Tuesday, December 8, 2015

Do Leadership styles matter in forming Product Portfolios?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge.

Jack Welch famously said that if a division at GE is not #1 or #2 in their industry, that division should be closed. He implemented that strategy at GE while he was CEO.  How important is leadership style in driving the necessary portfolio changes?

Let me talk first about three pioneering figures of our Industry. Bill Gates, Steve Jobs and Andy Grove. They make an interesting study because all three of them had their strong points and they had weaknesses too and their personality reflected in the organizations that they eventually led to glory.

Gates’ USP in his early days was the rate knowledge on how to program the early personal computers. And he was a true expert at that as he has been featured in Malcolm Gladwell’s famous 10000 hour rule needed to be expert at anything. During his early days (till around 90s), he was so involved in programming related work that he himself admitted that “I wouldn’t let anybody write any code. I went in and took every statement that anybody else had written in BASIC and rewrote it myself, just because I didn’t like the way they coded.” He used to astonish company’s engineers with his programming details. He soon realized that he and Microsoft couldn’t scale this way and hired the able people to lead in other major functional areas.

Steve Jobs’s focus on design was just as intense as Gate’s focus on software. As Gates went deep into the code, Jobs committed himself to user experience and design with maniacal depth. He oversaw every aspect of product design and would scrutinize everything, down to pixel level. There are stories around Jobs wanting scroll bars to be looking in a certain way, forcing the team to show multiple versions in a process that took almost six months.

Andy Grove, possibly lesser celebrated than Gates and Jobs but no less effective was passionate about disciplined thinking. He would challenge people’s thinking. Then he would probe all the way through a strategy and force people to really justify it. He also once famously said- “Execution is God”

So be it Gates’ penchant for technical details, Jobs’ for design and Grove’s focus on disciplined thinking, their personalities showed up in the way their organizations shaped up and that included how their products looked a fared. Their leadership styles driven by their primary personality preferences shaped up the products.

Michael Watkins in his book “The First 90 days” talks about STARS framework based on the business situation a particular business or for our discussion, a product is. Each letter except the letter “A” in the STARS is related to a business situation i.e. Start-up (when business starts), it either becomes Sustaining Success (after some efforts) or it closes (Shutdown/Divestiture). Once it’s a sustaining Success usually complacency sets in where it reaches the state of Realignment and post this stage, it is either back to Sustaining success or Turnaround. If we study this framework closely, each of the stages requires different leadership style. 

To quote the case of Apple, when Steve Jobs took over Apple in 1997- it was almost a dead business dearly in the need of being Turned-around. At this stage, he adopted a very hands-on approach to leadership and involved himself in taking tough decisions, culled projects, got into product design. He eventually made Apple, a sustaining success. On his departure, and taking over of Tim Cook, Apple has undergone certain realignment and Cook’s leadership style evolved accordingly. E.g. Steve Jobs used to call acquisitions as “Failure to Innovate” whereas under Tim Cook Apple has made more than 50% of its acquisitions. Tim Cook is more open to doing partnerships with IBM, Microsoft than probably Steve Jobs was and Cook even leveraged these partnerships to open-up enterprise market for Apple.

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