From an interview in The New York Times on June 9 with Jeffrey Immelt, CEO of GE:
"At one point in our conversation, I asked Immelt how he balanced the need to be building consensus with the need to make a firm decision and, in effect, show who’s boss. It struck me as a tricky issue, and it was clearly one he had thought about a lot.
“When you run General Electric,” he said, “there are 7 to 12 times a year when you have to say, ‘you’re doing it my way.’ If you do it 18 times, the good people will leave. If you do it 3 times, the company falls apart. You want a team of leaders who are self-confident. But in the end it is not a democracy. There has to be clarity about decisions.”
Consider as well this quote of Immelt’s, spoken nearly six years ago when he first assumed the position of CEO: He observed that his predecessor, Jack Welch, had made G.E. “faster-moving and more entrepreneurial. But it doesn’t have the heart it needs, and it doesn’t have the context it needs. That is what I want to do in the next 20 years.”
"Heart." "Context." A 20-year perspective. Most of all, the confidence—the reporter describes Immelt as "comfortable in his own skin"—to know how often to insist on doing it your way and when instead to bend to the forces of prevailing opinion.
I submit that these ingredients are, if not the entire template, essential perspectives for a Managing Partner.
The art—and it’s surely not science—of being the Managing Partner is far more about culture than it is about economics. [Permit me to clarify: Getting the economics right is de rigueur, but it’s table stakes; getting the culture right is what you get paid handsomely for. Analogize it to winning a desirable new client: You don’t win because your lawyers are so talented (in your league, everyone’s are); you win because there seems to be a "fit" between the client’s firm and yours.]
Now let’s break these down a bit.
Heart
Who is your firm? What animates it? What makes people want to come into the office in the morning? What do they believe they are doing if they say they are doing something "for" the firm, or that they do something a certain way because "that’s the way we do it around here?"
What, in short, does your firm stand for and what makes it different?
Can you articulate the answers to these questions? Can your senior lieutenants? Can junior associates and staff? If not, you need to re-examine your "heart" quotient.
Context
Who’s your competition? Are you growing where you want to be? And are you retrenching where it makes sense to invest less? What will your key clients’ business look like in 5 years or 10? Are you anticipating changes in their legal portfolios of risk and demand so that your firm will be in as strong a position to serve them tomorrow as you seem to be today? Are you developing lawyers for your firm’s tomorrow? And will they have the capabilities you anticipate needing?
Not only are your clients evolving, so are your competitors. Indeed, the Darwinian exigencies of capitalism generally mean that competitive advantages are, if not fleeting, marked with an indelible half-life. Don’t assume that today’s strong practice areas are impregnable.
Change, of course, is not news; it comes with the territory. But the "change" that counts is not reacting on a hair-trigger to short-term events. Rather, this is where the 20-year perspective comes in: “Investors go through cycles where they don’t like conglomerates,†Mr. Immelt said. “But if you want to be a lasting company, you have to know how to be a multibusiness structure. If Google is going to be a 100-year-old company someday, it is going to have to learn to do more than search.â€
The 20-Year Perspective
As I mentioned, your firm may be shooting the lights out today in, say, private equity, but don’t imagine that you can play that suit forever. A primary part of your job is positioning the firm to win the next round of tricks, and the round after that.
Another word for this is: Legacy.
What will your legacy be?
Understand that your legacy cannot be everything you might want, and that, to judge by the models we have from our own Presidents, achievements in one area often seem to come at great cost in others. I am not about to recommend one or two of these as consummately superior—in retrospect, each has remarkable flaws—but consider the alternatives we’ve experienced. Which most resembles what you’d like to be remembered for?
Revolutionary, century-changing initiatives—but ones still divisive generations later—a la FDR?
Steady at the helm Eisenhower?
Vast inchoate promise, to some extent fulfilled by successors, a la JFK?
Game-changing achievements in one sphere (Civil Rights, the Great Society) at the price of abject failure in others (Vietnam, inflation): LBJ?
A firm pole-star ideology, and a hands-off management style: Reagan?
Undeniable brilliance and world-class charisma, combined with personally self-indulgent if not self-destructive propensities, a la Clinton?
Whatever your style and predisposition (and you can’t change your constitution or temperament), you need to select an over-arching agenda for your tenure, and stick with it.
Decisiveness
Finally, the most ineffable ingredient: When to put your foot down and tell people we’re marching, and when not to. This without question is the subtlest challenge of all.
Instinctively, we recoil at the notion of a command-and-control environment, particularly given the reverence in which we hold the partnership ethos (rightly so). Yet study after study of how teams form, coalesce, and become effective demonstrates that the most in-effective and self-defeating approach to launching a new initiative is to "let a thousand flowers bloom" and seek consensus through opening the floor to all who wish to be heard. That way lies chaos.
Rather, to build a high-performance team requires a clear and concise—this means top-down—statement of the team’s objectives, why it’s now necessary, the promise of success, and the consequences of failure. This is not the moment for a Quaker meeting.
In Immelt’s tenure, that experience came when he introduced the notion of "green" to GE: What they now call their "ecomagination" initiative. Here’s how he describes it:
"Hence, his decision, for instance, to stress global infrastructure and health care, both businesses that G.E. knows a great deal about already, and which are growing much faster than the other parts of the world economy. And thus perhaps his most controversial bet: to build a huge business around the environment.
“The first time I brought the idea to the company’s executive council,” he said, “there was rapt silence. Some people saw it as wimpy, caving into the enviros. But I saw that we already had two-thirds of the company working in some way on environmental technology, like water scarcity. And I thought it was worth a swing.”
"The day before I interviewed Mr. Immelt, I saw him speak to a group of G.E. customers. “It was not universally loved by our customers and even less by employees,” he told them, referring to the company’s environmental thrust. “I have made a couple of hundred mistakes in my business life, but this isn’t one of them.” From a standing start, the ecomagination line of General Electric products has become a $10 billion business, a number the company expects to grow to $20 billion within three years."
As I read the subtext of this tale, the moral I derive is that it’s not really a "decision" with the all-important quality of "you’re doing it my way" unless you are actually swimming upstream. If your "decision" constitutes an endorsement of the status quo or the received wisdom, what can you actually claim to have decided? Put differently, this recalls the story of Lee Iacocca, who, when two lieutenants both agreed with him on something, peremptorily told them, "It looks like I don’t need one of you."
If your decisions as Managing Partner surprise no one, confound no one, seem counterintuitive to no one, ask yourself whether you’re actually deciding things. If not, you may be the one who’s not be needed.
