4) Communication - Germany, 1990: cynosure arrogance 

Compelling event

     As the new CEO of BFS GmbH in Munich I started off, not with a bang, but with a blunder. My performance on some independent projects for the firm over a period of six months had led to my being offered the position of CEO. The day after my official appointment I flew to Berlin to sign a lease for an office building. The branch manager there, a recent hire whom I had never met, was a former Major in the East German military. He had prepared a short list of three locations and had conducted preliminary negotiations. I would make the final choice, push a little on terms and conditions, which were already fine, sign the lease and fly back the next day.

    The surprisingly young branch manager was very friendly and easy going, no military baggage, not officious at all, as I had feared might be the case. The evening of my arrival he invited me to his home for dinner, where I met his charming wife. (Making the right moves with the new CEO, I thought.)

    The next morning at the office, he asks me what exactly do I do for the company anyway. I assume he is joking and tell him "Chief Bottle Washer" (or would have, had we been speaking English. What I actually said was "Mädchen für alles.") Well in that case, he says, addressing me by my first name, could he give me some photocopying to do? He was busy and his secretary had more important things to do.

    I am totally impressed. This fellow really had been a Major! Sure, of course I can do that, and promptly get to work. Later that morning we began the inspection tour of the office buildings. I agreed with him that the third possibility was the best choice. When we met the landlord I was introduced as the "the Munich office representative" who would just sit in on the meeting and listen. (A negotiating tactic, I thought.) A couple of minor concessions are requested. The landlord agrees and says let us sign the lease, get it done.

    The branch manager apologizes. He does not have that kind of authority. He will have to fax headquarters for the principles of the company to sign. I looked at the landlord, smiled and said we had not yet exchanged business cards. As we did that, I reached for the lease contract and signed it.

    The branch manager is startled. He asks to see my card, on which my nice title of CEO (Geschäftsführer) appears. He goes white and starts spluttering apologies for having asked me to do photocopying. He is still apologizing in the car when we leave, completely distracted and not paying attention to his driving. He has an accident at an exit ramp. The brand new company Mercedes is totaled.

    A month later he comes to Munich for meetings. He realizes that the full story of the accident had not made the rounds. He asked me why I had not told anyone the details of what had happened. I said I had not felt that to be productive. Unfortunately, he had become so nervous about making another mistake that he was paralyzed. The company was growing 40% per annum and he was not keeping pace with it. Six months later he was gone. I got feedback that he and his charming wife felt he had been the victim of some strange Machiavellian scheme from my very first day as CEO to remove him. Probably I wanted my own man in Berlin instead.

The error

    Because becoming CEO was such a huge event in my life, I assumed everyone in the company would know about it that very same day. It never occurred to me that a full 48 hours later a branch manager would not have known about it. Granted, the official announcement by mail would not have arrived. However surely the internal grapevine had been buzzing. And of course he had telephoned Munich to ask someone there who this American fellow was, the "expert from afar", who was suddenly showing up in his Berlin territory.

    He had done a great job securing office space. Some friendly treatment and praise would have kept him motivated. He was eager to perform. But after the lease negotiation, he viewed me as if I were Stalin himself, the embodiment of devious "Management by Terror," an attitude exacerbated by the expensive car accident. Afraid of making another mistake, he did only what he was specifically instructed to do, in exactly that way. I was never able to overcome his perception of me, to get him to show his previous initiative. He failed because of my failure.

Lesson learned

     Arrogant, demanding and boastful are less attractive than self-effacing, humble and modest. That notwithstanding, the people with whom you are working, from the secretary on up, do need to understand "where you are coming from.” As a practical aside, I mention that although I would still refer to myself in German as "Mädchen für alles," I always added "auf Geschäftsleitungsebene" (i.e. chief bottle washer -- for the board of directors).

Relevance

    The point about having his authority respected appears obvious to any CEO. It becomes less obvious when couched in terms of understanding -- and subscribing to -- what the CEO views as the vision -- and associated mission -- of the company. Is the vision as clear to your direct reports, as important to them, as to you? Are their actions really governed by it?

    Furthermore even a completely confident "yes" about your direct reports may be misleading. What really counts is for the countless invisible employees to subscribe to it. That is not something one accomplishes with vision and mission statements in the annual report, a couple of speeches and a few supporting memos.