysts and others questioned the Norwest/Wells alliance, wondering whether Wells' integration errors of the past would haunt it once again. Indeed, the former Wells' earlier union with California-based First Interstate Bancorp created an exodus of valued customers and employees. But Kovacevich instituted what many describe as an inclusive, commonsense management style - specifically, a leadership approach that rewards self-motivation, teamwork and superior execution. Kovacevich and his team also fostered an openness in shaping the best of both worlds in the emerging Wells' combined culture.
The financial results that followed speak for themselves. In 2000, loans and revenues across the company's 23-state banking franchise grew 13 percent and 9 percent, respectively, while wholesale banking grew its loan volume 15 percent. Consumer finance hiked receivables 20 percent, and Wells' mortgage company regained its prominent ranking in both loan originations and loan servicing. In demographically attractive but highly competitive California, product sales rose 22 percent, while loans and revenues each increased 16 percent.
So, how does Wells motivate its 117,000 team members to achieve such results? While the company doesn't jump onto every financial services fad, it doesn't walk or talk like a traditional commercial bank, either. For example, when Kovacevich calls Wells Fargo branches "stores," he isn't trying to be trendy for analysts or the press - he means stores, and the types of business development strategies that you would expect to find at a retail establishment.
Moreover, Kovacevich doesn't try to reinvent the wheel from a product standpoint, focusing his company's energies instead on sales and service - areas where Wells can make a clearer mark. Importantly, he invites a spirit of inclusiveness throughout the organization. This is one CEO who doesn't believe that the only great ideas come from the executive suite.
"I think leadership begins with a genuine respect for the people who work with you, that they have unique talents and they want to do the right thing," says Kovacevich, at one time a marketing executive for General Mills and a consumer bank specialist with Citicorp. "At Wells Fargo, we want to be sure that we create an environment where the unique talents of our people are allowed to blossom. For example, instead of embracing a hierarchical attitude where it is assumed that the more steps you are up the corporate ladder, the better you are, it's just the opposite here."
Wells also believes that leadership is critical at all levels. "It isn't just about one leader or a few leaders," Kovacevich states. "Part of great leadership is to believe and to express that leadership is an important ingredient throughout the company. The manager of one of our stores is a leader. The head teller is a leader, too. If you treasure leadership and truly believe that it is the key to success, you will have more leaders. You can't have a decentralized organization and not have good leaders."
Another important facet of leadership entails collaborative career planning, which includes continuing education, ongoing training opportunities and coaching. While Wells Fargo encompasses wide geographic and product areas and has decentralized much of its decision-making, Kovacevich maintains that leadership emanates from a unified corporate culture as well. "The shared vision and articulation of common values - that's what keeps us together as we've broadened the scope of what our company is today," Kovacevich says.
Simultaneously, the CEO is an advocate of workplace diversity and employing individuals with complementary skills. At many companies, however, the tendency is to hire within one's own image. Says Kovacevich, "If you had a football team of all All-American quarterbacks, you wouldn't win - in fact, you'd probably get killed. Diversity is important because it brings to your attention solutions that you may not have considered before. In my opinion, it actually enhances the company's ability to do well."
A key element of Kovacevich's leadership style during industry-wide transition is his pragmatism and willingness to call it like it is. Peers acknowledge his ability to delineate strategy and focus his people on execution of key goals. For example, in this year's annual report, Kovacevich accentuates the importance of quality customer service. While acknowledging the company's accomplishments - successful conversions, revenue and profit growth, no broad deterioration of customer service - he also issues a challenge: Can a company that wants to be great get there with average customer service?
He stresses that it costs the company five times as much to add new customers as it does to keep current ones. In other words, every 2 percent of customers the company keeps is equal to cutting costs 10 percent. In an industry bent on costcutting, numbers like these underscore the value of superior customer service.
"If you're going to grow into an organization with a broad set of services and a broad geographic scope, you have to be willing to expand your thinking beyond your operating style of the past," Kovacevich says. "While it's more comfortable to revert back to what's easier to do, you have to be willing to enhance your company's ability to do well in differing circumstances."
Northrop Grumman: Adapting to Change
A consolidation-oriented environment is also a reality for Northrop Grumman Corp., the $15 billion global aerospace and defense company headquartered in Los Angeles. With 80,000 employees and operations in 44 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial users, providing technologically advanced products, services and solutions in defense and commercial electronics, systems integration, information technology and non-nuclear-powered shipbuilding and systems.
As a self-described "broad-based enterprise" that can "meet the demands of both the defense and commercial aerospace environment," Northrop Grumman plays a major role in some of the world's most advanced weapons systems and technologies.
This past spring, Northrop Grumman was much in the news, announcing in May a $2.1 billion unsolicited bid for Virginia-based Newport News Shipbuilding Inc. Northrop Grumman's bid followed General Dynamics Corp.'s April announcement of its plan to buy Newport News. As of press time, no final winner had been determined.
Mergers and cutbacks have been a common theme in the defense industry, especially with the end of the Cold War. In addition to consolidation, shifting government spending priorities have also altered the competitive dynamics for companies such as Northrop Grumman.
"In recent years, it hasn't been business as usual," agrees Richard B. Waugh Jr., the company's CFO since 1993. "Our industry has gone through considerable consolidation, and the companies that have survived have much more of an awareness of management's obligation to grow shareholder value. Ultimately, if you're not growing shareholder value, you're not growing a healthy company." While many corporations have sought to grow shareholder value via acquisitions, only to stumble in the subsequent integration, Waugh says that the process of building shareholder value at Northrop Grumman involves leadership and self-discipline in defining and executing organizational strategies . For example, in consolidation-- oriented environments, acquisition opportunities may be simultaneously attractive to several potential suitors. "From a leadership standpoint, you have to maintain your focus on what fits your objectives," Waugh notes. "You cannot be so enamored with attaining one particular target that you lose sight of other organizational priorities."
That also means being disciplined in integrating acquisitions and assimilating corporate cultures into the Northrop Grumman fold. "Our style is to amalgamate our colleagues into Northrop Grumman, and I think that over the years, we've brought the best of various cultures together to make the company what it is today," Waugh asserts.
M&A work isn't the only focus of Waugh's energies. In addition to financial reporting and investment community contact that accompanies the role of CFO at a large, publicly traded corporation, Waugh recognizes the importance of hiring. "We believe it's important to hire self-- starters and give them the opportunity to work on real challenges, with strong internal processes and appropriate oversight and developing good people," Waugh says. "We also believe it's important to recognize those people who exemplify integrity and intelligence in addressing challenges by making key, reasoned judgments."
Waugh, who joined the company in 1978, was previously corporate vice president/taxes, risk management and business analysis. In keeping with leadership development initiatives, he believes it benefits organizational and individual professionalism when executives are involved in community and professional associations. Having earned accounting and law degrees from Ohio State University, Waugh has been active throughout his career in various associations, among them FEI, the American and California bar associations, and the American Institute of Certified Public Accountants.
Above all, Waugh says, effective leadership through industry-sector changes is best exemplified in day-- to-day-interactions with colleagues. "Influencing others by reason - not by intimidation - and showing genuine respect for the opinions of others creates an environment where you can tap the best solutions that capable people have to offer within your organization."
living systems: Supporting Employees
To say that technology is constantly changing is an understatement. Leadership can emerge as a critical key in setting the organizational pace and tone for business development, discipline and fortitude for those companies that want to make a lasting mark. living systems, a privately held, five-year-old German software company headed by CEO and cofounder Kurt Kammerer, is making an impression in the field of e-commerce. Earlier this year, he was honored as a "Technology Pioneer" by the World Economic Forum, and Fortune magazine profiled Kammerer in May as one of its "Next Generation Global Leaders."
At the heart of Kammerer's business is software that uses intelligent agents to arrange business transactions online. While the technology has been a source of interest for quite some time, Kammerer's 330-- employee company has actually come up with real-world uses for it, putting together online marketplaces for several industry disciplines. In an e-mail interview, Kammerer says that leadership is key to the company's ongoing development.
"living systems' success is built on employee technical competence and a company culture that is built on fairness, trust, individual skills, teamwork, ambition and mutual respect - what we call the `living spirit,"' Kammerer says. "To keep this spirit alive requires that everyone - not just me - assume leadership roles in the company."
For example, Kammerer says the company has created what it calls the "living ideas" database to give employees the opportunity to post and share suggestions on a variety of company, customer and technology issues. "We've taken the company suggestion box of the 20th century to the 21st century," Kammerer says. "The living ideas database can be used by our 330 employees worldwide. It allows employees to publicly share with their colleagues and management new ideas and concepts that will give us a competitive edge. And it is structured to give employees feedback and provide a process for idea escalation."
Kammerer says the idea-sharing represents the company's fundamental approach to discerning new opportunities through its employees - and that it has consistently contributed key elements to living systems' business strategy and product development. Says Kammerer, "That's leadership from the ground up."
Open communication and accessibility are also vital to living systems' success. Kammerer says the company has a program of weekly, worldwide company-wide updates and an annual company-wide meeting for all employees. Moreover, management is available via phone or e-mail to address questions and business issues. Summing up the leadership style at living systems, says Kammerer, is pretty simple: "It's giving employees the support they need to succeed."
Phillips Industries: Private Challenges
Leadership through marketplace transition isn't just a concern for large publicly traded companies or highly visible technology firms. It is also a major issue for privately held companies that are seeking to add value to their businesses. So it is for vice president and CFO Brian Ruttencutter of Phillips Industries Inc., Santa Fe Springs, Calif.
Phillips is a privately owned manufacturer and distributor of electrical cables, wire harness assemblies, connectors and other parts for the heavy-duty trucking industry - an industry that has seen its share of competitive change in recent years. Instead of focusing strictly on the numbers, Ruttencutter also believes it is his responsibility as a manager within Phillips to help create "a dynamic and professional work environment that encourages high standards and provides our people with the tools to do an outstanding job." He believes it's important to create a setting where people have the latitude to demonstrate their abilities and where regular communication is welcomed.
Ruttencutter says he has seen the role of CFO change over the years within various industries to one of supporting the CEO and other line managers in their business development and decision-making strategies . "While it may not be the case in every company, I think we've seen a shift in responsibilities over time," Ruttencutter states. "I think the days of the CFO being nothing more than a financial reporter are falling by the wayside."
Nowadays, Ruttencutter says there's more of a tendency for the CFO to be involved in strategic vision and to have a greater operational perspective than ever before. He says participation in various professional associations like FEI - he's a past president of the Orange County Chapter - promotes a sense of camaraderie and a sharing of ways to lead through transition. Ruttencutter adds that it's important for managers to take the time to communicate with their counterparts and with customers and vendors to understand the impact of changes affecting one's industry or company and how managers can address new challenges effectively.
"You have to have the fundamentals - good planning and forecasting techniques - but you also must be responsive to the needs of your various constituencies," Ruttencutter concludes. "In times of change, you have to keep the lines of communication open. People tend to live up or down to the standards imposed upon them."