The decision to bring an external managing director into your own company demands a change in the owner's leadership behaviour. In one of our client companies this decision was taken some time ago, with the best of intentions and a catastrophic ending.
The owner of a mid sized company appointed a managing director for a new subsidiary for the first time and gave up the position on the governing body that he would otherwise have taken himself. He had decided this for a variety of reasons and maintained that competence and responsibility belong inseparably together. The new man could and should lead his area of responsibility independently.
That sounded interesting to the newcomer. He had gained experience in the second row at a larger competitor and now wanted to carry overall responsibility.
Development is a leadership task, at the very top as well
After a few months the new managing director was confronted with a rather trivial problem. A customer had particular ideas about pricing, and he mentioned it almost in passing to the owner at a meeting. In return he immediately received a lecture on how such little problems are solved here. And the boss demonstrated it to the managing director straight away: call the customer, negotiate, done.
The classic: Mister Fix It. And over the following months this development continued steadily. The managing director reported how he intended to do something, and Mister Fix It struck again. With the very best intentions of course, since after all he was solving the task in the interests of the company.
The owner undermined his managing director by every trick in the book. Among the management and the advisory board he liked to say, regularly, that he had again had to show the managing director how it is done, that he obviously did not know, that he was not an entrepreneur after all and still had a lot to learn.
Unreflected behaviour takes its toll: preparation and clarity
The owner opened the first shareholders' meeting with the words that he had no idea why the company had a managing director at all when he had to do everything himself. Even the customers were now calling him about price arrangements. The finance director present was then given the task of explaining the result in the managing director's area of responsibility, a poor one of course. And once again Mister Fix It did not explain what he expected as owner, but what should be done and how.
The newcomer now did what he had learned in his previous jobs: take a position in the second row, accept orders and tell nobody about his own ideas. Well paid, he buried his head in the sand and did the bare minimum. He had long since buried his hopes for the new job. The owner, meanwhile, complained to the advisory board: strange, the new man started so well and now this.
In our consulting projects we see again and again how little prepared owners and managing shareholders are when they want to change leadership constellations. In organisational, growth and restructuring projects in particular, THE MAK'ED TEAM takes account of every aspect required for successful change. Our position from outside of course makes it easier for us to address such sensitive topics in advance. Early, appreciative conversations about the owner's role, which changes as a result of their own decisions, help to find the right solution and to spare people disappointment.
In our portfolio you can find more on organisational development and people management.
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