Peter Drucker's Way to the Top
Page 16
Ueberroth was a self-made businessman who made money and was successful in the travel business. He may not have been the first choice to run the Games. However, a headhunting firm suggested Ueberroth’s name to a Los Angeles committee searching for someone to run the 1984 Olympic Games. No one thought it was a dream job and few predicted much success or glory for the person that got the job, so there wasn’t a lot of competition and Ueberroth was offered the job, which he accepted, and he even took a 70% pay cut. Even the compensation wasn’t that great. Later, he changed his status to volunteer worker. He refused to take any money at all for his work at the Olympics.
Some said Ueberroth declined to take a salary because there was no way the Games could turn a profit. Many experts said that it was unlikely that the Los Angeles Games could even break even. The media agreed. The Soviet Union and its satellites were likely to boycott the Games in retaliation for the Americans boycotting the previous Soviet Games in 1980. Other countries in the Soviet sphere of influence would probably follow. Other cities had had financial problems in hosting the Olympics even without the Soviet problem. How could Los Angles do any better? The conventional wisdom was that the US Olympic Games in Los Angeles were going to lose big.
His first week on the job, Ueberroth couldn’t even get into his own assigned office. He and members of his staff could hear the phones ringing inside the office while they were locked outside. But, the landlord, like many others in Los Angeles, was so certain that the Olympics would lose money and not pay its bills, that he wanted his money first before handing Ueberroth the keys.
Harry Usher, who functioned as Ueberroth’s Chief of Staff later said, “Leadership and inspiration are his managerial gifts.”6 Ueberroth plunged right in. He managed by getting out in front and going where the action was. Taking over an old helicopter hangar as his headquarters, he encouraged everyone to eat lunch in the hangar’s cafeteria to save time. Ueberroth ate lunch there with everyone else.
Frequently, he would stroll through the hangar talking to his employees and asking questions. “Peter is demanding and self- demanding. That makes you try as hard as you can,”7 noted Agnes Mura, one member of staff.
Ueberroth personally negotiated contracts totalling millions of dollars. As the cash flow slowly changed to going in the right direction, he went out of his way to cultivate the ministers of sport from each country. Once the Soviets announced they wouldn’t be coming, Ueber-roth spent even more time up front with his employees to make things happen. He kept the pressure on and did everything he could to stop other countries from joining the Soviet boycott. He flew to Cuba and met face to face with Fidel Castro to persuade Cuba to come. While Castro said he had to follow the Soviet lead, he did agree not to pressure other Latin American countries not to come.
Once the Soviets made their boycott official, the experts again announced that there was no way Los Angeles could do anything to avoid losing money. Big money. Ueberroth ignored the naysayers and stayed out in front. He claimed that even without the Soviets, they would make $15 million profit. The naysayers laughed. Make $15 million profit? Impossible!
As the Games opened, Ueberroth continued to go where the action was. According to Time Magazine, he was constantly on the move, racing to the scene of action and even riding a helicopter over Los Angeles freeways to check the traffic. Every day, he wore the uniform of a different Olympic worker as he made his rounds. One day it was a bus driver’s uniform, the next an usher’s, the day after, perhaps a cook’s. And every time he spotted a security worker, he ran over to shake his or her hand. Ueberroth had been warned that Los Angeles was particularly vulnerable to terrorists, and Ueberroth was determined that they would not strike successfully at ‘his’ Olympics.
Both Ueberroth and the experts were proven wrong. The Los Angeles Olympics didn’t make $15 million. Under Ueberroth, the Los Angeles Olympics made $215 million profit, $200 million more than Ueber-roth himself had predicted.
And so, Ueberroth got to dine with President Reagan and his photograph graced the cover of Time Magazine. Many Americans thought he should run for president himself. But others said he was just very lucky. Ueberroth didn’t say very much. He accepted an appointment as Baseball Commissioner. Ueberroth continued to be lucky and has been involved as a successful director or investor in many corporations, because he knows his real luck is that he always gets out in front.
HE GOT OUT IN FRONT AND WENT THROUGH GARBAGE
When Phillip Rooney was CEO of WMX Technologies, Inc. of Chicago, he found another way of setting the example. WMX Technologies manages waste, and every Founder’s Day at the corporation, Rooney and other managers set the example by going through garbage. He and they took off their suits and ties and donned the appropriate clothing to sort through the garbage with everyone else. Rooney knew what he was doing. WMX founder, Dean Buntrock, hired him.
He was sent to Riyadh, Saudi Arabia to pull together a $250 million garbage-hauling contract. He set the example and got out in front then, too. To do this, he had to set up a functioning town for his workers. He employed the town’s entire population of 2,000 workers. Then he helped install the electricity and sewage systems himself. Not too many top executives do that.
Some years later, he was sent to Chicago to take over the main operation in the US. He was out in the field five days a week working with front-line managers and salespeople. He pushed sales managers to get out and talk to clients more. Or rather, he pulled rather than pushed, because he dropped in on customers himself as well.
Because Rooney set the example, others followed. WMX’s head of sales and marketing said this about Rooney at the time: “He moves as easily among low-level [employees] as among CEOs.”8 And Rooney knew what he was doing. He acknowledged getting out in front as one of the keys to his success in both his professional career and other aspects of his life.
WHAT CAN AN ASTRONAUT DO AT A TROUBLED AIRLINE? GET OUT IN FRONT
On retiring from NASA and the Air Force, Eastern Air Lines recruited Astronaut Frank Borman as a vice president. Five years later Borman took the reins as president and CEO of a very troubled airline.
Eastern had once been one of the big four of US airlines. It was once headed by the ‘Ace of Aces’ from World War I, Eddie Ricken-backer. But now Eastern Airlines was in billions of dollars’ worth of debt. Their planes were fuel inefficient, and mostly obsolete. Their best plane, the L-1011 was too big for most of their routes – and they had too many of them. Corporate headquarters were split between two separate locations: New York and Miami. This led to continual and unproductive in-fighting and friction between senior executives at the two locations.9
The company was top-heavy with useless managers. Management was so stratified that dozens of executives clogged the lines of communication between top executives and the people on the firing line. In one department, they had 60 people assigned to a job where a larger competitor had only 20.
A typical situation was when computer experts were hired to establish information control systems. However, after the systems were set up and running, the experts were never given any new work. They sat around doing virtually nothing. Bonuses were given to company officers based largely on subjective appraisals by fellow officers. Losing money, they furloughed or fired hundreds of employees. However, at the same time Eastern supported fancy cars and private jets for executives. Earlier, customer service had been so bad that a group of former customers had formed the WHEAL (We Hate Eastern Air Lines) Club. Things still hadn’t quite turned around.10
When Borman became CEO, he got out in front and took charge. Here’s what Borman did right away:
• He fired or forced into early retirement or demanded the resignation of 24 vice presidents.
• He sold the JetStar executive aircraft and informed executives that in the future they’d travel on regular Eastern Airline flights.
• He reduced the executive limousine fleet and its drivers to a single car and driver in each of three major c
ities.
• He cancelled the leased company cars for executives and eliminated the company’s paying officers’ membership dues in private clubs.
• He transferred all major executive functions to Miami, making this the single headquarters location.
• He sent a large number of people who had contact with the customer to a special school he set up based on the customer service training syllabus from a company that had a first-class reputation of dealing with customers: Disney World.
• He abolished the subjective executive bonus and established a new profit and deficit sharing plan that applied to everyone, rank and file as well as senior executives. It was tied in directly to how the company did and what the individual accomplished.
• He visited Eastern Air Line employees in almost every city in their system. In his own words, “I cajoled, pleaded, argued, and demanded. I courted not merely the rank and file but their union leaders on both the local and national levels.”11
These measures proved effective. For the next four years, Eastern Air Lines had the most profitable period in its history. It made $45.2 million in the first year, $27.8 million the next, $67.2 million, in the third year, and $57.6 million in the fourth year.12 Customer service went from dead last in the Civil Aeronautics Board’s passenger complaint ratings to number two in the industry.13 As Borman said, “You could actually see and even feel the new pride developing, growing, and taking hold in the way our people looked and worked.”14
The need to get out in front is strongest when things go wrong, especially in an emergency. Borman showed immense strength in this respect when he was vice president of operations and Eastern Flight crashed into the Everglades at night. Borman heard the news and headed for the Systems Control Center. No one knew exactly where the plane had gone down and so Borman ordered the Systems Control director to charter a helicopter.
They located the crash site when they spotted a couple of Coast Guard helicopters in the area. Though it was pitch-black, they located a spot hard enough to land the helicopter in the swampy waters. It was 150 yards from the downed airplane. When Borman ran up, the scene was one of confusion and horror. Borman helped get the injured and the survivors into helicopters. “When I was satisfied that there were enough rescue personnel on the scene, I finally left on one of the last choppers,” he said. With two of the surviving flight attendants, he flew straight to the hospital with a woman who had lost her baby.15 It was no surprise that Borman obeyed the universal laws, taking charge and immediately getting out in front when he became president and CEO.
Later a new union president succeeded in destroying the incentive compensation system Borman set up. Then the company was sold. Borman was fired, and many of Borman’s changes were dropped. Within months, Eastern Airlines ran out of money and was out of business.
What we’re talking about here is not being a good guy and clapping people on the back. What we are talking about is being unafraid to be with your people, looking them in the eye, helping them when you can and listening to what they say. It is not important that they like you and think of you as a ‘good guy’. It is important that they respect you and think of you as a human being willing to share their victories and defeats.
So, if you really want to reach the top like Drucker, get out in front and go where the action is whether you are a corporate leader or not.
My former boss and good friend General Ron Fogleman used to say that it’s easy to be a leader, no matter your job or actual assignment. All you need to do is stick your arm up to volunteer and lead. “It’s easy to tell the leader, he’s the one that gets the job done,” he told me.
1. “The Leader of the Future”. Executive Book Summaries (Concordville, PA: Soundview Executive Book Summaries, n.d.) 2, original emphasis. https://bit.ly/2OLe2UJ.
2. Drucker, Peter F. The End of Economic Man (New York: John Day, 1939); Concept of the Corporation (New York: John Day, 1946).
3. Mack, Toni. “Indiana Jones, Meet Mark Chandler”. Forbes, 23 May 1994, 100-104.
4. Bongiorno, Lor. “
5. “Peter Ueberroth, Man of the Year”. Time Magazine, 7 January 1985. https://ti.me/2vIecU5.
6. Ajemian, Robert. “Peter Ueberroth: Master of the Games”. Time Magazine, 7 January 1985. In: Time 1995 Almanac CR-ROM (Cambridge: Compact Publishing Co., 1995).
7. Ibid.
8. Melcher, Richard A. “How Phillip Rooney Reached the Top of the Heap”. Business Week, 17 June 1996, 80.
9. “Eastern Air Lines”. Wikipedia, https://bit.ly/1INVp82, accessed 20 July 2018.
10. Borman, Frank with Robert J. Serling. Countdown: An Autobiography (New York: William Morrow, 1988), 329-330, 326.
11. Ibid., 323, 328, 335.
12. Ibid., 341.
13. Ibid., 334.
14. Ibid.
15. Ibid., 285-286.
CHAPTER 13
GAINING SELF-CONFIDENCE AND OVERCOMING FEAR
A person can perform only from strength. One cannot build performance on weakness, let alone on something one cannot do at all.
– Peter F. Drucker
If you’re going to make steady progress to the top, self-confidence and the ability to overcome fear is essential. Drucker recognized this and developed both of these traits. We can see this in his personal life and the decisions he made in his careers, as well as the decision to delay his longer-range goals in recognizing the realities of life in Germany and then changing course in England to find a new home five years later in US. The self-confidence and ability to face the fear of change and to overcome them to take up new challenging tasks of finding a home and a job does not come automatically. No one is born with it.
No one starts out in life accomplishing what we may think of as ‘grandiose’ things. You can see this by looking at toddlers. We start as an infant and accomplish what as adults we consider small potatoes, like learning to walk, talk, read, write, and eventually think and reason. But are these really minor accomplishments? Hardly. Think back. Today you might assume walking to be almost automatic and require little effort. At the time you first learned to walk or to do any of these things you probably didn’t think it was so small. There are adults today who cannot read or write. They may be ashamed and keep their illiteracy a secret even from close friends and family. The truth is, even with these ‘small’ things we started out by doing still smaller things first, like rolling over, and slowly increasing the difficulty of the subtasks until we could accomplish the next step in our physical progress.
With the more complex and challenging tasks and projects of adults, we fail to expect to succeed for only one of two reasons. Either we have been unsuccessful at similar tasks or projects in the past, or we have never tried to accomplish them in the first place. And by the way, those who have never tried usually haven’t because they think they will fail if they did. We may fail in our first attempts. Let me assure you that I have failed by falling many times, both as a toddler and as an adult, but I have developed the self-confidence to go on, and so can you.
A BABY MUST LEARN TO CRAWL BEFORE IT CAN WALK
The correct sequence is that the baby learns to turn over, begins to crawl, gains self-confidence and strength enough to stand up, gains a little more self-confidence and takes a step. Usually the first step ends in a minor disaster and the baby falls. But, the baby knows that at least it made a start, and so it eagerly tries again not long afterwards. Usually the parents are so elated about the attempt that they are full of praise and cheer the attempt. Talk to anyone who has had a stroke and they will tell you the same thing. It may be a little easier, because the stroke victim knows that he could do it once. He knows that it may be tough. He must build his strength and reconnect the neurons connecting brain and body. But he can do it. He has done it before. Trust me, I know. Having had a stroke, I had to do exactly that.
This points out an interesting fact about why people
in general, and sometimes those you might never suspect to, lack self-confidence later in life. Babies usually have someone cheering them on. But even if they didn’t, who’s to say that that first step when they fell was a terrible attempt or a good one? But, as we get older, others may discourage us in learning physical things, many times even without malice. Some of these observers may be judgemental by nature and are almost certain to let us know when we do a poor job, perhaps only a little less so when we make an acceptable attempt, even if they generally support us.
Olympic decathlon champion Bruce Jenner said that as a child he was deathly afraid of being asked to read in class. His teachers criticized him, and the more he was criticized, the lower his self-confidence in reading became. And of course, the worse he did. He was attracted to sports because one day a teacher told him and others to run between two points in the school yard. He was the fastest. For the first time, others were complimenting him. “I didn’t know you could run that fast.” “Boy, are you good at running!” “I bet you could outrun anyone.” Jenner’s self-confidence soared, and as frequently happened, it spilled into other areas. In his opinion, this was his first step towards winning an Olympic gold medal in the 1976 Olympics.