What Do You Do When There’s Tension at the Top?

King Kong atop Empire State Bldg

King Kong atop Empire State Bldg - Image by auchard via Flickr

There are three well-known West Coast asset management firms (financial services speak for mutual funds, venture capital, private equity, hedge funds, or fund of funds firms) – none of them clients – where the firm’s leadership team members barely tolerate each other.

They talk when they must. Otherwise they minimize their working relationships as much as possible.

The firms make money. It’s a problem  – the money part – many would love to have. Most of us would skip the tension and struggle part.

So what do you do when there is trouble at the top?

While the parallels for companies and families are tired, overused, and not always accurate, one truth is spot-on; when the parents (or top leaders) struggle, you can be sure everyone else notices.

25+ years of experience ranging from 5-person startups to Fortune 15 companies has taught me one lasting lesson; trouble at the top is a cancer for organizations. And it’s deadly for those same companies when they have critical interdependencies (think sales working with distribution) or if they fail to leverage critical resources (technology or talent for example) to keep the organization competitive.

There are things you can do to rectify the problem. The first thing to do though is to figure out if there’s interest and commitment to make any required changes – including the possible change of faces at the table – or if the prospect of change is too great to bear. No commitment = no change.

Why do leaders put up with the tension?

Two words tell you what prevents people from leading by changing;  fear and denial.

Chip Conley at TEDxPresidio noted “Most of us work in fear factories – and it’s contagious.” The fear for is that they’ll screw things up if they make any changes in they way they work together – and if they screw it up the the money they make will tank. Something such as taking a chance to fish or cut bait is too big of a risk. The prospect of change that might not work is more painful than the experience of enduring daily leadership dysfunction.

Denial is the second powerful factor; leaders fail to see that their inability to work well with their peers cripples and obstructs the layers of managers and people below them. “It’s not so bad” is a phrase that if I’ve heard it once, I’ve heard it 1,000 times. People downplay the impact, and up play the risk of making any changes.

What they don’t see are the people below whose daily working lives are influenced by dueling camps above. Initiatives that would require cross-department or cross-functional work are shelved because it would mean sharing resources, time or information with “the other guys.”

If there are no interdependencies (think for example of private equity partnerships where partners manage their portfolio companies in a self-contained siloed way) than the problem is more tolerable. Though I can’t think of anyone I respect who looks forward to playing publicly nice to people they loath, there are people who find it workable.

Not my choice, but for those firms it may be a realistic option- do nothing. For cultures that value consensus over conflict, it’s a “safe” way to operate. Keep doing the same as always; like married couples who long ago stopped relating with each other, leaders go through the routine of working together without any real connection or engagement.

One of these firms is thinking about doing some work on leadership. Unfortunately the elephant in the room is a newer partner – dubbed the “Seagull” because he swoops down and poops on everyone –  who was brought on a few years ago. He has made the firm money with his deal making, and chased away two other partners who tired of his prima donna act. It’s unlikely (consensus over conflict) that anyone will call out the real issue.

There are firms though – usually out of courage, conviction or despair – who tackle the issue head on.  It’s the Maya Angelou sentiment, “The need for change bulldozed down the center of my mind,” that enables some firms to move forward and tackle the tension and trouble at the top.

The result when you tackle the issue effectively? Better functioning, and better profitability. And if it’s the issue is not tackled well? Nothing much – the scab has been picked at but it will regrow nicely.

It helps to have outside expertise- experienced folks who have both proven methodology, a history of success in tackling touch leadership dynamics and enough pride in their work to be ready to be canned for their candor. I would avoid what one of the firms I mentioned above has done; bring in someone to help bandage the pain – to the likely to the tune of several $100,000’s for the last few years- rather than tackle the root cause and find a cure.

Struggle can often be for petty reasons but more often than not it revolves around a difference in direction, milestones and metrics, roles and responsibilities, and the way the group will work together.

Those four elements are the same for a program I run called Road Trip, a teaming session developed to help leadership and startup teams chart the where, how, who, and when they’ll go. When you want to deal with tension at the top a conversation like Road Trip surfaces the disagreements, and calls the question about what you want to do – and how you’re going to decide – to work together.

When there’s tension at the top there’s trouble in the organization. The trick as it where is to calculate the value of change, and to either grin and bear it, or get the courage to make the required changes. Jim Kouzes once noted that while former GE CEO Jack Welch was an effective CEO, he could have been much better if he had made some additional changes to the way he managed and dealt with people.

The same is true of those three asset management firms. The can be much, much better.

 

Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.