LETTERS FROM THE GLOBAL PROVINCE
The Magic of Strategy, Global Province Letter, 25 September 2013
Aristotle’s opinion was that friends hold a mirror up to each other; through that mirror they can see each other in ways that would not otherwise be accessible to them, and it is this (reciprocal) mirroring that helps them improve themselves as persons. Friends, then, share a similar concept of eudaimonia [Greek for “having a good demon,” often translated as “happiness”] and help each other achieve it -----Massimo Pigliucci, Answers for Aristotle: How Science and Philosophy Can Lead Us to A More Meaningful Life
Re-Creating the Creators. Aristotle teaches that the very act of friendship makes the communicants over into something they would not otherwise be. At its best each friend moves to a higher plane, leaving some of the dross of this world behind, as each gains focus from the mirror and reflection provided by every soul in attendance.
Our firm has helped corporations far and wide evolve into more agile creatures, a consulting practice that has led us through thousands of company dialogues for more than 50 years. We have found that the strategic experience, if it is to work, is itself an act of friendship where the chief executive encourages the widest possible dialogue and where the widest possible understanding is created. Goals seem to become tangible and real, even though they are merely good dreams that are conjured up in the minds and hearts of the strategic celebrants, vivid and at the same time altogether invisible.
Nowhere was this sense of community, this act of being a communicant, more apparent than in the strategic labors of our good friend Francis P. Lucier, chief executive of Black and Decker (1975-1984) at a time when it rose to dominance of the tool market in the United States. It had long thought that it already led the pack, but, in fact, previous to his “good, better, best” strategy it was a far second to Sears Roebuck.
We reprint here “Getting Up Everest Through Strategy,” the summation of our conversations with him as he was stepping down as chief executive, which appeared in sundry publications in the last years of the 20th century. He was fond of the Everest metaphor in describing strategy and success—that it was a long slog up the strategic mountain before one emerged from the also-ran status of most corporations, but that such success could come apart in no time at all, since it is all too easy to come off the peak through a fatal mixture of arrogance and ignorance.
What we knew then is that he was a master of strategy and of friendship. What we know now is that he understood very well that for a strategy to succeed his executive team would have to be transformed into something better and bolder by the act of strategic formulation. The strategic process is a success if the principal executives see their mission and future in an entirely new way.
The Business of Getting Up Everest-Through Strategy
About a week ago my wife--a writer with an extraordinary interest in matters of food--strained some wisdom from an essay by a French chef that set me to smiling. “A good chef," went the epigram, "will kill his master in ten years.”
That, too, is the case with strategy in any of its forms. Those of us who agonize over questions of corporate strategy realize that it is deliciously pernicious in its most effective form. If a strategy has any merit, it will completely transform the hive where it's formulated and, in fairly short order, kill off the corporate drones and worker bees who fretted it into existence.
Strategy, particularly at moments of technological turmoil, quickly obsoletes the present. The minicomputers and word processors I brought into my previous business made me and my colleagues technical illiterates in our chosen craft. And the flexibility afforded by these new toys has undercut the value of the rather rigid product offering which was our stock and trade. Our strategic ramble toward the microchip will surely kill off the business I know, and its leaders, in less then 10 years. I am not altogether clear as to what the next business will look like.
With the threat of death (even if some call it 'change') hanging over him, it's no wonder that the everyday businessmen resists strategy with all the wiles at his command. I can’t even begin to list the ways executives across the land deny, frustrate, misunderstand, obscure, bury, filibuster, study-to-a-standstill, defuse in committee, or just plain stall the concept of strategy.
For years a valued colleague of mine would gleefully recount to me interviews where he and chief executives, who were clients, dismissed strategy by saying, “How can you plan a course for tomorrow when the price of oil may double unexpectedly or Congress may suddenly change the way we do business?” According to this line of reasoning, we live in an ever more unpredictable world. Why plan? Live for the moment. "Carpe diem,” said Lord Byron.
Of course, the answer to "why plan" is "why not?" If we're now in an era of upsets, then it's all the more reason to have options and a point of view. Philosophically and economically, methinks, the antidote for uncertainty is a willingness to reckon with ambiguity.
Today the attack on the concept of strategy has taken a new turn. Instead of blaming strategic failures on an impertinent world, apologists for corporate impotence have turned inwards. A host of consultants, particularly at the larger management consulting firms, have discovered "corporate culture." And--ad nauseam--corporate staff people at large corporations across the land are getting into the ‘culture' business. When goals are not met, margins erode, and businesses are not competitively improved, the thinking now is that the corporate strategy failed because it did not take account of the corporate culture.
In simple language, the “corporate culture” is "our old way of doing things." In equally simple language, the apologists are in effect saying that "the corporate strategy" (a new way of doing things) is not "old" enough. This has been the complaint of bureaucrats for thousands of years. The future they find is not like the past.
Imagine my thrill, a summer ago (1983), to meet a man who knew what strategy was all about. In Washington the day before, I'd visited a corporate client who was stumbling around in the strategic wilderness. Once king of the hill, this company was giving its monopoly franchise away to the competition.
In Baltimore I met a man and a company determined to stay on top. The man--Francis
Lucier. The company--Black & Decker. He knew that strategy put his company on top of the mountain. Then chairman, but on his way to retirement, Lucier was beginning to understand his wins-and his sins of omission.Lucier's not supposed to be a strategist. He came up through the ranks at Black & Decker as a salesmen. The cardinal opportunist. But it happens that he also has his eye on tomorrow.
Way back in 1963, as head of B&D's domestic consumer marketing operations, he’d tackled his first strategic assignment. B&D had always thought it was number one in the U.S. consumer power tool market. But a study from an outside consultant gave the company a jolt. Sears was the biggest by a long shot, and this supposed leader was just a second stringer. A GM product line and pricing formula ("good, better, best”) has since brought the company to number one in the U.S. and the world. Black & Decker beat Sears at its own game.
Like the vast majority of great American companies, Black & Decker has developed an excellent U.S. strategy, but has lacked a world strategy. In the last 5 years currency, turmoil and the Japanese have pushed Black & Decker against the wall. During this same period, up to his retirement in January 1984, Frank Lucier began revamping the company along world lines, shedding the independent fiefdoms and other aspects of the company that no longer made sense.
Two bouts with big strategic challenges have given him lots of strategic imagination. In the 3 or 4 hours we spent together I learned too many things to recount here. Clearly he knows that the key obstacle to strategic success is the organization in itself. Nowhere does the dictum, "we've met the enemy and it is us” apply with such force.
Once you know that the enemy of sound strategy lies within, the prerequisites for strategic victory jump into view:
a. Belief in strategy is an act of faith that is the core of strategic action. There's plenty of deterministic evidence around to show us that fate says how our lives and our companies will turn out. To move men and mountains, on the other hand, you have to believe you can. Without a charismatic evangelical disposition fired by belief, the strategic leader will falter.
b. Strategy can't be delegated. This job belongs to the chief executive officer. Maybe he should be called the chief strategic officer. Planning chiefs, whatever their background inside or outside the company, lack the power to form and implement plans that can make a difference.
c. Strategy-making and strategic doing fall on their face if the strategy process does not draw on a wide cut of staff and line managers every step of the way. That means topflight management communication. Strategy, therefore, is the paramount issue of management communications.Early in this century, William James, the father of America's most important homegrown philosophical movement--pragmatism--offered a healthy antidote to scepticism. In the Will to Believe, he counseled us to accept important, unproven hypotheses on faith when doing so will make a positive momentous difference in our lives:
"There are .... cases where a fact cannot come at all unless a preliminary faith exists in its coming ... In truths dependent on our personal action, then, faith based on desire is certainly a lawful and possibly an indispensable thing."
From Lucier, then, we learn that dogged faith, lack of delegation, and hypercommunicatlon make all the difference in strategy. What follows are a few of his thoughts from our conversation back in the summer of ‘83.
Lucier on the Role of Belief in Strategy
"You know great plans that don't have the support of believability, don't go very far. Sometimes plans that are just so-so, that are totally supported by the organization, will beat the competition. It's amazing what it can do."
"I have to say we were all ordinary people doing extraordinary things (becoming number one domestically) ... we were just energized and motivated. It was great...
"You know, we had to bring the salesmen back in every other month and pump them up again. Because the trade (hardware industry) kept them down. The trade, threatening them, said, "You tell Frank Lucier we're not going to change our way of pricing.” And you had to bring then in and say, "Let's stick to our guns. We absolutely are going to stick to our guns."
"Humans try to work for a perfect system and that's what goes wrong in any endeavor. When people are very successful, they want to freeze in the status quo. But things, aren't static."
Lucier on the CEO an Chief Strategic Officer
“My contention is that the chief executive in responsible for operations, planning, and human resources…..Operations you can delegate...Human resources you can partially delegate .... But when it comes to planning you can't delegate any of it."
"So that my observation over time has been the reason that corporate planners have such a tough time is that the chief executive didn't understand that he couldn't be caught in the position of having it perceived that he was delegating planning."
"The operating guys want to challenge the plan because it's change. (A corporate planner as sponsor of change can't hold his own against line officers).
"Because the planning officer can't survive them chewing up on him. They'll get him every time. Only the chief executive can."
Lucier on Broad Management Communication of Strategy
“When I headed the U.S. alone, we had “a planning meeting with the 5 or 6 key executives every month for a couple of days. Monthly, we held a communications meeting with a larger group of managers.”
"In those days, you know, 50 or 60 or 70 people. That's talking to a lot of folks.”
"So, I said, I'd rather be on the side of having the communication get leaked out or stolen to make sure we gave every opportunity for our managers to understand what we're about."
"Two years ago I moved the head of Europe here, so we were next to each other and we didn't have to wait for a formal meeting.""
"I'd rather have something well communicated to get reaction that we may not get in our immediate planning group that's closeted with me.
"We had to really discipline ourselves and say, ‘hey, wait a minute, we're slipping into operating matters which we handle all the time. Let's make sure we just do those meetings for planning.'”
Lucier on The Need for the Chief External Officer
"And I'd say that'& really all a chief executive has time to do. You really ought to be giving 90% to the business. We in the U.S. haven't quite yet organized how we take care of the community things."
"'And Dow Chemical, by policy, I think has done it right. At age 59 or 60, you have to leave as chief executive. Have to. And you are expected to serve as chairman thereafter for a period of time. Take care of the board. Take care of the community things...the chief executive is the president and he is in charge of operations, planning and human resources."
"There's still a strong camp that says, 'Oh, but the chairman needs to be the chief executive officer.”
Lucier on the Japanese
"I think the Japanese get great credit for being technical geniuses ... I think they should really get the marks for being good market researchers...they are always out therechecking to see how they're doing."
"And so they came at us with very good products, very good prices. So, in that part of our business (professional tools) that's 30% of our total business, we have competition from them that's stiffer then anything we've had in the last 30 years."
"We had a whole management layer system when we were organized into separate geographical units. Well, the Japanese don't have that."
"If I had to go back and do it again....I would have a head of the Asian world centered in Japan... I would have put the heaviest weight individual and a team of people there and forced them to be as successful in a Japanese market."
"We know they could be tough. We didn't recognize how unique our revenue and capital investments had to be to stay on top of that.”
"It wasn't the fact that we were a growth company that we couldn't see the Japanese. You know what it was? It was how we were organized ... an a series of country-by-country units.
"Because we were so decentralized, we could not see the total. We really didn't have a handle on the total impact of Japan.”
Lucier on the Move to One World Management
"Al Docker said, ‘I want you to bring the world together, a one-world company.’"
"Two years ago we started to turn the corner. There was great resistance. But I moved the head of Europe over here."
"It was completed just a month ago.”
Strategic Bloopers
"In the early 70's the idea was to make this a one world corporation. This was Al Decker's directive. But we were quite decentralized and did not think through how we were going to deal with world-class competition. I did not get this debate going at Board level when we should have. Either we could have centralized in Tucson, or we could have created 3 corporations capable of competing around the world--one in Europe, one in the Americas, and--a daring idea--one smack in Japan.""I dealt with Japan half heartedly. We tended to treat it as a marketing entry--rather then a total headquarters endeavor. To win, we really should have put big resources and a team of our best players in the 2nd largest product market in the world."
"Looking back on the McCullough acquisitions, we bet too much of our company on it. Especially since we did not have a track record with acquisitions. I proposed it, and we were simply biting off too much given our lack of experience. And our initial research on the deal was weak. Divesting it was appropriate, and a sign of strategic willpower."
Lucier on the Tough Times in Business
"The backside of Mount Everest is a hell of a lot steeper than the front side."' (Results plummet faster then they rise).
“There are things that just had to be done over the last few years…And hey, it's a lot more fun when you are winning than when you're losing...It really tries people. We've had a lot of early retirements. Many slashes."
"One of the toughest things about business is you really don't learn the CEO's job in good times. You really do learn through adversity. In my early years we had it kind of easy. My real growth as a CEO came later--perhaps the last 3 yearsof a 10 year cycle."
"As I see it, timing is important in everything. You need a little of the 'tough' in your career to got molded and become good. But success flows to us in the good times, and we all need a little good fortune. I, in my own time, have seen three generations of guys each shaped by different circumstances.
-the group from 1929 to 1949 simply ran their shops in difficult times, and were a very hardy bunch.
-the postwar era (1949-1969) was one long good time--an easy era for managers. Chief executives during that period had an easy roll in a period of unbelievable economic growth and consistent political leadership.
-But in 1969, high inflation, oil shocks, and currency explosions began. The years 1969-1989 will go down as a time where managers really have had to prove themselves, since it will be a mix of the very bad and the very good. It won't be a free ride, but a good man will have found enough open roads to show his stuff."A Postscript--From President Laurence J. Farley's Letter to Shareholders--Black & Decker 1984 Annual Report.
"In our major professional markets, we believe that during 1984 we performed better then our Japanese competitors.”
Lucier Takes His Last Walk Up Mount Everest. Frank Lucier passed away last October, leading a very full life to the end. Obituaries, no matter how detailed, never tell the full tale. We cite just a few of the omissions here. He was from Northampton and was lucky enough to go to Williston Academy in Easthampton, a very generous good school which helped a number of lads who came from families that had no funds to spare. He credited it with giving him a leg up in life. He was generously and convivially involved with religion right up to the end. He never forgot a debt and always went a mile for those who gave him help in life. The biographies pass over his time at Stanley, another fine company where he learned a lot and where he more than made his mark. Stanley Works eventually purchased Black and Decker.
An obituary in the Florida Times Union will give you some sense of the man. “Francis Lucier is a self-made executive from Northampton in the western part of Massachusetts. His father was a policeman there for 35 years and and his mother, Viola, a homemaker.”
P.S. Bartram’s Garden was the horticultural supplier to men of substance in colonial times and even in the years just after independence. Importantly, the participants at the Constitutional Convention took a break from deliberations midstream and visited Bartram. They were so divided that a constitution might never have happened. But they took a daytrip to Bartam’s Garden, a convivial place that thrust foes into intimacy. It is thought that this contact in a green setting caused them to reach consensus. Similarly, a good chief executive tries to put his energetic and often divisive troops into warm correspondence with each other.
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