The external environment is always changing, creating new challenges and new opportunities at every turn. Additionally, there must be another law of physics that over time even reformed bureaucracies are magnetically drawn back toward their natural state: torpor, complacency, protecting the status quo, inertia, and inefficiency. The most successful businesses continuously reinvent themselves, never resting on their successes. Just look at companies like IBM led by Ginni Rometty, Apple under Steve Jobs and Tim Cook, Amazon and Jeff Bezos, or General Electric under Jeffrey Immelt. But after a period of reform and change, too many organizations in the private sector and nearly all in the public sector fall prey to that putative law of physics: they tend to get comfortable with the new status quo and defend it as passionately as they did the old way of doing things. That means a leader must always have an unfinished agenda in a continuing quest for excellence and success. Like the legendary captain of the ghost ship the Flying Dutchman, the reformer never makes port.
The leader of an organization is the engine of change and reform, and his work is never done. If his yellow tablet keeps filling up with ideas, he should keep on truckin’. But if a leader cannot sustain his enthusiasm, energy, and creativity to keep making his institution better, he needs to step aside for someone who can.
Whether leading a bureaucracy for a short time or a long time, the reformer must never lose his zeal for continuing improvement. As he implements his initial agenda for change, he must also be cognizant of changes going on externally—and backsliding internally—and always adding to his to-do list. He must constantly stir the pot in the search for ways his organization can do its job better. He must be disruptive.
A good leader must keep coming up with new perspectives, new ideas, new improvements. I have served on the board of directors of companies where the person in charge has been doing the job for decades and is still the most restless, energetic, and innovative person in the company. A leader has to keep listening, remain open-minded toward new ideas from others, always be on the hunt for better ways to get the job done. She has to keep reinventing herself as well as the organization. She has to look hard in the mirror to be sure she is still hungry enough to lead. Only a committed leader can keep an organization—a bureaucracy—on its toes, continuously adapting, innovating, improving. She has to be continually evaluating subordinates, sending away those she hired who have flagged and who can lift their organization no further, and hiring new potential leaders to restoke the fires of enthusiasm and performance.
At the CIA, I began with fourteen task forces but within weeks saw the need for even more far-reaching change and added ten more areas in need of reform. I returned to Texas A&M from every vacation with a yellow tablet filled with notes on additional changes I thought were needed and on ways to improve on what we were already doing. When given a significant extension as secretary of defense by President Obama, I worked with my team long and hard on “Gates 2.0”—what I was going to do with the additional time I had been given in terms of internal changes and reforms. When I left as DCI and president of Texas A&M, I was just getting warmed up in terms of additional reforms and changes. I worked on such an agenda at Defense for two and a half years before deciding the time had come to pass the baton to a fresh runner.
The best business leaders are always searching for new concepts, new products, new ways of doing business. Brinker International, which owns the Chili’s restaurant chain and others (and where I served on the board), proudly displays in the foyer of its headquarters the logos of a number of restaurant brands it has bought and subsequently sold—evidence of the continuing search for innovative concepts and new approaches to expanding the business and a willingness to walk away from unsuccessful initiatives. For nine years, I was an independent trustee (board member) of Fidelity mutual funds, a huge enterprise whose parent organization, led by Ned Johnson, was always testing new investment ideas as well as better ways to serve customers. Johnson’s vision, for example, led Fidelity to invest massively many years ago in building the support structure to manage 401(k) investment plans for other companies, and to this day it continues to hold the biggest market share in that business. Who would have thought that Starbucks, a coffee company, would pioneer the use of mobile phone order and pay in a retail environment? Successful business leaders are never satisfied with the status quo. Time and again, at the end of a company’s best year ever, I have seen perpetually discontented CEOs warn their boards and employees against complacency and demand new ideas for change and growth.
An acid test for a leader when deciding whether to go or stay is whether he can critically assess the changes he has implemented—his ideas—and see ways to improve upon them. If he can cycle back after considerable time in the job and be as tough and objective judging his own handiwork as he has judged that of others, then he probably still has the moxie to continue. If a leader finds himself defending the status quo he created, if he can’t look at the people he appointed to senior positions and critically assess whether they are growing and getting stronger and leading effectively or topped out, if he looks at what he has done and those he has appointed and pronounces all is fine and dandy, it’s almost certainly time to move on.
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The first and continuing responsibility of the leader is to understand the implications of a changing environment for his organization, to anticipate new needs, and to keep developing fresh strategies. The leader’s second important responsibility is to look for ways to continuously make the organization more user-friendly, more efficient, and more cost-effective.
Once a leader has carried out his initial set of reforms, often to correct obvious problems, how should he decide what needs to be done next? What should his second act look like? Part of the answer to that is easy: there will always be new problems, and external circumstances will always be changing. His challenge is to figure out how to constantly adapt the organization in response.
A leader in both the public and the private sectors today faces an unprecedented pace of change in technology, workplace culture, customer expectations, and the political and business environment. Particularly as government—local, state, and federal—intrudes further into people’s daily lives, their impatience with cumbersome, unresponsive, rigid, and frustrating bureaucracies will only grow. Adapting to this new world is a huge problem for public sector bureaucracies, as we saw so vividly in the scandals surrounding the Department of Veterans Affairs in 2014, the online rollout of ObamaCare, and the response to Hurricanes Katrina and Sandy. That list of unsatisfactory governmental performance is, to vastly understate, incomplete.
In a fast-changing world, the CIA’s priority targets for intelligence collection must be adjusted constantly, and the techniques for doing so altered to reflect new technologies and new circumstances. The CIA was slow in detecting the emergence of Islamic fundamentalism in the late 1970s and failed to predict the Iranian Revolution—or the consequent sudden loss of technical collection sites in the northern part of Iran vital to tracking Soviet missile developments, capabilities we quickly recovered through an unprecedented partnership with China. As we moved beyond the Cold War, information about the new threats America faced was often not to be found on the diplomatic circuit, so the CIA had to significantly increase the use of men and women operating independently of U.S. government organizations. The wars in Iraq and Afghanistan led to radically new ways to fuse real-time intelligence and military operations in a virtuous cycle. At the end of 2013, the situation in eastern Ukraine was probably not high on the CIA’s list; just a few months later, it was likely near the top. Same thing with the emergence of the Islamic State terrorist group in Syria and Iraq. In the world of intelligence, adaptability is critical.
It’s similar for the military. The record of both civilian and military leaders over the past forty years in predicting where we would use force next—or even within the ensuing six months—has been perfect: we have never once gotten it right. Not in Grenada, Haiti, the
Balkans, Somalia, Panama, Iraq (three times—1991, 2003, and 2014), Libya, or Afghanistan. As tensions heat up with Russia over Ukraine and with China over the South and East China Seas, we will need to rely on the most modern combat capabilities, hopefully only for deterrence. And as the threat of violent Islam spreads to Nigeria, Kenya, Mali, and elsewhere in Africa, the training and equipment required will be very different from that needed to deal with the militaries of large nation-states. Thus the need for adaptable military capabilities.
Even in a university, new academic programs, new technologies, new financial challenges, the changing needs and interests of students, and the question of whether most four-year degrees are worth the cost require an organizational and conceptual agility now and in the future unheard of in earlier decades.
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To better carry out the second task of making the organization more user-friendly, more efficient, and more cost-effective, over the years I saw experiments with one fad after another. Management by objective. Zero-based budgeting. Benchmarking. My approach is simpler and draws on techniques I described earlier. The leader should keep his eye focused on the mission of the organization and remember that it is the people working for him who deliver that mission. He should ask those on the front lines, those who interact with the public or other customers, to identify obstacles to getting their jobs done better and more efficiently.
The Japanese some time ago developed a business practice called kaizen, which basically means continuing change for the better in all aspects of an organization—engineering, information technology, financial, commercial, customer service, and manufacturing. Many companies around the world have adopted the practice, which includes a very open process encouraging suggestions for improvements large and small from employees at every level, including especially on the shop floor—the folks on the front lines. Developed for business, the concept of kaizen seems to me to have equal value for public sector bureaucracies as well.
The central idea behind kaizen is very important: understanding that everything in an organization can always be improved and that people at every level can make a contribution. It is in keeping with my view that the reformer’s work is never done. How do you instill in a bureaucracy this notion of ongoing and dynamic change, which is so alien to bureaucratic culture?
As with the Japanese use of kaizen, a leader should provide incentives for his employees to come up with ideas on how to improve performance. She shouldn’t just put up a suggestion box. She needs to get people at all levels thinking and working as a team—not just in the old rhetorical, locker-room way, but in the way they work together every day. Leaders need to break down silos and stovepipes and get people thinking beyond their own narrow piece of the action, get them thinking about how the organization as a whole can do better. People need to be incentivized to think “outside their lane.”
Managers at all levels should regularly sit down with their folks and talk about ways to do the work more efficiently and better serve the public—the customer. Those managers must be held accountable for continuously seeking out ideas for improvement and implementing those ideas. A leader must publicly recognize and reward employees and managers whose suggestions are implemented. As I said earlier, it is not systems that deliver the mission but people. Using techniques I have described, a leader has to get them on board in his effort to constantly challenge the status quo.
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When it comes to management techniques for improving performance, one familiar slogan is to “measure what you value and value what you measure.” Used properly, metrics can be invaluable in tracking and evaluating performance in myriad categories. However, in my experience, the danger is that people get so focused on successful statistical outcomes they fail to see how excessive reliance on numbers can distort reality and lead to unintended consequences.
Because U.S. military headquarters in Vietnam decided the number of enemy killed was an important indicator of success during the war, getting that number as high as possible led to exaggerated body counts and often counting civilian casualties as enemy deaths. These, in turn, misled senior officials into thinking we were doing better than we actually were. In too many universities, the worthwhile objective of increasing minority enrollment often led to a numbers game, where the premium was on the number of such kids admitted with little attention to the likelihood of their being able to graduate. Universities and colleges also manipulate statistics and definitions in order to improve their standing in the rankings. Even the Boy Scouts suffered when, more than twenty years ago, so much emphasis was placed on increasing membership that some Scout councils engaged in fraudulent practices with regard to enrollments just to get the numbers up and be suitably rewarded. Everyone is familiar with complaints about standardized testing in schools as a means to evaluate student progress and teachers, thus leading the latter to “teach to the test” rather than more broadly educating students. In the air force, the demand for near-perfect test scores by airmen in the ICBM force led to widely publicized cheating scandals. In the VA system, numbers were fudged to show that veterans were getting appointments within the fourteen-day goal set by the leadership when, in fact, they were not. And, as I wrote in Duty, the military health-care system cited numerous statistical analyses to demonstrate that changing the medevac time in Afghanistan from two hours to one hour wouldn’t really matter in terms of survival rates—while ignoring the impact on morale of the soldiers and marines on the front lines. By the same token, in many areas of business, whether in manufacturing or services, increasing gross numbers—in sales or other categories—can mask a decline in quality that endangers the brand (as happened with U.S. car manufacturers in the 1970s–80s).
In these and countless other cases, meeting a metric became an end in itself, and organizations went terribly wrong. But even in situations where there is no fraud or cheating, a priority on meeting statistical benchmarks can be distorting if not destructive—as in the medevac case. Metrics are a tool. Their use, or misuse, reminds me of a line by the Scottish literary figure Andrew Lang, who said of someone, “He uses statistics as a drunken man uses lampposts—for support rather than for illumination.”
Never look at numbers in isolation from other considerations in evaluating performance, including intangibles such as quality of product or services, morale, friendliness, and that special effort by an employee to help someone; while it takes extra time (and thus may blow the hell out of the response time metric), it transforms a cold bureaucracy into a willing and warm operation with a human face. Use metrics for illumination, not support. That will benefit both business and the public sector.
The leader needs to keep a cold, hard eye on his initiatives and be honest enough with himself—or open to the views of colleagues—to admit something isn’t working and then pull the plug fast.
In companies as well as government, I have seen leaders stick with a bum idea too long, all too often because it was their brainchild. A leader should recognize that not every idea and initiative will pan out, and move on.
Senator Roscoe Conkling of New York once said, “When Dr. Johnson defined patriotism as the last refuge of a scoundrel, he was unconscious of the then undeveloped capabilities and uses of the word ‘Reform.’ ” I have been around long enough to fully appreciate the law of unintended consequences, even of reform. And I can bear personal witness to the fact that change is not necessarily always for the better. So how do you avoid changing things for the worse? As the historian E. H. Carr observed, “Change is certain. Progress is not.”
I have sought in these pages to link “change” with “reform,” to make clear that the change I advocate is intended to improve the performance of an organization and, in the case of public institutions, also to make them more responsive to the people they were created to serve. But that is not always the way change works out. Everywhere I have worked, I have seen leaders make changes that were misguided and retrogressive. From ill-conceived reorganizations at t
he CIA to ill-informed and wrongheaded decisions by administrators and the board of regents at Texas A&M, virtually unworkable congressionally mandated restructurings in the executive branch, and specific decisions within Defense, I have seen the results of bad decisions regarding change.
The list of misguided decisions in business also is a long one. Think about the Ford Edsel in the mid-1950s or New Coke in the 1980s. More broadly, consider some of the big retail chains facing challenges wherein a new CEO took them down the wrong path of change that worsened the problem or, in some cases, even destroyed the company. As a board member of the TRW corporation, I witnessed a wrongheaded strategic decision on an acquisition that ultimately led to the demise of the hundred-year-old company. There have been big mergers that never really worked out, and of course the financial meltdown in 2008 was due in large measure to really bad business decisions.
In no case, public or private, did the decision makers intentionally head the organization in the wrong direction; to a person, I suspect they thought they were making things better or a wise business move. So how does a leader avoid constantly roiling the waters for no purpose other than the appearance of change, and how does he avoid making changes that turn out badly?
Acknowledging that there are no guarantees in life, especially when it comes to avoiding mistakes, I believe there are ways to minimize change going wrong. Every decision involves risk, but a leader can mitigate that risk by continuing throughout her tenure to use the techniques described earlier to test every idea for change she or others have. Specifically, she should be open and transparent about what she is considering, consulting widely within the organization and with her stakeholders. She must listen to her employees and encourage constructive criticism and candor. Abraham Lincoln captured this approach thus: “I am never easy when I am handling a thought, till I have bounded it north, and bounded it south, and bounded it east, and bounded it west.” The opinions a leader gets on each proposed change may not affect her decisions at all, or they may lead her to revise her plan or cause her to abandon it altogether. But if she proceeds, she will have had the benefit of thorough scrutiny, and she will have a pretty good idea of potential risks, vulnerabilities, weaknesses, and criticism.
A Passion for Leadership Page 22
