Multipliers: How the Best Leaders Make Everyone Smarter (15 page)

Let’s look at another Challenger in action.

THE CHALLENGER

By 1995, the Oracle Corporation was headquartered in the affluent waterfront neighborhood of Redwood Shores on the San Francisco Peninsula in California. Oracle had begun retooling its products for the Internet, but the business strategy was still unclear. The challenge of figuring it out would fall to Ray Lane, Oracle’s president, who had
joined Oracle two years earlier and had grown the U.S. business from $571 million to $1.2 billion.

RAY’S REVOLUTION
Ray decided to gather the top 250 leaders of the company from across the globe in a series of forums to educate them on the corporate strategy and to align the leadership team behind this strategy. Ray and the other senior executives, including CEO Larry Ellison and CFO Jeff Henley, prepared their strategy presentations and gathered the first group of thirty executives. They gave their presentations and held discussions, but as the week went on, the group became more and more confused. One VP spoke for the group when he said, “We aren’t clear on the strategy. We just saw a lot of PowerPoint slides.”

Ray and his team went back to the drawing board and did a major overhaul of their presentations. They invited another group of thirty executives. This time the feedback was different: it was an all-out revolt. One of the executives took a risk and said, “Stop getting people together until there is a clear strategy!” The team was not buying what Ray and the rest of the team were selling.

INDEPENDENCE DAY
The senior executive team quickly regrouped at Ray’s house on their first available day, the Fourth of July. They realized the global business had become more complex and diverse than they originally thought and that they couldn’t build this strategy alone at corporate. They decided to take a fundamentally different approach. Ray and the executive team started out trying to tell others all the answers. They switched to sharing the fundamental questions, trends, and assumptions that were shaping their views.

When they came back together with the next forum of leaders, Ray and the other executives shared what they saw happening in the business and where they saw the world going. Ray seeded the opportunities that these trends would present for Oracle and presented a framework for a strategy—four key transformations needed in the business. And then with this broad stroke of his brush, he stopped telling and
started asking, “Are these the transformations needed in the business?” and “Which of our assumptions about the future might be wrong?”

Ray gave the group a challenge to fill in the blanks. The team would have two days to examine each of the four transformations, identify milestones, and pinpoint the implications for the business, and then pass their thinking on to the next group of leaders who would go further. The group did exactly that, advancing the thinking of the executive team and then handing off their work to the next group of executives. The group reveled in their collective success and left the forum knowing that they had begun something big. The process continued until all SVPs and VPs had been involved. Each group challenged the work that had been done before them. They took their task seriously, turning the strategy upside down and sideways as they looked for holes, logic flaws, and vulnerabilities. In the end, they emerged with both a validation and a refinement of the collective thinking. The momentum was building.

THE CONVENTION
Ray and the other executives culminated this process by convening the entire leadership team of the company. The executive team unveiled the strategic intent of the organization and the transformations needed in the business. The reaction of the global leadership team was overwhelming enthusiasm and optimism, knowing they would be making business history. The strategy was fresh and compelling, yet it was familiar to them because they had co-created it and could see their fingerprints on it.

When the meeting was divided into regional breakouts, the scene was far from typical. Instead of a discussion about “why this won’t work in Europe, the Middle East, and Africa (EMEA),” the conversation in the EMEA breakout room was almost boisterous with questions like, “What is the first step?” and “Where can we start implementing this in Germany?” The scene in the Japanese breakout room said it all. They discussed the strategy and its implications
for Japan. And then, with quiet fervor, they began to organize as if they were going to battle.

What was unveiled in the meeting and the breakout sessions was a manifestation and statement of the collective will of the organization. Under Ray Lane and Larry Ellison’s leadership, the organization forged ahead to execute this strategic intent, propelling Oracle into the lead position in the late 1990s for enterprise computing in the Internet world. From 1996 to 2000, Oracle grew from $4.2 billion to $10.1 billion, more than doubling revenues.

Ray Lane began with an honest attempt to sell a strategy to the organization. But he emerged a more powerful leader as he first seeded the opportunity, and then laid down the stretch challenge for the organization. He didn’t set the direction; he ensured the direction was set. He operated as a Challenger.

THE THREE PRACTICES OF THE CHALLENGER

How does the Challenger engage the full brainpower of the organization? Among the Multipliers we studied in our research, we found three common practices. Multipliers: 1) seed the opportunity; 2) lay down a challenge; and 3) generate belief. We’ll examine each in turn.

I. Seed the Opportunity

Multipliers understand that people grow through challenge. They understand that intelligence grows by being stretched and tested. So even if the leader has a clear vision of the direction, he or she doesn’t just give it to people. Multipliers don’t just give answers. They provide just enough information to provoke thinking and to help people discover and see the opportunity for themselves. They begin a process of discovery.

We’ll outline a few of the ways that Multipliers seed opportunity and begin the discovery process.

Show the Need

One of the best ways to seed an opportunity is to allow someone else to discover it for him-or herself. When people can see the need for themselves, they develop a deep understanding of the issues, and quite often, all the leader needs to do is get out of their way and let them solve the problem.

The Bennion Center, on the University of Utah campus, was established to encourage students to engage in community service projects and activism while in college. Irene Fisher, the center’s director for fourteen years, was hopeful that the students would sign up for some of the city’s toughest problems.

Instead of making a speech or just selling her vision of service to the poorest members of the community, Irene invited students to take a leadership position and organize other students to work with the community. She took them downtown into the inner-city community so they could see the needs for themselves. They walked the streets and observed the plight of the homeless. They visited shelters and talked with single mothers struggling to get by. Because they saw the needs for themselves, they became passionate and curious about how to create change, and learned rapidly in the process. As their involvement level grew, these student leaders assumed more and more challenging roles. She noted, “University students are pretty smart. Once they see something they start asking questions. Our students asked a lot of questions and then went to work.” Irene seeded the opportunity and allowed the students to take the challenge. Irene added, “I don’t see myself as a challenger per se. I think of creating the opportunity for people to see the challenge so they can respond to it.”

The Bennion Center is still thriving today, built on the assumption that you don’t get the most out of people if you just tell them what
to do. You get full effort if you help people discover opportunity and, then, challenge themselves.

Challenge the Assumptions

Multipliers ask the questions that challenge the fundamental assumptions in an organization and disrupt the prevailing logic. Renowned management guru and strategy professor C.K. Prahalad is known for asking the questions that challenge the fundamental assumptions of an organization. He understands that strategy is about understanding and questioning assumptions. When working with management teams in leading corporations, C.K. has a penchant for asking the unsettling questions that rattle their assumptions and enable them to see market opportunities and threats in a different light.

In working with the Phillips Corporation, a multinational manufacturing company, and after carefully interviewing each member of the executive team to uncover their core assumptions about the business and the tensions in the organization, he could see that they had an assumed invincibility in the market. C.K. formulated a plan. When he arrived at their executive strategy offsite, he began with a fictitious article he’d written that might appear in
The New York Times
speculating a bankruptcy at Phillips. He then launched the following questions: What changes in the current competitive landscape would devastate Phillips’s revenue stream? What if companies A and B merged? What market changes could lead to a bankruptcy? What is your game plan if it happens? The room became tensely silent. He had shaken their beliefs upon which the current business strategy was based. With the full interest of the executive team, he guided the discussion as they began to explore the answers.

Reframe Problems

Multipliers understand the power of an opportunity. As Peter Block, consulting guru and author, observed, “the most powerful work is done in response to an opportunity not in response to a problem.”
Multipliers analyze problems, but they also reframe them to show the opportunity presented by the challenges.

Consider how Alan G. Lafley, when he was CEO of Procter & Gamble, reframed the problems of generating revenue growth from new product R&D as part of his overall revitalization of the company.

As Larry Huston and Nabil Sakkab explain in their
Harvard Business Review
article “Connect and Develop,” the “invent-it-themselves” model was no longer allowing P&G to sustain a high level of top-line growth. At $25 billion the company could still manage to do it, but beyond $50 billion it was impossible and P&G lost half of their market cap as their stock fell from $118 to $52 a share.

Rather than falling into the trap of doing more of the same, Lafley developed a new strategy of sourcing their innovation from the outside. The shift was from “not invented here” to “proudly invented elsewhere.” Rather than thinking of innovation as “invention” where the R&D has to be done in your own physical labs, Lafley looked for ways to join forces with people in their supply chain whom they could partner with to innovate more rapidly.

For example, Huston and Sakkab relate, when the idea emerged to produce Pringles potato chips with pictures and words printed on the crisps themselves, P&G had to decide whether to create an end-to-end solution from scratch, or whether to find an innovative solution somewhere within their partner network. In the past, bringing a new product to market represented a two-year investment. But with Lafley’s new reframe, they could see a smarter path.

In the case of the Pringles, they “created a technology brief that defined the problems [they] needed to solve, and [they] circulated it throughout [their] global networks of individuals and institutions to discover if anyone in the world had a ready-made solution. It was through [their] European network that [they] discovered a small bakery in Bologna, Italy, run by a university professor who also manufactured baking equipment.”
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The professor’s innovation allowed P&G to get to market in half the time and at a fraction of the cost of inventing the
solutions in-house. The product was an immediate hit. It led the Pringles division to enjoy double-digit growth for the next two years.

Create a Starting Point

Multipliers provide a starting point, but not a complete solution. By offering a starting point, they generate more questions than answers. These questions then encourage their team to fully define the opportunity while giving them confidence that they are building on a solid foundation.

Ray Lane and Oracle’s top executives created the skeleton of a strategic framework and then asked groups of senior leaders to systematically and collaboratively work to complete the whole strategy.

When a Challenger has successfully seeded an opportunity, other people can see the opportunity for themselves. And because the opportunity has been planted but is not fully grown, others are taken through a process of discovery. This process of exploration and discovery sparks intellectual curiosity and begins to generate energy for the challenge. And because the answers are clearly not formed, people know “there is still something for me to do” and they can step in to be involved.

II. Lay Down a Challenge

Once an opportunity is seeded and intellectual energy is created, Multipliers establish the challenge at hand in such a way that it creates a huge stretch for an organization. While Diminishers create a huge gap between what they know and what other people know, Multipliers create a vacuum that draws people into the challenge. They establish a compelling challenge that creates tension. People see the tension and the size of the stretch and are intrigued and, perhaps, even puzzled.

Mission Impossible

Matt McCauley took the reins of Gymboree, a $790 million children’s retailer headquartered in San Francisco, at the age of thirty-three, after
coming through the ranks of planning and inventory management. This made Matt not only the youngest CEO to head Gymboree in its thirty-year history but also the youngest CEO of a company in Wall Street’s Russell 2000 index.

McCauley used his youth to keep him open to the ideas of others. “I love to riff and bounce ideas off of people. Regardless of what their function is, [Gymboree employees] are all talented, bright people,” says McCauley.
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Matt had been a pole vaulter in college. He set one bar at seventeen feet, six inches, which is what he could clear, but he always kept a second bar set at twenty feet—the world record at the time—to remind himself of what was possible. Matt took this same approach at work.