“Business is NOT a democracy!”

The CEO had raised his voice. I wouldn’t have said he was actually yelling, but his face was a darker shade tending toward red, and he was definitely speaking louder than he had been moments before.

My colleague, a consulting partner, was explaining that there was considerable disagreement with his post-acquisition integration plans and not just from the acquired company. This news did not please him, which caused him to so forcefully state his view of business governance.

The partner paused briefly, and then said quietly, “it is true that business is not a democracy, but it still requires the ‘consent of the governed.’”

Now it was the CEO’s turn to pause. He exhaled. His clenched jaw relaxed some and he enunciated clearly, “Fair point. . . . continue.”

The partner continued and ultimately we were engaged in a post-acquisition integration restart project, which featured the combined leadership team making decisions about which businesses would be left alone, which spun off, and which would receive additional investment. Staffing, the issue that had caused the dissent, followed those decisions. The CEO was sanguine about the outcome, but I think still believed that people should have just done what he told them to do.

I recognized the “consent of the governed” phrase from the US Declaration of Independence, but it turns out to be older than that, June 15, 1215 to be exact, the Magna Carta. The English King John affixed his seal to a document written by his barons, facilitated by Stephen Langton, Archbishop of Canterbury, which gave people rights to have input into laws that governed them, and justice “equally” before those laws.

Business is not a democracy, but lack of input and perceived injustice can still cause people to vote with their feet, either dragging them or using them to walk out, taking critical knowledge and skill with them.

The New Leader Opportunity

Acquisitions are one new leader opportunity. Suddenly you are leading a whole new group of people and if you treat them as the “spoils of victory,” you will make acquired company staff aware of their feet. You will also telegraph to everyone else how little you value expertise.

Anytime you lead a new group of people it is a new leader opportunity. The opportunity communicates how you value followers, or don’t. Unity, input, transparency, and fairness are watchwords.

Sometimes new leaders come from inside the organization, sometimes they are hired from the outside, but often they are put in the role to make a change. This is most visible at the CEO level. Jack Welch was promoted from the GE Plastics division to replace Reg Jones; Lou Gerstner was hired from RJR Nabisco to replace John Akers at IBM. Both had board mandates to radically change their corporations. However, any new leader can come from inside or outside, and almost always those that do the hiring expect that something will change. Understanding that expectation is the first step for a new leader.

The Why

At the CEO level there is often a decline or lack of growth in revenue or profitability or both that moves the board to act. Sometimes at lower levels, there is a lack of improvement, or innovation, or there are some people issues driving the change.

A new leader must understand and explain why people should choose to change.  What has changed with customers, competitors, technology that necessitates doing something different? And why not changing is not an option.

“Because I said so” rarely worked with my children, but it definitely doesn’t work with adults. Nor do the corollary statements ‘we bought you,” the “boss or board says so,” or any other “my way or the highway” sentiments. People may comply, in the short term, but they will also become aware of their feet.

Insight – Action – Results

This is the model I used to frame change. Insight is the data behind the why. Action is what we do more of, less of or differently. Results are the outputs we are trying to achieve. It is simplistic. For most changes, there will be breakdowns between insight and action, as people take different times to understand or act. There will be actions that don’t produce the desired result and “back-to the-drawing-board” moments. But a leader must frame what we are trying to do and why and engage people in the how and when.

The Who

Rarely do the same people who got us here, get us there. Oh, it is possible that the status quo folks will seamlessly become the passionate converted to the new vision. But frequently, those who lead the new change will be those outside the existing power structure. It’s why Jim Collins made the first step of Good to Great, decide “who’s on the bus. This is the essence of John Kotter’s “guiding coalition,” from The Heart of Change.

So who is on the bus? My list of criteria includes people who: :

• Have internalized the “Why” of the change.
• Are true problem solvers who invest the time to define and analyze a problem, not just suggest solutions before having the facts.
• Have extraordinary communication skills – looking for clarity over eloquence, and simplicity over sounding smart.
• Others listen to. (This often has nothing to do with positional power, but everything to do with competence.)
• At least one person who immediately jumps to the “worst case scenario.” This is your risk assessor, your seer of unintended consequences. You don’t want a whole team of doom and gloomers, but one or two people with this view – and a sense of humor – can help avoid disaster.

Wasting the Opportunity

Often, you get one opportunity as a new leader, to attract followers, to engage people and help them choose to change. If you waste that opportunity, badmouthing, berating, and blaming, it is hard to come back. If you act unilaterally, or fail to have empathy and gratitude, the only people who follow will be those who want something from you. And no one will tell you when you’re blowing it.

Feedback and Accountability

Reward the people who give you the “straight skinny,” the people unafraid to say “the emperor is naked.” Even King John, who was not known to be a good king, agreed to clause sixty one in the Magna Carta.

Clause sixty-one gave the barons the right to appoint twenty-five barons ” to keep, and cause to be observed with all their might, the peace and liberties granted and confirmed to them by this charter.” The barons would give the violator (including King John) the opportunity to correct a transgression. If not corrected the barons could take the offender to trial.

King John, perhaps the worst king in Britain’s history, agreed that he was not above the law and could be held accountable. He didn’t live up to it, but others have since.

So business is not a democracy, but it does require the consent of the governed and some accountability beyond stock options and bonuses.