You are on page 1of 2

Thegreatrepeatableleader

February23,2012 HBR.org

ByChrisZook

ThefollowingpostoriginallyappearedontheHarvardBusinessReviewBlogNetwork.
AdmiralLordNelson,Britain'sfamousnavalleader,owedhisenviablerecordofvictoriestotheabilityofhisofficerstomakesynchronizeddecisionsinthe
heatofbattlewithoutcommunicatingdirectly.
Thesecommanders,personallytrainedbyNelson,hecalledhis"bandofbrothers"andtheytooktherightdecisionsbecausetheyknewwhathewoulddo
intheirshoes.ByprojectinghiskeyprinciplesofdecisionmakingandhisstrategyouttothefrontlineNelsoncreatedafasterandmore
adaptableRoyalNavythatregularlyoverwhelmedfarlargerenemies.
FewbusinessesarelikeNelson'sNavy.Ratherthanspeedinguptheirdecisionmaking,they'reslowingdown.Ofcourse,they'redoingitwiththebestof
intentions.
Here'showitworks.Inanefforttocoverallthebasesinanuncertain,changingworldcompaniesaretryingtogivethemselvesasmanystrategicand
organizationaloptionsaspossible.Indoingso,however,theyaremakingthemselvesunconsciouslymorecomplexorganizations.Itisatrendthat'sslowly
andsilentlykillingthem.Complexityturnspeopleinwardanddistortsinformationflow,slowingthepaceofdecisionmakingdownandmakingthedecisions
themselvesincreasinglyincoherent.
Howcanleaderspreventthisfromhappening?
TofindtheanswertothatquestionIattendedasessiononleadershipattheWorldEconomicForuminDavos.Itwasledpeoplebywhohavedevotedtheir
careertothistopicandincludedDanielGoleman,coineroftheterm"emotionalintelligence."Whatemergedwasaconsensusthatthemostsuccessful
leadersinthefuturewillbethosewholikeNelsoncancuttheirdistancetothefrontlinethroughthreekeytraits:theabilitytobeauthentic,
empathywiththecustomerandfrontline,andtrueselfawareness.
AsIsatthroughthesession,IrealizedthattheseprinciplesmeshedcloselywiththeworkthatmyBaincolleagueJimmyAllenandIhadbeendoingin
strategy.WehavejustcompletedathreeyearstudyatBain&Companythatidentifiedthe"designprinciples"ofbusinessesthatoutperformandoutadapt
theirrivals.Wecalledtheseprinciplesthe"GreatRepeatableModel"becausecompanieswhosebusinessmodelsembodiedtheprincipleswereableto
replicatetheirsuccessesoverandoveragain.
Let'sreviewwhatthetwosetsofprincipleshaveincommon:
Thefirstdesignprinciple,the"principleoffocus"demandsaclearsourceofdifferentiationatthecoreofabusinessthatcanbereplicatedandadapted
overandovertonewsituations,markets,applicationsbecausedifferentiationishowyoumakemoneyinbusiness.Typically,80%ofacompany's
managersbelievetheircompanyhasthisdifferentiation.Butonly8%oftheircustomersagree.Thisisahugegapanditdemonstratesthatmanagersare
foolingthemselves.Thisiswheretheleadershipprincipleofauthenticitycomesin.Itisallaboutbeingabletorecognizethisgapandfindwaysofreally
deliveringsomethingdifferenttothecustomer.
Theseconddesignprinciple,the"principleofembeddedness"istheabilitytohardwirethekeyvaluesthatshoulddrivedecisionsandbehaviorsallthe
waytothefrontlineroutinesthattouchtheendcustomerandendproduct.Thisisalsonotthateasy.Infact,over60%ofemployeesintheaverage
companysaytheyhavenoideaofthestrategyoritskeyprinciples.Imagineifthatweretrueforamarchingband?Thisiswhereyouneedaleaderwhois
genuinelyempatheticandintouchwiththeconcernsoffrontlineemployeesandseenasoneofthem.Aleaderlikethiscandefinethestrategythroughthe
language,incentives,measures,andcapabilitiesofthepeopleexecutingit.
Thethirddesignprinciple,the"principleofadaptability"istheabilitytoturntherateoflearningintoacompetitiveadvantagethroughthewayacompany
measuresqualityandperformanceandhowitinterpretswhatitfinds.Centraltothisisselfawarenessandawillingnesstoquestioncoreassumptions.It
startswithbrutalhonesty:competitorswillcatchup,customerswillraisetheirstandardsandtheoldrepeatablemodelwillneedtobeabetterrepeatable
modeltowintomorrow.
ThecloseconcordanceofourbusinessmodeldesignprincipleswiththeprinciplesofgreatleadershipexplainwhysomanyoftheGreatRepeatable
ModelsofthecompanieswestudiedalsohadGreatRepeatableLeaderswhosuccessfullysteeredtheirbusinessesthroughanumberoftransitions,
continuallyrepeatingtheirsuccessinadjacentmarketsandproductcategories.
Interestingly,quiteanumberofthesewerefamilycompaniessuchasIKEA,TetraPakorEnterpriseRentaCar.Hereclosenesstothefrontlinewas
bakedintotheDNAofthesuccessivemanagersandwhereasharpdifferentiationwascentraltothereasonforexistenceofthecompany.Wealsosaw
thesecharacteristicsinsomeoftheinstanceswhereaCEOrestoredstrugglingcompaniestoformerglories(LegoandP&G,forexample).Inallthese
casestheCEOsrefocusedonarejuvenatedversionofthecoredifferentiationanddrovethatfocusdownintothedaytodayroutinesofthebusinessby
listeningandpayingcloseattentiontothefrontline.

Bottomline:GreatRepeatableModelsneedGreatRepeatableLeadersandGreatRepeatableLeadersneedGreatRepeatableModels.Companies
choosingleadersandleaderschoosingcompaniestakenote.
ChrisZookiscoheadoftheGlobalStrategyPracticeatBain&Company.Heiscoauthor,withJamesAllen,oftheupcomingbook:Repeatability:Build
EnduringBusinessesforaWorldofConstantChange(HBRPress,March2012).