Wanted: Pit-bull managers to put a firm right

Rich Simons, Contributor, Jakarta

Revival of the Fittest: Why Good Companies Go Bad
and How Great Managers Remake Them
Donald N. Sull, Harvard Business School Press, 2003
203 pp

In every company that achieves success, whether it is for the first 12 months or the first 20 years of its existence, the managers had a recipe, or set of standard operating procedures, that worked.

However, as ironic as it may sound, in the sometimes wild, wild world of free enterprise that same recipe for success, in a changed environment, can become the recipe for disaster, unless, as Sull of Harvard Business School so eloquently describes, the management team can respond.

This entails natural changes in the wider world by making a complete departure from the original success formula with radical, bold decisions and commitments that enable it to adapt to dynamic changes in the industry.

At one point, he refers to the need for a tenacious "pit-bull" financial officer, not a "lapdog", but someone willing and able to ask the hardest questions of his superiors and make courageous, often unpopular decisions.

Prof. Sull obviously did quite a bit of in-depth research in a wide cross-section of business sectors and countries, not merely a few unique case studies that serve to support a theory, as many "how-to" business books are wont to do.

Sull has been there, in both worlds, the academic side and the practical side of business, and has a successful track record in both.

The keys to successful regeneration of a company during a rough time as it tries to adapt to new market directions -- changes in technology, an overall economic downturn, for example -- are to overcome active inertia by boldly changing the mindset of the whole team to divorce itself from the tried and true success formula and create a new formula.

Active inertia is much like being lost in a maze and trying to run faster and faster down the wrong path to get out. There is activity, even radically increased activity, but the runner is still going the wrong way and thus will not succeed.

What Sull prescribes is to stop, contemplate and understand the predicament clearly and then map out the course, or commit to a new formula -- completely -- in order to succeed in the new business environment.

This is what he terms Transforming Commitments; making decisions and new commitments that are, in many cases, contradictory to the set of values and commitments the company originally had.

What makes this difficult is that many companies, especially those with previous success, have already indoctrinated the whole family, from middle managers down to secretaries, on the mantra of what their company stands for.

Therefore, to get the whole team "on board" with the new commitment it requires great leadership from upper management and great communication skills throughout. Sull actually prescribes several very practical methods, backed up by academic concepts, so managers can not only recognize when they are in a state of active inertia, but specifically how it can be overcome to set the company on the right path to greater success.

As with many business-oriented books of late, I assumed before reading it that it would be a diatribe on one side or another of the "Globalization Debate". Refreshingly, it was not. But how, one may ask, can a book on business in the year 2003 neglect to mention globalization?

The answer is it did not need to be mentioned, because globalization, by definition, is one example of the changed environment that many, many companies throughout the world have to deal with. This very change we call globalization may radically affect a company's fortunes to the point that its previous formula for success is rendered obsolete through the passage of time.

In Indonesia, the business environment can be very murky at the best of times and chaotic and even dangerous at other times. In the last 10 years, Indonesia has seen probably more change in the business environment than most countries will see in a century.

From being one of the rising Asian Tigers to the Asian meltdown to reformasi (reform) to terrorism, it has all happened here in less than a decade. Those companies, and their managers, that have survived all this turmoil and are still thriving will enjoy this book much like a war hero swapping battle stories with other heroes who fought in the same war.

The companies who were previously successful and are having a hard time coping at present require this book as a vital prescription for renewed success.