The Leadership Challenge in Legacy Businesses

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Our current reality is extremely challenging. We live in an age of accelerating change and a rapidly growing global marketplace. Collapsing time frames; continuous, rapid, technological changes; environmental challenges; and globalization are the norm. The game has been changed forever. If we are to thrive as a culture and successfully compete, we need to train our leaders and teams to be innovators.

Successful companies, such as Microsoft, that were once innovation leaders in their fields often fall into the trap of being driven by their shareholders. Shareholders want minimal risk and steady returns on their investment. Innovative companies frequently need to risk failure in order to succeed. Today’s leadership challenge is to keep both shareholder’s concerns and innovation’s risk, and reward, in balance.

For instance, “nearly a decade before Apple released the iPad, Microsoft had developed a version of Windows XP suitable for tablets. The tablet was controlled by a stylus.

Bill Gates said that Tablet PCs, as Microsoft called them, would be ubiquitous within five years. Gates and Microsoft CEO Steve Ballmer missed the mark by failing to see the need for hand-touch technology and user-centric marketing – two key elements behind the iPad’s success.

Microsoft released a tablet in 2012. But people found it difficult to use, and Microsoft couldn’t convince developers to make apps for the tablets despite Ballmer’s appeals to the developer community.”[1]

Microsoft’s misstep was a failure in leadership; a failure to see the world as it changed around them. The challenge for companies today is to keep old style thinking, old style leadership styles, if you will, from becoming a straightjacket. Leaders must be change masters, responding to and anticipating the demands of a rapidly changing world.

The leading edge of companies today is to be found within the parameters of strong, effective, and creative leadership at all levels. Steve Ardia, the year before he retired as CEO of Goulds Pumps, put it this way in a conversation we had:

Cultural change, the recognition that Goulds Pumps, even though it was considered, and is probably still considered, the best pump company in the world, is really not good enough as it stands – that old standard is not good enough. We need to be improving; we need to be raising our performance levels at an increasingly rapid rate.

For us, the resistance came from the people who felt we were the best. They asked, “Why do we have to change?” The fact is, the world is changing at a very rapid rate, and if we don’t accelerate our rate of progress, we will quickly fall behind. One of my first messages to our people was that in spite of our 140-plus years of success, the survival of our company was at stake. We either met customer expectations and improved our performance, or within 10 years we would no longer be an independent company and the death spiral would begin.

Yet to generate the kind of changes Steve wanted to create within his organization, he had to find a way to generate more leadership impact both for himself and the people within the company. This required a shift in perspective and an understanding of what real power is all about.

Real power comes from within you. It cannot be given by someone else, nor can it be taken away. It starts by having a high level of intimacy with yourself, being able to touch your dreams, aspirations, core values, and principles. This power exists in everyone around you, though in most people it is latent and sleeping. Awakening this power is the key to both individual and organizational resilience in the face of rapid change and daunting challenges.

To assure its future Microsoft must find a leader who can harness his or her internal power, release the leadership from its straight-jacketed thinking and lead the company back to its innovative roots.


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