1) What is executive strategy coaching, and how is it different from management consulting for strategy?

01/01/2010 00:00

Let us begin with management consultants.  They are unquestionably an asset to a corporation, above all when they are doing what they do best, solving specific one-off problems, helping seize immediate opportunities.  Then they are a real strength.  However strength, when it becomes excessive, can turn into a weakness.

Scott Paper is a case in point.  Two brothers founded the company in Philadelphia in 1879.  In 1994 it was the 8th largest paper company in the U.S. and No. 1 in the world in tissue paper, with a 15 percent market share.  Over time, Scott Paper had developed a culture in which consulting was leaned upon heavily.  The company was spending $30 million a year on a multitude of consultants.

Consultants were being used as a source of credibility at all levels of the corporation. The CEO was using them to support actions to the board.  At lower levels, highly competent managers were using them to "sell" their own ideas to senior management, which would not otherwise accept them.  As this process became inherent to a culture otherwise resistant to change, the usage of consultants ballooned.  The consulting engagements, individually often (but not always) well run, where not aligned with one another, or with a coherent strategy.  Frequently one engagement was in conflict with another.  Day to day management suffered. 

In fact, it suffered so badly that in 1994 the company was considering filing for bankruptcy. As a last ditch alternative, it brought in a turnaround CEO, Albert J. Dunlap.  He fired 70 percent of upper management, and cut back the work force by 17,000.  (About 11,000 people were "terminated" and another 6,000 people worked at companies and divisions that were sold.)  

From the perspective of the 20,000 people who kept their jobs, the turnaround was successful.  From the perspective of Wall St., it was brilliant. The stock market loved it.  The shares went from a rapidly sliding $38 to $89 and rising in the year of the bloodletting. In 1995 Scott Paper was acquired by its archrival Kimberly Clark and ceased to exist as an independent company.   

Albert J. Dunlap completed the turnaround in twenty months, receiving total compensation of $100 million ($80 million as a result of stock options).  He has been referred to as "America's premier turnaround artist" and "Rambo in Pinstripes", as well as, less flatteringly "Chainsaw Al".  He is the ultimate "no-nonsense" business executive.  With Bob Andelman he wrote Mean Business, How I Save Bad Companies and Make Good Companies Great, Fireside, 1996, where he states, p. 154:

A real chief executive says, "Here's what we're going to do, here's how we're going do it, here's when we're gonna do it.  And I'm accountable."   

No "touchy-feely" consensus, bottom-up management here, no, no.  Interesting is that as tough as he is, Albert J. Dunlap did have one long-term (15 years) advisory relationship with C. Don Burnett, a partner at the accounting firm of Coopers & Lybrand.  Albert Dunlap referred to him as someone he respected for being efficient and cost-sensitive, and as one of the few outsiders who could influence him: "He gives me extra eyes, extra ears."   That is one role of the executive coach, but not the only one.  What, then, are his different roles?


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