I think my last incursion into the world of European institutions dates back to 1994. At that time, I was still in business school in Strasbourg, so at the heart of it, and I remember vividly being acquainted with the subtleties of the whole thing – the rules, the laws, the process. Twenty years down the line, and I have to be honest with you, I have absolutely no recollection of any of the detail.
As you have probably realised, I spent my entire career in the private sector, most noticeably working for mammoth corporations, mostly American and in finance, far removed from institutional or civil servant mindset. My only perception of or interaction with anything EU related has been complex, difficult and regulatory. What is the point?
Last February, I was invited to talk to the European Economic and Social Committee about leadership issues. In an election year, they felt the need to kick-start a fresh view, a different opinion on European problems. They got a bit more than they bargained for.
I told them: “What if we go down memory lane, to a day in the spring of 1950, in a France in the middle of reconstruction. What if we enter this large room, overlooking the Luxembourg Gardens and saw, working over a big mahogany table, two men in the middle of a passionate discussion about coal, steel, reconstruction, the influence of the US, and two enemies, France and Germany.’’
The audience knew who these two were – French political economist Jean Monnet and politician Robert Schuman. I asked the audience to pretend these two people had been new entrepreneurs, looking at their new business ideas, and on that day they did not plant the seeds of what we know now as the EU, but laid the foundations of EU Inc, a multibillion-euro company.
Sixty-odd years down the line, what would they see? How would they feel? I pushed the fantasy further – if I were the newly-appointed CEO of EU Inc, what would I do?
Well, as any leader in the making, I would have read some of the best leadership literature and in my first 90 days would be taking in the lie of the land and crafting a strategic plan.
What I would do
I would start with the numbers and see a hugely distorted profit and loss account.
I would see a company with incredibly diverse dynamics in business units, some going well, some in dire straits, crafting a pretty worrying global picture.
I would also see the impact of an enormous acquisition journey, with little to no real integration. It would remind me of General Electric’s acquisitions frenzy in the 1990s. It never clearly succeeded in extracting adequate value from any acquisition. It was impaired, even crippled at times, by a rigid corporate culture, leading to the destruction of what made the targets attractive in the first place.
I would conclude the company is in urgent need of transformation or reinvention, a bit like Kodak or Motorola – one fading away, the other capitalising on its innovative capabilities.
Actually, I would push the argument with stronger finance lenses. I would grasp in an instant that I had inherited a company close to bankruptcy. All the signs are there – increasingly heavy cost structures infected with opacity, with limited value creation for shareholders.
Then I would take a hard look at the main asset of the company, its people – 500 million of them.
Looking at the people side, I would get even more worried, because I would see strong signs of a highly demotivated workforce, slowly but surely losing faith in the company. If we take the level of engagement in European elections as a proxy for what most companies would call a people survey, the last polls would be highly alarming.
In 2004, 54% failed to participate in the process, this number increasing to 57% five years later. I would also be concerned with personnel turnover, as about 30% of EU citizens spent between a third and two-thirds of their career outside EU member states, creating value for competitors.
I would see a talent war raising its ugly head, putting in jeopardy the future success of the company.
Finally, I would look for what is truly at the core of the company. What is its purpose? How relevant is it today? What are its unique selling points? How does it create value? What pain points is it trying to solve? Why would I look at the purpose? Because in business, I believe strongly in two things – understanding the past and observing the current environment in order to evolve a corporate DNA. I have also experienced first-hand that evolution is a better strategic play than revolution in gaining support and ultimately creating change.
I would conclude that, quite frankly, the company has lost its purpose. It has evolved from a focused, economically-driven idea, there to attract investors, allow for fast creation of value and capitalise on all the potential of its people.
What is it today? Something that we can hardly define or understand, that appears driven by social imperatives? Possibly, but it is clearly crippled by its long decision-making process and some hypocrisy concerning financial gain.
Those would be my harsh, fact-based observations. As a new CEO of Europe Inc, I would wonder why on earth I took the job – maybe because I am a woman and no man in his right mind would ever take on, let alone fix, this mess. I have walked into a company with complex layers of issues, visions, motivation and results. A company that has lost its purpose but has such a brilliant legacy – it ought to benefit from a turnaround strategy.
And this is what I would craft, a turnaround strategy based on simple principles – go back to basics, embrace change and innovation, remember and rekindle company purpose and legacy, be brave and challenge the model.
How would I put this in motion?
First and foremost I would work on redefining and clarifying the purpose of the company.
Why question would I ask? Why are we needed and why are we relevant? Why should we still exist? Because without answering these questions nothing can get into action. I would plan a vision day way before a strategy day. I would call on the teachings of US internet entrepreneur Jeff Bezos and follow the “pizza rule” – a maximum of six people around a table to dream, think and create.
However, the people I would choose to be around this table are not necessarily the executives of any of the business units. I would look for the young talent, plugged into the reality of now. I would involve mid-level managers, aware of the nuts and bolts of the company. I would also involve external parties, to hold up a mirror and see what needs to be fixed. In doing this I would mix people who represent the current part of the value equation of the company and capture different viewpoints, look for conflicts, challenge group thinking and break established networks of influence. I will run this in parallel in different business units, so everyone would have chance to craft the new vision.
I would do this to create a sense of empowerment and common goal, to establish a new legitimacy. As a leader, I would want to be bold and push boundaries, use youth, use minorities, use every brain, new brains, different brains, to shape something new and old, and more importantly generate a deep buy-in. I would also be pretty ruthless against complacency and scepticism. Anyone who would say “I cannot” or “I do not want to” would be put on the spot, because the life of the company depends on it.
Secondly, I would embark on a much needed public relations campaign both internally and externally.
Internally, I would focus on communicating the ethos of the vision-setting exercises. I would want all parts of the company to understand what is going on, avoid at all costs a climate of fear and uncertainty. I would want the to feel part of it. I would also push greater transparency and a renewed sense of responsibilities. I would possibly even explain why and how I think we got there in the first place – perhaps lack of observation of our environment, complacency, lack of diversity in the thinking process, and fear.
I would invite all to engage in solution-finding. I would also draw on what made us a great company in the first place – the power of ideas, the power of sharing, the power of innovation, rich manufacturing abilities, the power of our leadership or people development programmes, to rekindle a sense of pride in our history. I would also make a point of communicating externally, maybe even engaging in a total rebranding – once the vision has been settled on – presenting the company as more customer-friendly or partner-friendly, more flexible and easier to deal with, to invest in, partner or do business with. I think I would also put efforts into presenting a more united face – one vision, one goal, one voice.
By doing so, I would hope to re-energise my people, make them once again part of something big, hairy and audacious. I would want to assure them they can have an impact and be proud, and, in the process, regain ground and trust from our customers and fear from our competitors.
As a leader, I would want to go back to connecting with others and inspire. I would restlessly invest in communicating in simple terms and making amends.
Finally I would be looking at fixing the financials. I would be concentrating on strategic sessions, assessing the strong business units and the weaker ones – which could deliver more, which should be on a watch-list or be ring-fenced to give them a chance to recover.
I would explore different performance metrics and results as long as the overall objective was to buy into the vision. I would even be prepared to let some of the business units go.
I would put the word “economic” at the centre of the equation, and ask every business unit to take time to think about why it is critical to the overall equation, to the creation of value and how it could contribute – maybe in different ways, such as focusing on research and development, innovation or even on specific types of product. I would also encourage them to look at their cost structure.
I would do this using a small group of diverse people to think and take action. The ultimate objective would be to create a renewed sense of value – a sense of sustainable, long-term value.
Some of you are thinking these are easy examples and radical proposals. They can work only when is a concentrated leadership structure, where there is one CEO, one decision-maker. It will definitely not work for European institutions, it is clearly not the same. But my answer is: Why not? Have you ever tried? How can you dismiss innovative, different solutions?
In a company in such a state of crisis, everything should be explored, any solutions, angles, however unorthodox it sounds, or could be.
So let me summarise for you, and that might be the most controversial element of all. If I were the new CEO of EU Inc, I would prepare the company for something that could look like to a management buy-out.
What type of leader would I want to be?
I would want to be a leader who takes stock, and is collaborative, I would want to be leader who is humble and understands the past, including past mistakes.
I would want to be a leader who communicates and inspires, who thinks about new ways and strategies.
However, I would be a leader who puts the economic imperative back at the centre of the equation, because regardless of everything, money still makes the world go round.
At the end of the day I would be a leader brave enough to challenge the model… and willing to break it.
What would you be? What will Europe become?