Lessons from the Oxford and Cambridge University boat race
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Each year two teams of eight extremely fit athletes compete in the Oxford and Cambridge University Boat Race on the River Thames in London. Whereas in Olympic rowing eight races take place over 2000 metres on a straight course with no flowing water or tides, the Oxford and Cambridge race takes place over 4.5 miles on a twisting tidal and sometimes fast flowing river.
Speculation as to which team will win the race typically rides on an analysis of the abilities of the individual oarsmen. They are compared like heavy-weight fighters – how big they are, how much they weigh, how much strength and endurance they have, how many years of experience.
Often overlooked in the analysis of the individual participants is the fact that both sides are fundamentally equal in ability. Yet, sometimes the race is a rout; and once it was a dead heat. Six times, when the tide and current produced a choppy surface, a boat was swamped and did not finish the race. So any outcome is possible. What distinguishes success in the race, then, is something less tangible than height, weight, and years of experience. It’s determined by three factors:
- The strategy chosen for the race.
- The judgment of the Cox in adjusting to the elements on the course.
- The ability of the oarsmen to row as a team over a winding, arduous course.
Fans know that in spite of all the pre-race analysis, the race is always decided by a combination of these three elements. And a look into the conditions that breed success on the river might give us some insight into what can lead to survival or even success in the most hostile business climate in years.
Richard Harris is a former senior officer of the Forum Corporation, a Boston-based work-place learning company. His leadership positions in the firm included Head of Global Research and membership on Forum’s Management Committee and Board of Directors. Now serving as a consultant to companies including the New York Times, Royal Dutch Shell and United Technologies, he works with organizations to improve their quality of leadership through executive coaching, team development and talent development strategies. He also teaches leadership development at Shell’s internal university.
His commentary here is focused on the third element of success – the ability of a group of extremely competent individuals to pull together as an aligned team. The leadership team is crucially important and is often overlooked as companies simultaneously strive to survive and use a downturn as an opportunity for strategic advantage.
Challenging conditions
We are now confronted with some of the most challenging conditions that today’s generation of business leaders has ever faced, and it is apparent that merely riding out this recession will not be enough. Business leaders will need to rebuild confidence, not just market share; and to make decisions in the best interests of all stakeholders. They will also need to re-earn the moral right to engage in open commerce without being hamstrung by regulation at every turn. They will need to lead their businesses, not merely preside over them.
Some companies have already been overwhelmed by these conditions. Few are doing extremely well. Those who are going to do best over the long run will be the ones that can apply the lessons of the boat race while their competitors become distracted by the volatility and uncertainty that surrounds them.
A truism of many sports is that an average group of athletes playing as a team will consistently turn in an above-average performance. Alas, the opposite is also true. So it is not enough to field the strongest group of individuals possible. They have to be able to row together. If a leadership team can be aligned around a common strategy it helps the company create greater focus. It is a big “if “. Lack of alignment among leadership teams is a major cause of company failure to execute its strategy.
Disagreement at the top translates into warring factions in the middle, and just plain confusion in the ranks of the organization. Talented people at any level have a limited tolerance for this type of work environment. Once that tolerance level is crossed, they tend to leave for more focused – typically more customer-focused – companies. Aligned leadership teams create a distinctive competitive edge because they make communication more effective, create fewer decision bottlenecks, and give individuals further down the ranks clearer accountabilities. Thus, they grow faster and have happier employees. Research conducted by the Gartner Group, for example, has identified that these organizations can perform as much as 20 per cent better simply because of this alignment.
There are five transitions that leadership teams must make if they are to use the recession to gain competitive advantage. Making these transitions is heavily dependant on an effective strategy and strong leadership at the top. But they rely most heavily on senior management’s ability to pull together as a team.
From internally-focused to customer-refocused
It is well established that customer-focused companies are the most successful by almost any measure – profits, customer retention and employee satisfaction, to name three. In his highly regarded book, The Loyalty Effect, Fred Reichheld showed that the single biggest driver of profitability is customer retention. What is not so well understood is how the effects of a volatile, uncertain business climate can drive even the most successful customer-focused companies to revert to inward looking behemoths. Yet that’s what is happening in this recession. Fears of job loss consume even the most committed of customer champions.
“Companies that are successful in a recession tend to contract more quickly than those that aren’t. This means that measures of success in a downturn tend to emphasize cuts, not investments.”
This means that companies in a defensive mode will need to re-learn the importance of customer focus to ward off a downward spiral that leads to inward focus, cost-cutting, lower productivity, and yet more inward focus. If leadership teams are to help their companies accelerate out of the recession, the first thing they will need to do is ensure that they are focused on concern for the customer. This kind of thinking will not just be good for the customer; it will help the entire organization get re-energized around a common purpose.
Modelling concern for the customer must go well beyond slogans. The most effective companies are those that turn their commitment to customer focus into an explicit understanding of what customers value. They then translate that understanding into everything from work processes to reward systems. Perhaps most importantly of all, they run their business using a scorecard that aligns the entire company to those things that customers value most.
From contraction to growth
Companies that are successful in a recession tend to contract more quickly than those that aren’t. This means that measures of success in a downturn tend to emphasize cuts, not investments. However, companies are built on an economic assumption that expansion is better than contraction – that growth is the preferred mode of operation. There’s a reason we call sales people “business developers.” Development (read “growth”) is a good thing.
Leadership teams need to be aware of the contraction assumptions that have crept into their decision making over the course of the recession. In short recessions growth assumptions tend to reassert themselves relatively quickly. But, as this recession drags on – as contraction activity is rewarded and reinforced – leadership teams will find themselves needing to re-establish a growth mentality among large numbers of people in the company who have come to think of growth as an unattainable goal, and perhaps the wrong thing to aspire to.
There are several ways that leadership teams can help their companies focus on growth. Once again it starts with understanding how to improve customer relationships. Recessions don’t just wreak havoc on your company. They wreak havoc on your customers as well. Understanding how customers have been affected in a recession is a critical first step in refocusing on growth. Other approaches such as strategic account management, more rigorous forecasting, and marketing management become tools for the leadership team to monitor its way out of the recession.
From risk aversion to opportunism
One of the lessons that recessions teach all too well is that more things go wrong than go right. A risk that would be taken in normal times is more likely to create problems during a recession. This often leads by default to a “blame” culture and risk taking tends to dry up. Who wants to make mistakes? But since success in business relies on taking risks, risk aversion can become a major source of stagnation as opportunities begin to emerge.
As companies come out of recession, leadership teams that take advantage of opportunities (bolstered by customer focus and a growth mentality) tend to make prudent risks that pay off. Those that continue to approach risk as an unsafe business practice find themselves only making one mistake – missing the opportunities that are out there. The Chinese word for “crisis” is also the word for opportunity, but in Western culture this is not an easy message to deliver. We find that leaders must raise awareness of the benefits of taking prudent risks before much else happens.
From isolation to trust in others
Bad times don’t just cause leadership teams to take their eye off the customer. They also tend to force each person in the team into isolation. Communication lessens; individuals withdraw; suspicion rises. This phenomenon tends to happen throughout the organization, but when it happens to the leadership team, it magnifies the effect on the entire organization.
“When the leadership team becomes the crisis response team, it is no longer leading.”
Research has shown that senior leaders have difficulty developing trust among themselves even in the best of times. They’re too used to having their own way; fighting for their own corner. However, without trust among the leadership team, the strategic alignment that the company needs to lead the way out of a recession is severely hampered by missed opportunity, decision delays, infighting, and downright subversion. This can manifest itself in the so-called “Silo-Effect”; a lack of ability to communicate across functions although delivery of the products and services to customers relies on horizontal process flows. Ways need to be found to break through the silos in order to establish shared accountability that cuts across different functional areas.
From reactive to forward-looking
Leading through a recession is not all drudgery. For many, a recession is a time of intense concentration. It can be a time when the juices are flowing; when things get done at a rate of speed that does not happen in normal times. For adrenaline junkies, a recession can be highly motivating. There is one thing missing from this recession-induced high, however. The high is brought on by reactive behaviour. The leadership team has traded off control of its destiny for short term wins.
When the leadership team becomes the crisis response team, it is no longer leading. Leadership teams must be aware that to come out of a recession with a stronger company, they will need to look beyond the cut and thrust of the short term win and become forward looking. In a recession of this magnitude, being forward looking will probably mean introducing fundamental new strategic direction for the company. This in turn means that they will need to align their company to a new strategy and lead the company in an entirely different direction.
Lessons from the boat race
These five transitions must be carried out by the leadership team if the company is to turn its experience in the recession to its advantage. This will be far from easy. With new and different challenges emerging daily, leadership teams are faced with the need to add more rigour to their analyses and more speed to their execution. Usually these two actions are thought of as a trade-off. In the present environment, the winners are likely to be the ones who pull both off simultaneously. Leadership teams will need to engage in disciplined hard work that will affect how they analyse the business, how they work with the people down their organizations, and how they work together at the top.
Once again the lessons from the boat race are relevant. The leadership team plays a crucial role, but the team can’t do it alone. The strategy needs to be robust enough to create the possibility of winning, and the overall leader of the team must exert a unique blend of forceful direction accompanied by an authentic show of concern for the strain that such difficult conditions is putting on the team. When all three elements are present – right strategy, strong executive leadership, and teamwork among top executives – then the conditions are right for leading an organization through choppy waters wherever they may be encountered.