teslatization

Over-Managed & Under-Led

The “Teslatization” of the Boardroom

Jaco Erasmus likes to call it the “boredroom” — the reason why so many C-suite execs are exiting the building, according to him, is because the boardroom is becoming an echo chamber of high-level executives who speak to each other and increasingly operate in a silo while the company chugs along at an alarmingly efficient pace.

In his vision, oversight committees, automation of processes and an extreme focus on efficiency all collude to create an “overly-regulated environment” that sets C-suite executives on a soul-searching journey, asking, “Is this all there is?”

The “Teslatization of the Boardroom,” says Erasmus, “has lamed their creativity and power”.

And, according to him, it’s only going to get more disruptive from here on in.

Teslatization is Not What You Think

The phenomenon that Erasmus is seeing everywhere — the mass exodus of the boardroom — has nothing to do with Tesla’s business operations and everything to do with its organizational structure, which is deliberately set up for efficiency, oversight and rigid control.  

A visible trend of unplanned executive departures in the 2010s seems to have no apparent significant reasons except for what Erasmus calls the “abyss of boredom”. Essentially, the animals are leaving the ark, single-file, stage left and Erasmus thinks he knows why:

“The more in control our organizations are becoming, the more out of control some executives feel.”

He calls it “Teslatization” and it’s a colorful metaphor to describe a dystopian reality: when everything runs like a well-oiled machine, with minimal disruption and maximum productivity, C-suites feel like they’re no longer in control, steering the ship at the helm.

And, apparently, control is why they got on-board in the first place.

“What really matters is the machine that builds the machine,” says Elon Musk. “The factory.” So if executives are “feeling sidelined by the hands-off approach,” as Erasmus describes, the poster-boy for Tesla would say it’s a necessary evil in this new age of managerial strategy.

Let’s put aside, for a moment, the idea Musk offers here — namely, that innovation and exceptionality is a function of controlled environments and efficiency — and ask why it is that “automated and process driven with well imbedded compliance, oversight committees and heavy lifting supervisory board members” would make the classical C-suite “obsolete”?

Was the function of a C-suite executive ever about heightening efficiency and compliance and spearheading day-to-day operations?

Are executives in this for a sense of “control” and power? Does this climate lead to being over-managed and under-led?

And, on the flip side, could this shift in executive managerial environment actually spell a watershed moment in which we get to re-define and re-focus the definition of executive leadership?

 

“Say It Ain’t So, Joe”

From the B.C.C.I. fraud in 1991, to Enron in 2001 and Madoff’s Ponzi scheme in 2008, we’ve had nearly three decades of scandals erupting from executives at the head of major companies.

Generational communications researcher Dr. Mary Donohue cites this as a major reason for a breakdown, not only in communication between leaders and teams of employees but a total distrust for authority that many millennials inherently approach any form of leadership with today.

The new norm, even in innovation teams, is apparent transparency and oversight committees (Gardner, 2009). Though this may feel like “over regulation” to a classical C-suite executive who operated in the flush of the 80s and 90s, it’s actually the key to procuring a return on investment and reinstating a sense of due process and trust in the way companies operate – internally as well as externally.

But regulation leading to efficiency and the use of supervisory committees and sub-committees is not a new form of corporate governance, so why would this lead to a loss of creativity and control?

And, even if we were to accept that the abdication of C-suite execs is linked directly to “boredom” experienced from the lack of opportunities to “steer” the company, why would greater compliance be the root cause?

When did we accept that C-suite execs are just firefighters? What’s really going on here? Let’s survey the Deus ex Machina.

 

The State of the Union

A survey conducted by the job consulting firm, Challenger, Gray & Christmas says CEO turnover is down from 2014 and the most oft-cited reason reason for departure is resignation. The resulting report released in July 2015 also observes that those leaving have been with their respective companies for 2 years more, an average of 10.2 years, up from the tenure term of 8.2 years in 2014.teslatization

Copyright 2015 Challenger, Gray & Christmas

teslatization

Another major reason why C-suite execs are stepping down from companies that they’ve built is partially organic and partially existential.

Dave Hersh is an excellent example of this. After stepping down as founding CEO of Jive, his own software company he nurtured from its first wobbly steps to its eventual triumphant sale, Hersh says it took him a long time to “reconcile” the act.

When asked why he stepped down as CEO, Hersh responded in an interview with Inc. Magazine’s Bo Burlingham, “[M]ainly, I did it to repair my marriage…in order to get to that level of success, I put a lot of pressure on myself and was on the road a lot. I was so preoccupied with the company that my marriage started to suffer. We had been married eight years and had two kids under 6, and our communication completely broke down.

For Hersh, work-life balance was a Sisyphean task that could never be reached without at least some disruption or intervention from him.

Maybe not a “weighty” reason, according to Erasmus, but maintaining and negotiating the ideal work-life balance is a reality an increasing number of senior executives are facing.

His next move, however, was his 2017 purchase of the Portland-based e-commerce firm Monsoon, with a brilliant crew just yearning for a life-preserver and some direction from a well-seasoned captain. Enter Hersh.

This shift would seem to say that Jive had naturally reached its envelope, just as Hersh had naturally reached his own capacity to be effective, given the context. His decision to leave had almost nothing to do with feeling stifled by efficiency and, in hindsight, it was actually quite an organic move.

Of course, his investment in and leadership of Monsoon today also speaks to the way in which, eventually, the heart of every entrepreneur and C-suite leader thirsts for a new challenge, a new pasture where they can test their strategies and expertise and a new crop of followers to enthral with their leadership.

Now more than ever, companies like Apple, Microsoft and Google are relying on the emotional intelligence coupled with strategic expertise of the Ahrendts, Nadellas and Pichais of the world to bring in fresh blood and turn internal re-structure into external profits.

And that’s where the key is: leadership.

Controlling Processes, Not People

Maybe it got lost in the shuffle somewhere.

Maybe it’s an unfortunate residue of a start-up culture that calls on even the founding CEO to wear multiple hats at any given moment: switching, on a dime, from HR professional to manager, to product architect and back.

And, as a company grows rapidly, there is sometimes hardly a spare moment to breathe and review.

Perhaps the “Teslatization” of the boardroom is not so much a push-back against compliance and corporate governance structures but, rather, a result of:

  1. An excessive focus on analytics, results that come from data metrics and allowing these to be the key drivers of change
  2. A culture where C-suite leadership has, in the short-term, been mistaken as controlling people, rather than processes.

Scott Watson, an Emotional Intelligence and Executive Coach says he sees this trend amongst many a boardroom executive. “Even the most senior leaders privately [held] concerns about their survival. And this can be a contributing factor to their excessive focus on results, results, results.”

He goes on to note that, “I often see organisations that are over-managed, but under-led. By that I mean that lots of effort is invested in analysing statistics and productivity, and this is absolutely essential, but little time is devoted to enhancing communication, improving collaboration and nurturing high-trust relationships.”

So perhaps it is that the Teslatization of the Boardroom is indeed an exit but one in response to a push for hard-edged KPIs and holding the line on important metrics, rather than human relationships.

But wait — why are CEOs focusing on maintaining and achieving this?

It’s the job of management and managers to control processes, while it’s the job of leaders to guide people.

A common question among managers is, “How can we hold employees accountable?” but the truth is that employees are humans, not functions. They cannot be “held” or “controlled”. Instead, they must be nurtured and worked with.

When people are controlled, it leads, ironically, to less efficiency and lip service paid to mutual trust. When processes are controlled, however, it  can lead to a bankable profit. And the main purveyors of a control in process should be managers, not leaders.

In fact, John Kotter, professor of organizational behavior at Harvard Business School writes,

Management is a set of well-known processes, like planning, budgeting, structuring jobs, staffing jobs, measuring performance and problem-solving…but it’s not leadership. Leadership is entirely different. It is associated with taking an organization into the future, finding opportunities that are coming at it faster and faster and successfully exploiting those opportunities. Leadership is about vision, about people buying in, about empowerment and, most of all, about producing useful change. Leadership is not about attributes, it’s about behavior.

If boardroom executives are indeed leaving because they’re feeling robbed of control, then this is an opportunity to redefine the role of C-suite leadership.

It’s a moment in which senior executive can finally take off the hat of mere firefighters and, instead, turn to their jobs as leaders.

When Erasmus remarks that boardroom executives who are used to being “in control” will have to bow to non-traditionalists (read: millennial or Gen Y leaders), it doesn’t have to be about teaching an old dog new tricks, feeling uncomfortable about a “new” era of leadership and not knowing how to adapt to it.

Actually, it can mean a return to what leadership was always all about — but maybe we simply lost the thread of it for a moment.


sarah-merekarSarah Merekar is primarily a storyteller who loves to work with and in several different mediums, on various platforms and see how these co-exist and complement each other. She loves hacking product sales and understanding how content creation has an effect on this process. The content she creates for clients is high quality, highly tailored, and on brand, specifically in the form of digital & brand copywriting, design and video.


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