Ray Friant has revitalized organizations worldwide for 40 years. He is a charismatic public speaker and expert who can work closely with business media. He is available for features, articles, columns, shows, and segments, Sharon@BeyondBuzzwords.com.
Excerpts From A Recent Interview
With Ray Friant
Turnaround expert, Keynote speaker and Author of Beyond Buzzwords: The New Agenda for Directors, CEOs & Executives.
HOST: Good morning, Ray. Welcome to Business Radio.
FRIANT: Good morning to you. I’m pleased to be here.
HOST: You sent me a copy of your book, and I found it very interesting. Tell me how you came to write Beyond Buzzwords: The New Agenda for Directors, CEOs & Executives.
FRIANT: It started through discontent with the (more or less) standard way that businesses were approaching mediocre to poor performance. For many years there has been a belief in the formula “Pick the right CEO and your problems will be solved.” But, this strategy hasn’t worked.
HOST: Is this still a widespread belief?
FRIANT: Yes, but fortunately the world is waking up. Recently Peter Drucker noted that the cult of the superhuman CEO has been disproved. In February 2005 Ram Charan wrote an article in the Harvard Business Review entitled “Ending the CEO Succession Crisis.” And in a June 2005 USA Today article entitled “More CEOs jump ship---or walk the plank,” Del Jones presents statistics that demonstrate widespread CEO failure, and significant Board of Directors discontent with CEO performance.
HOST: Are all CEOs culpable?
FRIANT: No, of course not. There are many outstanding CEOs who are responsible for making the world work. However, half of corporations and many government organizations are failing to achieve their mandate. And it is sad but true that failing CEOs often don’t know why they are failing.
HOST: Have you figured out why the failures occur?
FRIANT: For many situations, yes. The reason is that we have been treating the wrong problem. It is very like the ulcer crisis of a decade ago. Once doctors learned that the majority of ulcers were being caused by an elusive bacterium, an effective anti-biotic was widely prescribed with the result that ulcers were cured.
HOST: Okay. What is the management bacterium?
FRIANT: I call it, “fog.”
FRIANT: Yes, fog. To manage an organization, the CEO has to be able to, first, see clearly what is going on below him or herself. And second, the CEO has to see clearly the path to the future. It turns out that for many reasons discussed in Beyond Buzzwords large numbers of CEOs do not properly see either. To make matters worse, they see some things very clearly, while other important aspects are not seen at all.
HOST: Can you give me an example of not being able to see current operations?
FRIANT: Sure. In the 1960s, Harvard Professor John Kenneth Galbraith described the coming “technostructure” wherein organizations were becoming so complicated and technically advanced that managers would only be able to see one or two levels below themselves. Today the technostructre has arrived, and it is accelerating rapidly with advances in technology in all functions, e-mail, and the Internet. I’ve talked with many managers who are overwhelmed by receiving 50 to 150 e-mails a day…so many that they have no time to read them let alone decide which have merit. Staffs are equally inundated. Thus, CEOs must see through the fog of excess information in order to correctly manage the day-to-day. This is a tall order, and it is not easily fulfilled.
HOST: How about the future?
FRIANT: Problems with the future stem from a different root cause. Because of Wall Street’s focus on quarterly results, the executives promoted to be CEOs are usually very good at analyzing short-term needs and making short-term course corrections. However, the very skills that make them good at short-term actions (provided of course that they can see through the fog) are not the skills needed for charting an organization’s course into the future. Often here-and-now CEOs lack vision and skill for dealing with the future.
HOST: Can you give me a concrete example from some company that I know?
FRIANT: Absolutely. In fact, let’s discuss a situation that all of your listeners will understand as well. In 1876 Alexander Graham Bell took his talking machine to Western Union. Western Union’s management knew that nobody would ever pay to talk over wires. So, Bell started the company that became AT&T. Years later, in the early 1990s, Bell Labs executives urged AT&T to develop the Internet for personal use. But AT&T executives knew that the Internet for personal use was a passing fancy and declined, which allowed AOL to own the biggest share, and left AT&T out in the cold. Thus, the company that started because Western Union’s management couldn’t make a proper decision for the future, was in fact itself victim of similar senior management incompetence.
HOST: I can see that CEOs have to get it right when making future product decisions. What else should I observe?
FRIANT: There is an imbedded truism in this story…one that is pervasive and seldom recognized. Every human organization has forces at work that are killing it from within. Individuals are doing many counterproductive things to accelerate their own careers at the expense of their organizations. These activities raise cost and reduce output. For example, once Ma Bell was split apart, the remaining AT&T organization had to compete on its own, but its costs were so high that they couldn’t compete…and others took the market. But, that phenomenon isn’t unique to AT&T. It exists in all organizations.
HOST: Well, if it exists in all organizations, why not just get rid of it?
FRIANT: There is the rub. There are so many thousands of possibilities and variations that it is virtually impossible to categorize them for easy elimination. In Beyond Buzzwords I refer to the inability to see the future as PBL, which stands for “Present Bound Leadership,” and the erosion from within as “Drag.” In my judgment, PBL and Drag are the two major culprits causing today’s organizations to under-perform their potential.
HOST: So what should be done?
FRIANT: I have had great personal success in many turn-around situations with a technique that I call Total Organization Analysis, which is done by an independent analyst. Beyond Buzzwords discusses the reality that CEOs cannot effectively analyze their own organizations. They lack the time, can’t upset protocol by going unaccompanied to lower level personnel, and will get distorted information because of the fear that employees have. But those constraints do not hamper an outstanding outside analyst, i.e., provided that they operate using a strict set of guidelines.
HOST: What do the guidelines accomplish?
FRIANT: The guidelines set the stage for a successful Analysis. First of all, the CEO has to agree to the broad scope of the analysis, has to agree that the analyst can have prompt unrestricted access to all company records and personnel, and has to instruct the whole organization to cooperate fully with the analyst. In addition, the guidelines require the analyst to follow certain disciplines to protect all personnel from punitive reprisal for their cooperation. I know that it sounds complicated, but it isn’t. During my career I’ve done around 30 TOA®s and never had a problem. So, I know that the guidelines work. And I know that the results are very valuable.
HOST: What exactly are the results?
FRIANT: The immediate result is the creation of a DRAFT FOR DISCUSSION that details the problems and opportunities for both the present and also the future. The DRAFT is first given to the CEO, then to the senior staff, and finally to the whole management team. The DRAFT also includes a business plan for the future. My experience is that the collective management adopts a business plan that is very close to the one recommended in the DRAFT, and that they then implement the plan. That is the real result and my experience is that, as a result of focus in new directions, mediocrity is replaced with competence and competence with excellence.
HOST: Whow! That sounds too good to be true! Aren’t there are some problems along the way?
FRIANT: Yes there are. One of the biggest is that CEOs are often so focused on their failing game plan that they resist doing a TOA®. In this circumstance, the Board of Directors must insist that the analysis be done. And in today’s litigious world Boards are becoming more assertive. The risk of stakeholder suits is changing directors’ perspective.
HOST: Is that risk real?
FRIANT: Anyone who has priced Directors and Officers (D&O) insurance recently knows it is for real. Directors and Officers have a fiduciary responsibility to pro-actively take actions that improve performance and prevent failure. For this reason, I believe that directors will purchase copies of Beyond Buzzwords to learn how they can prevent mediocrity or failure. I also believe that executives and managers will buy the book. It is crammed with advice and counsel that is useful daily.
HOST: Who else will benefit from reading your book?
FRIANT: Human resource personnel, investment bankers, legislators, and personnel in not-for-profit organizations will all benefit from the theory and practical advice.
HOST: How can our listeners get a copy of Beyond Buzzwords: The New Agenda for Directors, CEOs & Executives?
FRIANT: Two easy ways are: listeners can go to the RayFriant.com Web site, or they can call 1-800-431-1579, which is the Book Clearing House order line. By either route, books will be shipped the next day.
HOST: One final question. Is absolute proof given in the book?
FRIANT: There are two parts to the answer. First, the best learning comes from self-confirmation of new ideas against one’s own experience. In the book I try to give ten times the information needed for most people to accept the theory. Then, when one’s own ideas square with new points of view, progress is made.
The second part of the answer is this: some people are committed to culturally reinforced dogma. Even when confronted with scientifically, or anecdotally, derived information, these folks will seldom change in their beliefs. Thus, the book isn’t for people whose ideas are frozen in the last century.