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May 8, 2002

Management Principles For A New Age

By Jim Leverette & Randy Neal

The fiasco-turned-success of the theme park formerly known as Euro Disney continues to inspire management treatises. Many of these chide Michael Eisner, et al, for their intercultural arrogance in forcing “American” methods on the French, pointing out that success came only after Disney altered the park to meet European expectations.

For some time we had intended to write our own management handbook based on the Disneyland Paris experience, something to guide executives through team-building and success in a global economy. Yet so many of the above mentioned articles hammered on the entertainment company’s failure to understand cultural differences and listen to French advisors that our original lesson plan — listen and understand — lost all relevance.

Disney presented an easy target, of course. They imported ideas antithetical to their anticipated customers and future employees, banning wine, for example, at park restaurants and dictating employee dress and behavior (no black berets, no Jerry Lewis films . . . just kidding). They also failed to comprehend that labor unions in France play a different role in the labor-management-government equation than in the United States, that Europeans vacation differently than Americans, that the French jealously guard their culture, and so on. After several years of disappointing results, Disney finally altered their methods.

Perhaps the most glaring — or at least most recent — example of such executive hubris comes from the horde of young dotcom executives who so assuredly proclaimed a new economy and a new way of organizing companies. The new economy model assumed several things: the efficiency of technology, an insatiable demand for Internet access (in homes, automobiles, refrigerators, shopping malls), and so on. The new organizational model intertwined elements of home, office, and frat house. Both models were created by eager techies for eager techies, with uncertain regard for outside realities. They told us that companies not investing in IT “solutions” would die a horrible but rapid death. They told us that companies must select offbeat names like Sixty Foot Spider or BigfatWow in order to generate success. In other words, skilled IT professionals who happily gather around Internet kiosks or at cyber cafes or huddle over a batch of networked computers at home, assumed the outside world shared their values. Indeed, many executives at traditional firms bought into the idea of IT “solutions” — some successfully, others without thought.

The collapse of these models recalls the auto industry’s tumble in the ’70s, when executives leaned on decades of success while ignoring new realities. Warnings of new emissions standards failed to penetrate their comfortable boardrooms. An economic crisis and rising gas prices caught them by surprise. They responded poorly: cutting horsepower for the steel behemoths, making them sluggish; hastily creating fuel-efficient cars like the Vega, without first working out the bugs; generally losing market share to foreign companies. Japanese manufacturers, meanwhile, sent teams to study consumer needs and built vehicles accordingly.

Learn and Move On

In thinking about all three cases — Disney’s initial failure in Europe, the dot-bomb, and the near collapse of the auto industry — we realized the shortcomings of many executive success manuals. Aside from the ever-present jargon (one article emphasized “third culture building,” a model that “can be characterized as a phenomenological-interactionist approach to communication”), most educational seminars, guides, courses for executives explain the importance of listening, team-building, multi-cultural understanding, and the like. But to whom do you listen? The dotcom executives listened. They heard the rumblings of business revolution in the media, on Wall Street, and at conferences. A few voices in the late ‘90s warned of a fall, but these were often obscure and almost always drowned by optimistic pronouncements. What do you need to understand? Disney successfully launched a theme park in Japan prior to the European venture. The opening of an Asian Disneyland suggested that the business could be transported across borders and cultures.

It’s tempting to examine corporate setbacks and generate some new management principle in response, like TQM or management by walking around, something catchy and applicable. A producer of television documentaries once explained to us that leadership of a diverse organization (camera and audio people can be an interesting lot) required making everyone happy except himself. The only thing that matters, he said, was the project. Getting that right required the continued support of all involved in the project. The producer’s role, therefore, often involved sacrificing his own comfort for that of others. The crew, for example, must buy into the project, so the producer bends some, works with their ideas and quirks.

Disney rigidly imposed their methods. The dotcomers adhered blindly to the hype. Detroit failed to bend, even when confronted with massive change.

The examples above suggest that leadership today requires a broader base of knowledge than the usual B.S. (that’s not just a pun). Somehow we managed in the past to educate and train executives skilled in efficiency, organization, and rapid growth, but susceptible to hubris and cultural ignorance — an often costly combination. Knowing when to bend, when to sacrifice comfort, where to find real information, how to understand cultural change, and all of the other subtleties of a global consumer market, simply demands more. It’s not listening that matters, but who you listen to. It’s not understanding something that matters, but understanding it in a broader context. It’s not rigidly delineated management models that matter, but the ability to place project success above ego, organizational chart, and party line.

Thus far – our management guidebook. It’s indecisive, perhaps. But when searching for an executive it may help to find someone who, to paraphrase Ben Franklin, doubts a little of his or her own infallibility.

Jim Leverette is senior vice president and Randy Neal is managing director of The Broadmoor Group, a Dallas-based global executive search consultancy. You may contact them at