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FirstCuts 35 - Snow White and the Many Dwarves

FirstCuts 35 - Snow White and the Many Dwarves

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Published by Francis Wade
Here in the Caribbean we have a number of companies that are initially successful but are unable to grow past a certain size, no matter what they do. In many cases, that size corresponds to a headcount of 150-200. which scientists tell us is the maximum number of people that can work together, and be managed closely by one person who doesn't delegate.

When companies cannot scale up to the next level, they never exit the startup phase and achieve their full potential. The cause can sometimes be traced to a CEO who behaves as if he is special (Snow White) and is surrounded by a lack of talent (his many dwarves.)

To grow, regional companies need to ensure that they train leaders, not develop personalities, and push their CEO's to delegate differently while demanding higher skills from managers.

The audio version of this article can be found at: http://fwconsulting.podomatic.com/entry/2010-11-24T14_36_44-08_00
Here in the Caribbean we have a number of companies that are initially successful but are unable to grow past a certain size, no matter what they do. In many cases, that size corresponds to a headcount of 150-200. which scientists tell us is the maximum number of people that can work together, and be managed closely by one person who doesn't delegate.

When companies cannot scale up to the next level, they never exit the startup phase and achieve their full potential. The cause can sometimes be traced to a CEO who behaves as if he is special (Snow White) and is surrounded by a lack of talent (his many dwarves.)

To grow, regional companies need to ensure that they train leaders, not develop personalities, and push their CEO's to delegate differently while demanding higher skills from managers.

The audio version of this article can be found at: http://fwconsulting.podomatic.com/entry/2010-11-24T14_36_44-08_00

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Categories:Types, Business/Law
Published by: Francis Wade on Nov 24, 2010
Copyright:Attribution

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07/10/2013

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Newsletter Header
Page 1
 
Newsletter Header
Page 2
2
FirstCuts
Framework Consulting Inc. November 2010: Issue 35
Inside
Editorial 2Article 3Discussion 8
Editorial
FirstCuts - a source ofprovocative ideas forCaribbean business-thinkers
Article
Time management andproductivity in the eraof smartphones.
Tips, Ads and Links
Editorial
As we close out the year, andenter the holiday season, Ihave to look back with somegratitude. This was the yearof dodging bullets, it seems. The recession settled in forthe long haul, and in spite of it I am happy to be able to behere to publish anotheredition of FirstCuts. We justmissed the full wrath oHurricane Tomas, but werehit by Tropical Storm Nicole inaddition to a drought. That'son top of a state oemergency that closed downcommerce for about amonth. And that was just Jamaica!Barbados lost its PrimeMinister to cancer in a matterof months 2 weeks ago. Trinidad and Tobago changedits government in the blink of an eye, long before electionswere due.We are watching carefully forsigns of cholera, nowravaging Haiti, and I guessthat their earthquake wasthe first sign of trouble whenit hit in January.Could it have been a moredifficult year? It's certainlythe toughest I haveexperienced as an adult, andI have learned the value of getting up each morning, andgetting on with business.-- Francis
3389 Sheridan Street #434Hollywood FL 33021, USAPO Box 3109Kingston 8, Jamaicaphone: 954-323-2552phone: 876-880-8653fax: 509-272-7966francis@fwconsulting.comwww.fwconsulting.com
The audio podcast ofthis ezine is about 18minutes long and can befound atfwconsulting.podomatic.com.
ExpressmonoRail at Flickr
 
Issue 1Page 3
3
Snow White and the Many Dwarves
Many Caribbeancompanies are trapped ina bubble of their ownmaking. They havearrived at a point at whichthe CEO or ManagingDirector is the brightest,most energetic andcreative person in thecompany, and there is nopossible successor. TheirVice Presidents, Directorsand managers are faithfuland loyal employees whoare quite good at followingdirections, but none of them has what it takes tosomeday run the companythey have served for solong.As I work with thesecompanies, I haveobserved somebehaviours that tend tokeep the status quo inplace.In many cases theyoriginate with the CEOherself, but they appear toproduce positive results,so there is no pressingreason to change.However, over a period of months and years thesehabits coalesce into a kindof policy that results in theSnow White Effect -- astrong CEO, and a bunchof much weaker,undeveloped managers:the many dwarves. Oncethis effect takes root, it'sdifficult to dislodge evenwith the most enlightenedexecutives at the helm.However, it's notimpossible to change.Executives and boardsmust come to understandthat their job is to bring upa new generation of leaders, not just ensuretomorrow's profits. To doso they must examine andconfront the degree towhich they have fallenprey to the Snow WhiteEffect.
What is the SnowWhite Effect?
Companies that arestuck in this mode areoften unaware of it. Things seem to begoing well, and the keyperformance indicatorsmight all be moving inthe right direction,giving the board someconfidence that the firmis operating on a soundfoundation.However, it only takesthe sudden departure
of the company's topexecutive to illuminatethe cracks that haveexisted all along. Theyshow that the CEO'senergy, charisma andability to motivate otherswere a function of hispersonality, and didn'ttruly reside in theinstitution. Results beingproduced came aboutbecause there was oneexceptional leader, andlots of mediocre followers.Other indicators might be:
1.
Leadership that hasbeen in the same hands
 The Idea in Brief Here in the Caribbean we have a number of companies that are initially successful but are unableto grow past a certain size, no matter what they do. In many cases, that size corresponds to aheadcount of 150-200. which scientists tell us is the maximum number of people that can worktogether, and be managed closely by one person who doesn't delegate.When companies cannot scale up to the next level, they never exit the startup phase and achievetheir full potential. The cause can sometimes be traced to a CEO who behaves as if he is special(Snow White) and is surrounded by a lack of talent (his many dwarves.) To grow, regional companies need to ensure that they train leaders, not develop personalities, andpush their CEO's to delegate differently while demanding higher skills from managers.

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I enjoyed your Snow White article. Not only are your insights accurate - they are universally true. I retired after many years working at a regional level with a Fortune 500 multi-national American company and can site many examples of the types you articulate so very well. I find your frequent use of female gender names for CEOs very interesting, and reflective of current reality.
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