LEAD LIKE IKE Ten Business Strategies from the CEO of D-Day
By GEOFF LOFTUS
Thomas Nelson Copyright © 2010 Geoff Loftus
All right reserved. ISBN: 978-1-59555-085-9
Chapter One THE PRESSURE COOKER-START-UP
Forging a New Business to Face Staggering Competition
Let's start with a hypothetical case. Your company, Hypothetical Inc., has been plugging along in the good ole U.S.A. for decades. Most of your shareholders have been holding their stock quietly for years and seem to be perfectly content with the steady, if small, dividends. Since you have no substantial domestic competition, all is bliss-until a fearsome competitor looms over the Atlantic from Europe. A German-based company has emerged with global designs, a super-aggressive business plan, and almost complete control of the European market. This German company hasn't jumped the ocean yet to go after your market, but it's pretty clear it will as soon as it has consolidated its gains in Europe. Remember, the German company has global ambitions.
Hypothetical Inc.'s board of directors decides that the only way to counter the German company's plans is to form an alliance with companies in Britain and Russia and create a jointly owned subsidiary, based in England, to compete directly with the Germans for control of the European market. Hypothetical's board names you as the CEO of this subsidiary and sends you to London with these goals:
Build an organization from scratch that will compete successfully with the extremely successful German company that has almost absolute control of its market. Create a management structure for your brand-new organization. Oversee the hiring and training of a massive multicultural and multilingual workforce-eventually numbering more than three million. Do all of the above in twelve months-if it takes longer, Hypothetical Inc. may not survive. This is a daunting set of challenges, but you head off to England fully committed to delivering on them because you, like your board, are absolutely convinced that the very survival of your company is dependent on your success. Urgent as these problems are, they are not the worst aspects of your job as CEO. If you succeed in building this subsidiary in the severely limited time frame, you will be rewarded with a demotion. Before leaving the United States, it was made clear to you that a star executive from the parent company in the United States will replace you once the organization is ready. He will lead the effort against the German company-he will reap the fame and glory.
The prospect of getting to watch someone else succeed-thanks to all your hard work under extreme pressure-is not the worst of your problems. Your competition is incredibly well organized, is highly innovative, and has years of successful experience in executing its often daring strategies. And formidable as your competition is, your board of directors is a collection of overpowering personalities, is in complete disagreement about strategy, and has not empowered you to decide where and how to implement Hypothetical's plan of direct competition with the Germans.
If you are a normal human being, at this point in your career as CEO of Hypothetical's European subsidiary, you are well on your way to an ulcer or a drinking problem. Remember, you believe (as does your board) that if you fail, Hypothetical will go out of business. The value of company stock will disappear, devastating your large body of shareholders. There will be massive job losses, not only for your employees but also for those of your alliance partners in England and Russia. The ripple effect in the economies of your country and your alliance partners could be disastrous. No wonder that, as you head to London to take your post as the European subsidiary's CEO, you are feeling more than a little anxiety.
This hypothetical case more or less describes what Dwight D. Eisenhower faced as he became the CEO of an organization that, for simplicity's sake, we'll call D-Day Inc. No executive in history has ever had more skin in the game than Eisenhower.
If he failed in planning and building D-Day Inc., the failure would not be measured in devalued stock and unemployment. Failure would result in hundreds of thousands, possibly millions, of deaths.
* * *
On June 24, 1942, Dwight D. Eisenhower, CEO of D-Day Inc., arrived in England to start his new job.
It's hard to imagine any executive taking over a company with more pressure. His assignment was much more of a concept than an operational reality, but that didn't stop Ike's board from giving him a twelve-month deadline for launching the most ambitious business project ever: the cross-Channel invasion of the competition's territory. No organization had ever attempted such a large-scale project. No organization had ever faced tougher competition. The Germans had complete control of their European territory, short supply lines, and a robust industrial base supplying their operations. They had a large, well-trained, well-equipped, experienced workforce already in the field.
Ike also had to forge success despite amazingly low expectations for his personal success. A few months shy of his fifty-second birthday, when he became CEO for the first time, his entire thirty-year career with his company (the U.S. Army) had been spent in middle management. As you might expect from a career middle manager, Ike was seen as the perfect staff man-not true top-executive material-despite decades of experience and rave reviews from all of his superiors.
Now that he had reached the top spot, he was expected to build the organization and then hand over the job to the organization's next CEO-someone higher up in the parent company-who would take over D-Day Inc. once it was ready to launch operations. Someone more suited to the glories of successfully completing the most daunting business project ever.
Eisenhower was aware of all this and went into the job knowing that the accolades would go to someone else. He didn't care. His focus-his only focus-was to build an organization capable of penetrating the competition's territory and then taking every bit of it away, to free Europe from the clutches of the Germans. This invasion came to be known as Operation Overlord. After Overlord, D-Day Inc. would push through France, Belgium, and Holland into Germany itself.
D-Day Inc.'s board, however, wasn't unanimous about the best path to success. Some of the Brits, including Winston Churchill (who, from Ike's viewpoint, functioned as the lead director of the board), thought going into northern France was the wrong way to compete with the Germans. Churchill didn't completely buy into Operation Overlord until the final weeks before D-Day. Many of the senior British commanders agreed with Churchill. They felt that a gigantic cross-Channel project was out of the question. Better to launch smaller projects as soon as D-Day Inc.'s workforce could handle them. These smaller projects would be followed up cautiously, and Germany would be beaten through a course of slow and steady progress. Eisenhower, however, felt that doing smaller projects was a distraction and would delay the organization's completion of its true mission-seizing Europe from the Germans, which was only doable, in Ike's mind, by going through northern France.
The Germans, Ike reasoned, could afford to lose territory in North Africa or Italy or even in southern France. He considered Churchill's oft-mentioned plans of going through the Balkans to be a waste of time. Ike and the Americans on his board of directors believed that if you want to take down the competition, you have to attack the core of the business, not take out satellite operations that are not essential to the competition's survival. That meant D-Day Inc. had to go through northern France-the shortest route-into the industrial heartland of its German competitor.
When Eisenhower arrived to take charge of D-Day Inc., his board had given him a mixed set of directions. Prepare to go through northern France in a year (1943), but also get ready to launch a suicide initiative almost immediately (September 1942). Why the suicide project? FDR, Churchill, and the senior American and British commanders had one overriding fear: their alliance with the Soviet Union would collapse at any moment.
Since June 1941, only the Soviets had been competing directly with the Germans for territory in Europe. A massive share of America's industrial output, and that of Britain's as well, was going to support the Soviet effort. Everyone at D-Day Inc., from FDR on down, believed the Germans would get stronger if the Russians ceased to compete-and the Americans and Brits were aware the Russians had signed a noncompete agreement with the Germans before the war (the Molotov-Ribbentrop Pact in August 1939) and that at the rate the Soviets were suffering now, if the Germans offered a new noncompete agreement, there was a high likelihood of Soviet acceptance.
This fear of a Soviet collapse is what drove the creation of the suicide project, delicately named Operation Sledgehammer. If the Soviets suffered too many setbacks between Eisenhower's arrival in England in June and September, Ike was supposed to launch Sledgehammer to divert pressure from the Soviets and keep their massive workforce in direct competition with the Germans.
The only problem with Sledgehammer was that almost no one believed in it. It was almost impossible that Ike could launch anything three months after taking the CEO's job. The Americans and Brits didn't have sufficient resources-in personnel or supplies. Even if Sledgehammer was launched, there was no guarantee the Soviets wouldn't sign a noncompete anyway. And Sledgehammer, if activated, would cause unforeseeable delay in the main mission-the invasion of France.
Like many executives, Eisenhower found himself saddled with a directive that he had to accept and at least create a semblance of complying with. His only hope was that the competitive situation in Europe would never reach the point that it required him to launch Sledgehammer. (It didn't.)
Eisenhower arrived in England in late June 1942 with his mixed set of directives (go into France, but get ready to launch Sledgehammer too!); without the actual, in-place resources to accomplish his mission; and with an aggressively ambitious timeline for launching the project.
On his first day on the job, Ike set the tone he wanted for the organization. He met with the American staff he was inheriting and immediately stated their mission: build D-Day Inc. to be ready to go into France in a year's time.
He explained to his fellow Americans that they had to present an attitude of "determined enthusiasm and optimism." Ike made it clear that pessimism was out-any officer who couldn't handle the challenges without talking of defeat should leave. Ike also changed a fundamental way of doing business. From that moment on, the staff would take complete responsibility for solving its own problems instead of referring them to Washington. As he reported to his boss, General George C. Marshall, "No alibis or excuses will be acceptable."
As a young officer, Eisenhower had spent a great deal of time coaching football teams on army posts, and he emphasized the most important lesson of his football experience once he became the top executive: team first. He wanted a coordinated effort, not dazzling solo performances. In his experience, successful teams were the ones who pulled together with the players selflessly supporting each other. Stars and prima donnas were often successful through sheer brilliance, but brilliant performances are about as predictable, and as dependable, as the weather.
Despite his clarity on the themes of optimism and team first, Ike found that the staff in London was not particularly adaptive. The staff members were entrenched middle management-they heard what Eisenhower said, but like lots of middle managers who have survived a change in executive management, they were not particularly impressed. And Eisenhower-perceived by everyone (including himself) as an interim executive in charge of setting up the project and then handing it over to the "real" boss-didn't have the pull to fire and hire the people he wanted. He couldn't build the staff he needed. When officers left or were added to his staff, it was due to the normal course of rotation within the organization. Personnel decisions were being made for Ike thousands of miles away in Washington.
Historian and biographer Stephen Ambrose wrote, "Eisenhower forcibly impressed his presence on the staff," but Ike wasn't sure that wasn't part of the problem, saying, "Too many staff officers are merely pushing paper" and were coming to him for decisions. Eisenhower couldn't get the staff to stop pushing paper and decisions toward him, but he could take steps to make sure that his time was spent focused on the invasion project. He dumped almost all of the administration duties onto the extremely able Major General John C. H. Lee and freed himself to focus on strategy. There would be plenty of tiny details Ike needed to consider as he strived to meet his project's daunting one-year deadline, but he wanted to be sure they were the crucial details involved in executing the project, not the adminis-trivia of it.
In his first months on the job, Ike fought the perception of himself as a weak interim CEO and struggled mightily to get the British and the Americans back home to take his position seriously. Sure there was ego involved, but mostly Eisenhower was convinced he couldn't do the job properly if no one respected him. He even told off superiors in Washington when he felt they were being dismissive. When Washington approved the transfer of a man from one part of Ike's command to another without telling Ike, he fired off a letter to the general responsible, a man of higher rank and senior to Ike. Eisenhower firmly told the general that "'such a move involves only the authority of the theater commander,' and told him in the future to see to it that such assignments were made only to the theater commander." It took time, but with consistent and rational arguments, Ike began to convince one and all that the CEO of D-Day Inc. was a dead-earnest, serious position.
Of course, arriving with a one-year deadline, Ike couldn't just focus on his own position and his staff. The British Isles were about to be inundated with American servicemen, who would require housing and training facilities and a massive supply chain. With a twelve-month time frame, there was no time to waste.
One area-public relations-presented Eisenhower with an opportunity for quick success, and that success would have immense impact on almost all the other phases of his work. If Ike could generate favorable publicity, he would increase his credibility with his allies and with the folks back home, and that would help with the perception of his job and with the strategic decisions that were coming, and it would help American and British morale as the Yank workforce "invaded" England.
Ike didn't waste any time before leaping into the public relations arena. On June 25, 1942, his second day in England, he held a press conference. Before the conference he was an anonymous staff man; in Stephen Ambrose's words, "His role was more that of an administrator than a commander." After the conference, the spotlight remained intensely trained on him. His appointment as CEO was front-page news in Britain-the English did not need to be convinced that no organization was more important than D-Day Inc. for successful competition with the Germans. And the man himself was a natural. He was blunt about the difficulties facing the organization but always optimistic. He let his passion for the project show-no one was in any doubt that he meant to beat the Germans completely and totally. And, hard as it is to believe in our modern era of "gotcha journalism," Ike trusted the press, referring to them as "quasi members of my staff."
There was one more important ingredient in Eisenhower's successful public relations plan-there was no ego in it. He spent no time on self-aggrandizing. Ike was committed to beating his competition, and he believed that the only way to do that was with an Allied organization. He knew that when D-Day itself came, Americans wouldn't be the only ones going into German territory. Success was utterly dependent on the Allies, and Ike used the press to push Allied unity constantly. The press couldn't get enough stories on him, and almost every single story had a positive angle on the Allies because that's the drum Eisenhower beat.
Excerpted from LEAD LIKE IKE by GEOFF LOFTUS Copyright © 2010 by Geoff Loftus. Excerpted by permission.
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