“Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.”
That quote came from a book I read recently, “The Innovator’s Dilemma,” by Clayton Christensen.
Christensen continues, “Simply put when the best firms succeeded, they did so because they listened to their customers and invested heavily in the technology, products and manufacturing capabilities that satisfied their customers’ next generation needs.” How does your credit union strategic plan compare with this?
An immense amount of research went into Christensen’s work, and it can be summed up by knowing that companies succeed or fail based on whether a manager or a leader was in the head role. There were other factors, but this seemed to be the biggest decider of companies that failed or succeeded. After finishing the book, I started doing my own research and found that 88% of Fortune 500 companies that existed in 1955 are now extinct. Gone. Poof.
About half of those that withered away had the wrong person in the CEO role. Some had a manager-minded person as CEO when the company needed a strong leader. Others were destroyed by a leader when a manager-style CEO could have held the company together during that time and grown it incrementally.
What I learned from all of this: The most important role of a credit union board of directors is to know when their credit union needs a leader and when it needs a manager. So, what’s the difference?
Managers prefer incremental change and evolution.
Leaders prefer exponential change and revolution.
Managers guard the status quo: This is the way we’ve always done it, and it’s working.
Leaders invent new ways of thinking: This is not the way our future customer wants us to do it, so we must pivot.
Managers prefer a map and a path, comfort.
Leaders prefer unexplored territory, the unknown.
Managers focus on planning and execution.
Leaders focus on improvisation and innovation.
Managers make organizational charts.
Leaders make messes (and then clean them up).
Managers are given authority over others.
Leaders are voluntarily followed by others.
Think about these brands that did well at guarding the status quo: Kodak, Blockbuster, Myspace, General Motors and General Electric. They were once overwhelmingly the leaders in their markets, but their Manager-CEOs took the comfortable path in their strategic planning.
One might argue that the internet killed K-Mart, Montgomery Wards, Sears, J.C. Penney or Bed Bath & Beyond! Then how is it that Walmart is still around and earning more than Amazon in 2021 ($488billion versus Amazon’s $398billion)? You can look at its August 2016 decision to install a leader, not a manager, for its e-commerce division to find a path to success.
A good manager knows what to ‘protect at all costs.’ They know what not to change.
A bad manager looks only to compliance and conformity, leaving them blind to the unique capabilities hidden within their employees. A good manager sees those special abilities and calls them to the surface so they can shine.
A good leader knows what needs to be blown up, and how and when to do it. They know what change is needed and are comfortable being uncomfortable. A good leader knows how to manage risk to build a solid foundation for future success.
“If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies, problems—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem.” ― Clayton M. Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail
What kind of CEO does your credit union need right now? A good manager or a good leader? Do you need help gaining perspective?