Entrepreneurial Leadership: The Courage to Act

A number of years ago I was on a consulting engagement at a large and well-known financial services company. They were experiencing some painful symptoms of a problem that was baffling to the Executive Vice President (EVP) we were working with. She ran an organization consisting of both client-facing and back-office personnel.

Over time, the level of customer service had degraded and problems were taking progressively longer to resolve. Customer attrition and complaints had increased and the EVP wanted to know why. As we talked to people in the organization we learned of serious animosity between the client-facing and back-office teams.

The client-facing and back-office teams were led by two Senior Vice Presidents (SVPs), with whom the EVP was close. All three had risen up through the organization together and had at one time been friends, but now the SVPs were barely on speaking terms due a personal falling out.  During our research we learned that the animosity between the SVPs had permeated their respective organizations, leading to dysfunctional behaviors that resulted in poor customer service and slow responses to problems.

Our advice to the EVP was to break down the two silos, remove both SVPs and restructure the organization to create integrated teams of client-facing and back-office personnnel. Her response was that the SVPs were professionals and just because they no longer socialized did not mean they were unable to manage their groups effectively. She insisted that removing her friends was not the answer and instead chose provide her organization with soft skills training. Within six months, the EVP and SVPs were gone.

Choosing not to act and hoping a problem will go away is more common amongst business leaders than one may expect.  Although denial is easier than making a decision that could be perceived as politically incorrect or disruptive to the organization, the consequences of not acting almost always are worse. The is especially true in entrepreneurial organizations that are on a fast growth curve.

New companies often have only one chance to build their reputation and brand. When one failure can mean the end, having the courage to take an uncomfortable action is one of the most important traits of a successful entrepreneurial leader.