Chapter OneThe Provocateur
Organizations today require a new kind of leadership because technology, the global economy, and the social landscape are altering the very nature of business. I call these new leaders Provocateurs to distinguish them from the Generals who successfully led companies in the past.
Provocateurs build communities; Generals build companies. Provocateurs put the relationship with the customer at the company’s center; Generals put the product (or service) at the center. Provocateurs know that a brand is based on communication with customers; the stronger the communication, the stronger the brand. Provocateurs empower employees; Generals establish hierarchies with command and control. Provocateurs value openness, interchange, and innovation; Generals maintain secrecy, control communication, and distrust novelty.
In business, Steve Jobs, the president of Apple Computer is a Provocateur; Larry Ellison, the CEO of Oracle, is a General.
In sports, Phil Jackson, coach of the Los Angeles Lakers, is a Provocateur; Bobby Knight, former head coach at Indiana University, is a General. Phil Jackson has said that every successful coach needs “the intuitive ability to change a conflict situation into a team-building one.” Knight, says Bill Walton, is a coach “whose success is based on bullying and intimidating people. His style is rooted in boorish behavior, with which he psychologically terrorizes his players for his own benefit.”
In education, Charles Vest, president of MIT, is a Provocateur; John Silber, chancellor of Boston University, is a General. Vest recently announced that MIT will be making the materials for nearly all of its courses freely available on the Internet. In 1997, BU dropped its 91-year-old football program “largely through the efforts of despotic chancellor John Silber.”
In media, Oprah Winfrey, chairman and CEO of Harpo Productions, is a Provocateur; Rupert Murdoch, chairman and CEO of News Corp. is a General.
Provocateurs, as we’ll see, are riding the tide of history. They, not Generals, will build tomorrow’s great companies. They will do so because their beliefs are more suitable for today’s business realities than the Generals’.Customer Relationships Are Key
Provocateurs believe that the relationship with the customer is at the center of the business, not The Product or The Service. The product is important, but so is after-sale service and delivery and labeling and financing and every other element of the customer’s contact with the company. Provocateurs say, “Our goal is to build trust, to make the experience of dealing with us great.” A Provocateur’s goal is to have the customers so involved in the business they feel they are important players in the enterprise’s success, which of course they are. Some people who purchased an Apple computer are so engaged with the Apple mystique, they put Apple decals on their cars. Some people who own Harley-Davidson motorcycles have the brand’s logo tattooed on themselves.
Provocateurs believe they should build a community in which the members take care of each other. David Hayden, the founder of Magellan, the first search engine, as well as CEO of Critical Path, a San Francisco—based firm that provides email services to large companies, said, “I think leadership has changed in the last eight years in a marked way. Today’s successful business world is about creating communities, which really ties into a collaborative ethic, rather than a competitive ethic. The issue that the CEOs or leadership teams in all new successful companies have addressed to some extent–and I think is tied directly to the extent of their success–is that they are more collaborative, not only within the company, but within the marketplace. They are community builders.”
Generals believe that hierarchy, the chain of command, is the best structure. The General gives orders to the colonels, who give the orders to the lieutenant colonels, who give the orders to the majors, who give the orders to the captains, who give the orders to the lieutenants, who give the orders to the troops. In this order, the person closest to the situation–in business, the customer–has the least authority to make a decision.
Provocateurs believe that employees should make decisions themselves through dialogue and example. Patrick McGovern, the founder and chairman of International Data Group, told me, “We call our CEOs the Chief Encouragement Officer”–IDG has 105 companies (and more than 12,000 employees) around the world–“and their role is to encourage and empower people by the trust they have. I always observed that if you go through the ‘Prove-this-to-me, prove-that-to-me’ exercise, managers feel, ‘Well, I guess my competency is distrusted here.’ If you expect people to do well, they will believe they will do well. They actually execute in ways to get that success, so it becomes a self-fulfilling prophecy.”
With the military as their model of organizational structure, Generals believe the way to keep people in line is through command and control. Since many Generals see people as motivated only by greed and fear (Napoleon’s observation), they use bonuses and threats–with an occasional public execution–to maintain control.
Provocateurs believe that employees will be motivated if they understand and subscribe to the organization’s goals and needs. As a result, the leader who is a Provocateur keeps very few secrets from employees or the outside world. (As a fringe benefit, Provocateurs tend to receive more and better press coverage for their businesses since reporters like straight-talking, knowledgeable sources.)
Generals believe secrecy is vital. Since loose lips sink ships, a General is disposed to be highly secretive about sales, product strategies, and every other single thing the company does. Former Ford CEO Alex Trotman was secretive and once became so angry that Fortune was going to publish an article identifying Bill Ford as a candidate for chairman that Trotman ordered the company’s general counsel to find out if someone had leaked the story. “Company lawyers, along with attorneys from Ford’s Washington law firm O’Melveny & Myers, formally interviewed members of the board, including Bill Ford, as well as some top executives. They also searched business and personal phone records looking for calls to news organizations.” The investigation was inconclusive, and it is hard to believe these tactics improved Trotman’s relations with his board.Leadership Cannot Be Separated from Marketing
Provocateurs believe the leader’s most important task is marketing. Since the relationship with the customer is the business’s center, one cannot separate leadership from marketing or marketing from leadership. In the world of the Generals, a business leader could have come out of finance, manufacturing, or operations; marketing was just a department down the hall. Provocateurs understand that a CEO’s primary job is communicating with customers to benefit the company, the brand, and all their constituencies. The stronger the communication, the stronger the brand.
Leadership and marketing are no longer two separate facilities. They are entwined because you cannot separate a company’s marketing from its brand and leadership. The relationship with customers is the essential company center now. The business builds on that relationship through a concept I call dialogue data, which involves collecting and analyzing information about customers to learn their wants and needs. A company can collect valuable data about its customers through ongoing dialogues across all communications media–online, phone, mail, surveys, focus groups, and more. This data goes beyond simple facts and figures (i.e., his favorite color is green; she is 37 years old) to habits and behaviors that can help determine how best to reach the customer. Provocateurs understand that these are not conversations just to build a relationship (although they help do exactly that); they are designed to pinpoint the needs, wants, and desires of a specific consumer or business customer.
Provocateurs believe that markets are more than their demographic characteristics. A 23-year-old woman and a 60-year-old man can share an interest in four-wheel-drive vehicles. A high school dropout and a Ph.D. can share an interest in woodworking . . . antique outboard engines . . . gardening. People are joined by their interests, values, hopes, and dreams, and any individual belongs to dozens of different communities.
Generals believe that business is a zero-sum game. If someone else wins a sale (or a client, or a patent, or a bid), the General loses. If he wins, someone else loses. The pie is only so big, and the bigger my piece, the smaller yours must necessarily be. It is a worldview that still makes sense in some situations, such as the competition between Sony’s Betamax and JVC’s VHS to set the standard for videocassette recorders, but those situations are far fewer than the General assumes.
Provocateurs believe that business is not always a zero-sum game. Because knowledge and ideas are abundant, it is possible for everyone–customers, suppliers, employees, and even competitors–to come out ahead. Provocateurs do not believe that if they win, someone else automatically loses; they believe the pie can grow. More competitors are cooperating to buy items like auto parts, office supplies, airline tickets, cleaning services, and other goods and services that do not affect the business’s core competency.
Provocateurs believe that the farther you are from the scene of action the more difficult it is to know what’s happening. A leader from the traditional military/church hierarchical structure risks losing touch with customers and their concerns. In contrast, the flatter the structure, the closer the business leader is to the customer, where everything happens. The Provocateur still recognizes the need for some hierarchy, but believes that the fewer the levels, the better for everyone.
The Provocateur still needs control. The orchestra conductor has to establish the beat and cue the timpani. The theater director has to tell the actor he’s rushing his lines, tell the set designer the door is in the wrong place, tell the costume head the dress is the wrong color.
Provocateurs work continually to tear down the walls between departments and divisions within the company, between the company and customers, and between the company and suppliers. They thereby create an atmosphere in which employees trust themselves and their decisions. (How many executives complain, “I can’t get my people to take any risks”? They don’t take risks because the fear of punishment is greater than any expectation of reward.)
A Provocateur starts with a premise, such as
* Personal computers are useful (Apple)
* Women have questions about their health (iVillage)
* All-natural packaged macaroni and cheese is healthy (Annie’s Homegrown)
and builds a community of customers, employees, and suppliers around that premise. A successful Provocateur acts like a great mayor for the community, creating excitement, momentum, and engagement. The community is inclusive rather than exclusive. It encourages more communication, not less. And, to a greater or lesser degree, it involves every stakeholder in as many elements of the business as possible.
Provocateurs are still capitalists. They embrace the idea that a capitalistic system is the best way we have found to harness human ambition, creativity, and greed. It simply works better than socialism or communism or statism. Provocateurs embrace the 1960s ideal of a shared openness and a democratic way of doing things, so they do not espouse unbridled capitalism with its attendant ills such as child labor, sweatshops, and environmental abuse.Armies Need Generals, Businesses Do Not
The General model of business leadership came out of the model provided by the military and the Catholic Church. To win a war, an army must have one General, a Napoleon, a Wellington. A ship must have one captain. The Catholic Church has one pope. Authority is structured in the form of a pyramid with the General on top.
During the Industrial Revolution and the rise of large business enterprises in the nineteenth century, corporate leaders took the General model as the only one that made sense. It was the only way to organize large groups of people for a common goal. Generals believe that business is a form of war, with enemies, strategies, victories, and troops. The role models and the social environment that these leaders knew were based on how armies win wars. If you were Ford, you set up your organization as if you were an army–and the enemy was General Motors, Chrysler, American Motors, Studebaker, Nash, Toyota, Nissan, Volkswagen, Volvo. What better model than an army led by a General in a battle in which we’re out to annihilate our competitors?
Generals find new ideas and innovation uncomfortable. Generals are never sure what the flakes down in the lab or the wackos at the ad agency are going to come up with next. They take a literal approach to business, putting their faith in rules, regulations, and policy.
Because they are uncomfortable with creativity, Generals do not give innovation a high priority. They believe it is more important to produce a quality product with periodic incremental improvements and to keep employees lined up and ready to take orders than it is to introduce something radically new and, by definition, uncertain. To make up for the lack of innovation within the company, their businesses usually have had to buy it–hence the mania for acquisitions.
The General approach to business worked for a long time because both employees and managers accepted the model as the one that made the most sense. When they chafed, they changed companies rather than trying to change the system.
Unquestionably, Generals were right for their times. They built great companies. They were able to get results, organize and move masses of people in one direction for one goal, and were able to increase manufacturing, reporting, and financial efficiencies dramatically. Many of the rules, policies, and principles they established and lived by remain valid–instituting budgets and cost controls, being first to market, using just-in-time manufacturing, capturing market share, buying weak competitors, and much more.
That said, the Generals who lead companies today face an increasingly harsh and unsympathetic world. They will have to change (or be replaced) or eventually their businesses will face sickness, merger, or death. Because of the sea change currently under way, the future belongs to the Provocateurs.A New World Requires New Leaders
The world has changed. “Fundamentally, the psychology of business and the psychology of information flow is shifting underfoot,” says John Kish, the former president and CEO of Verbind, a Boston-based company that tracks customer behavior. “Old-style companies that believe in the military point of view are going to say, ‘No, it’s all command and control, and if we don’t see it, we can’t own it . . . we don’t want to deal with it.’ The truth is, those companies are going to find themselves succumbing to the same problems that the long-distance carriers currently see, which is commoditization.”
We are only beginning to see the effect technology has on the way companies sell and buy products and services, the way prospects learn about offers, the way leaders manage their organizations. G. Richard Wagoner Jr., president and CEO of General Motors, tells me that the GM model, which worked well 20 years ago, does not work today, if only because technology has changed how corporations operate. They can do satellite broadcasts, send email over the Internet, respond to email from around the world.
“The tradition of independent operating units throughout GM gets back to the very roots of the company, which was all by acquisition,” says Wagoner. “Because our industry is integrating globally and leveraging globally and because we need economies of scale, we can no longer use that model.” The model is now one of global cooperation and collaboration.
I spoke with Michael Dertouzos, the director of MIT’s Laboratory for Computer Science, shortly before he passed away in August of 2001. He said that “the best companies in the world are those that empower their people by giving them a freedom that’s nonspecialized. Henry Ford wanted human labor to be specialized. He wanted it exploited, like a cost that should be minimized, and it was expendable. If this part didn’t work, you tossed it and put in another. That was his idea of mass production. The companies that emerged in the late 1980s discovered that human beings count. They said, ‘You should be a shipping clerk, but we are not going to tell you what a shipping clerk does. You are going to make our company the best in the world by doing what is right for shipping, and we are going to empower you to go out and buy your own machines and broaden your outlook.’ It was really a new discovery.”
Into the 1970s, an implied social contract carried over from an earlier time that said, “I will work hard and be loyal, and in exchange the company will guarantee me a job.” At a time when the big corporate armies were expanding, there was reason to be loyal because the company took care of its own. But the downsizing that swept corporate America in the late 1980s and the 1990s broke that contract. Employees began to realize that although they might be loyal to the corporation, the corporation was not necessarily loyal to them.
We’re moving into a period when honesty and openness will create leadership opportunities for people at all levels. People are starting businesses at a record clip because creativity in leadership allows people to try many different things. True Provocateurs are pleased when an employee quits to take a bigger, more responsible job or to start her own business, if only because it tends to validate the original hiring decision. At the same time, Provocateurs tend to retain the people they’ve hired because they allow–indeed, encourage–them to start things within the organization.
With low unemployment, power naturally shifts from the company to the individual. But within the past five years or so, there’s been a psychological shift as well from “I need a job, I want to be loyal, I’ll do what you tell me” to “I want a job that makes the most of my abilities. I’ll be loyal as long as I’m challenged and rewarded.”
Power has also shifted from the company (or the retailer) to the customer, who has become even more important in driving what a company develops and what it does. The customer’s power has grown because she now has access to so much information about products and services.
This is a key point. Power is shifting to employees and to customers, a shift driven by technology and by, I suspect, a human need to feel in control. In control of one’s life, work, and purchases. We no longer have to rely on a salesperson’s word; we can compare features, prices, and benefits in a way few people could even 10 years ago.
“The global reach of communications makes the individual finally very powerful, both from a sovereign state and a sovereign corporate power perspective,” says David Hayden. “Leaders are now emerging who at least intuitively understand that and are working along those lines rather than along the older line, which is to annihilate your competitor and be secretive.” The leader who does not recognize and embrace this power shift will become more and more impotent.
The World Wide Web is accelerating communication, and we can never return to a simpler time. The world has changed because communication among people, facilitated by the Internet, is so open and so immediate. You have friends in other companies, you email them, you talk to them, you are in the same communities with them whether they live in Detroit, New York, Boston, or across the globe. The walls between and within companies have become porous. So have the walls in the selling process. When you want to buy something, from a Palm Pilot to a week in Aruba, you can go on the Internet to find out what’s best for you and who’s offering the lowest price.Leading in a Fragmented World
Our world today is more fragmented than it was 50 years ago. On a global level there are more countries now than there were at the end of WWII. At the same time, pictures from space reinforce that Earth is a single, fragile sphere in a vast universe.
In the West there has been a fragmentation of media as a few mass magazines and television networks have given way to the rise of special-interest publications, 500 cable television channels, and now the Internet. Likewise, business is less focused on groups or mass audiences. Instead, marketing has become a process of defining and reaching smaller and smaller market segments, a process that ends at some companies when each product or service is unique for each customer. It is therefore becoming increasingly difficult to move large groups in one direction, especially given the diversity of employees, managers, customers, suppliers, dealers, and regulators.
It is far more appropriate these days to build a rock band, a theater group, or a circus where no single performer is much more important than another, and the role each plays commands respect. With the growing sense of social and media fragmentation, people feel a sharper need for community.
But Generals do not build communities. They build proprietary companies. They build dictatorships. That is a far less effective management style today–and will be worse in the future–because, more and more, a firm has to rely on a network of partners who must cooperate to be successful. It must offer employees opportunities that are meaningful to them. It must build a relationship with each customer, not simply make a sale.
Like many things in life, leadership ranges across a continuum. At one end is the pure General, at the other the pure Provocateur, and there are probably few leaders who stand at either extreme. Rather, we all contain some elements of each.
Nevertheless, overwhelming forces–social, technological, economic–are turning the tide of history in favor of the leader as Provocateur. The more we think and act like Provocateurs, the better we will do in the twenty-first century. Provocateurs will be the ones who understand that the Internet is about communication, not information; that leaders must build a community rather than a company (and how to do this); and that customers have become nomads (and what to do about it).
Successful Provocateurs are a combination of educator, entertainer, Sherpa guide, and head concierge. The educator establishes the organization’s mission clearly and visibly and uses every opportunity to teach through example, word, and deed. The entertainer creates an environment in which people feel connected; they entertain in such a way that people do not feel they are being passively amused. The Sherpa guide is able to conduct others–customers, employees, suppliers, even entire companies–along an uncertain path, developing individual skills and strengthening commitment at every step. The head concierge knows both what customers want and where to find it.
Different leaders reflect different mixes of these qualities. Some Provocateurs are more educator than Sherpa guide, just as some are more entertainer than concierge. But all share these elements.
Also, a would-be Provocateur who has only the characteristics of, say, the educator is not a business leader but an educator. In other words, business leaders must still manage their organizations; they must provide vision, goals, appropriate tools and training, and rewards. The real issue is how one manages in this age of the Internet and that, I believe, requires dexterity in all four roles. I’ll show how leaders with these qualities create a provocative environment, find and challenge the best employees, and form an inner circle that can complement the leader.
By the end of our journey together, you will see why it is so important to become a Provocateur for your organization and for yourself. In the end, it brings not simply business and professional success, it offers a richer and more rewarding life.From the Hardcover edition.
Excerpted from The Provocateur by Lawrence Weber. Copyright © 2002 by Larry Weber. Excerpted by permission of Crown Business, a division of Random House LLC. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.