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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:
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.