Lonely at the top

DIE ZEIT, Forum by Ulrich Jordan, August 29, 2013

In the executive suites of German businesses, conflicts are seldom waged openly – one reason for the frequent failure of top managers

»We tend to avoid conflicts«, Martin Blessing, CEO of Commerzbank, told his staff on the bank’s intranet at the beginning of August. A few months ago, Heinrich Hiesinger, CEO of ThyssenKrupp, stated in the ZEIT magazine: »According to the annual assessments of our senior managers, 95 percent of them are well or ideally qualified for the future. If that were the case, we wouldn’t have any problems, but we do. (…) The assessments weren’t open and honest.«

Germany’s executive suites are often compared to shark tanks. But that’s a poor analogy: Sharks do not live in groups, and if they attack each other, they do so openly. In the executive suites, however, people work together as a group, and they tend to ambush each other. Different opinions are not expressed, disputes are not carried out. Feedback is neither desired nor provided.

The consequences can be fatal. Business issues remain unsolved. Interpersonal conflicts contribute to the failure of managers. I remember for instance a conversation with the CEO of an international organization with several thousand employees in which we talked about the gruff behavior of one of his senior managers. His answer to my question whether he had discussed this with him was amazing: »I cannot tell my top-level staff that they should do something differently. This would only lead to frustration.«

Or: A member of the Executive Committee of a major German enterprise complained about the fact that it took weeks to agree on the minutes of the Executive Committee’s meetings. The reason: The controversial discussion was not carried out in person in the Executive Committee’s meeting, but afterwards when editing the minutes.

A third example: The business data of an enterprise are alarming. A plant has to be closed down. In the townhall meeting in which the closure is announced, a shocked employee asks the management: »Why have you never told us how bad the situation really was? Jointly, we might have been able to find a solution.«

What are the reasons for this avoidance behavior? There is no group of people in an enterprise who needs to see reality more clearly, who takes more important decisions, who carries more responsibility and who is criticized sharper than the executive committee. And nevertheless they seem to be the ones who are given the least feedback – from their subordinates, their colleagues and the members of their supervisory boards.

It is the fear of loss that inhibits openness and constructive criticism – loss of one‘s job, loss of privileges, loss of contacts and loss of power. Subordinates very seldom give their bosses feedback, criticizing their behavior. On their way to the top, many top managers have learned to act with political savvy – an important skill that can, however, be the undoing of the organization. Most senior managers avoid conflicts with their colleagues. They are responsible for one department, and although there are numerous interfaces with other organizations, they do not criticize much: to avoid being criticized themselves.

Problems aren’t tackled. Americans call this the »elephant in the room«: Although a conflict is plain to see for everyone, they act as if it wasn’t there. The management levels below are the ones that have to handle it. Few members of supervisory boards are able to give the members of the management boards feedback on their performance and their behavior. That usually happens only shortly before a manager is asked to leave »by mutual agreement«. In fact, many senior managers have never learned how to handle problems openly and constructively. How are they supposed to – it is usually not a part of any university curriculum in this country. Some bosses do not have to acquire this skill – they learned it at home or copied it from a good superior. There are, however, many who do not know how to settle conflicts. Overestimation of one’s capabilities, little emotional intelligence, and the inability to learn from experience, in particular from failures, are the main reasons for the derailment of managers. This has been proven by a number of studies.

It takes two things to prevent such failure: The manager’s willingness to analyze himself critically – and a counterpart offering clear feedback. It may be helpful to ask neutral external consultants who take an unbiased look at the problems in the company.

If, however, there is no-one to act as a mirror – neither a subordinate, nor a coach, a colleague or a superior – a failure becomes more probable. This seems to be corroborated by decreasing duration of employment of members of executive committees.

What are the solutions for constructive criticism, open feedback and productive conflict?

First of all: Being a role model. CEOs like Frank Appel of Deutsche Post, Heinrich Hiesinger of ThyssenKrupp or Frank Mastiaux of EnBW set an example by calling a spade a spade – internally as well as externally. They thus set a standard against which the other members of the executive committee and all senior managers in their companies will be measured. And they make sure that in their companies challenges are tackled.

Second: Employees. The farther employees work from the top managers, the greater their honesty. If you really want to know where there are problems, it’s worthwhile to take a walk through the production plant or the call center, talking with employees and listening to them. Apprentices tend to speak frankly, as well. The general rule: Managers must be honestly interested in the opinions of their employees and they must keep asking for feedback on how they do their jobs. Honesty must be rewarded. Even and particularly when it hurts.
Third: Customers. Everything produced in a company should serve the goal of lasting customer satisfaction. This is why regular neutral customer surveys show in which fields an organization is regarded as better or worse compared with its competitors. It is important to take this feedback seriously and to use it to optimize one’s business processes. If the company’s management then puts the business results, the employees and the customer surveys in relation, it will obtain a good knowledge of what works well and what doesn’t. And it will almost always find out that the managers providing qualified feedback achieve the best results with their teams.

It is not only the results that improve when the management discusses controversially and constructively. Plain language is also essential for employee commitment.