THE recent exit of many high-profile chief executive officers (CEOs) from the corporate world brings to mind the story of the Three Envelopes.
The story begins when a major organisation undergoes a leadership change. As the incumbent steps out of the office, the new CEO approaches him for advice.
The outgoing CEO says: "I am sure you will do a great job here, but if you meet any problems, here are three envelopes with solutions. You should open the envelopes according to the numbered sequence."
During the first 100 days of the leadership transition, the new CEO experiences poor financial performance, late product deliveries, many complaints and low employee morale.
He needs a quick fix, so he opens the first envelope. He pulls out a piece of paper. It says: "Blame your predecessor." So he blames his predecessor for the problems he inherited.
Nine months later, there is still no improvement. He opens the second envelope and it says: "Blame your staff."
The CEO goes on a witch-hunt and reduces the company headcount by almost half. By the end of the second year, the financial performance is worse than when he started. Desperate, he opens the third envelope that says: "Prepare three envelopes."
If you had to prepare similar envelopes for your successor, what advice would you give? Here is what you should write:
Envelope 1: Listen and lead with questions
Whether you are newly heading a group or an organisation, lead with questions. When a leader asks questions in a considerate, consistent and respectful manner, uncertainty and ambiguity are removed, and better understanding is created.
When a leader presents an issue to the group, everyone assumes he understands the problem. Such assumptions may unnecessarily increase ambiguity and uncertainty.
Everyone wants to know more in less time. When a leader listens attentively and follows up with the right questions, he conveys respect to the group and encourages the employees to see him as a thinker and problem-solver.
For example, if a product launch is late, there may be several reasons for this, for example, delays in approving prototypes or a lack of raw materials.
The leader and his group cannot learn the real reason without asking questions. Only when the leader asks, "What do you think the issue is?" does his staff start to ruminate on the issues at hand and finally identify initiatives to address them.
Envelope 2: Listen and build trust
Establishing trust during the first 100 days of leadership transition is crucial. Trust unites people. This happens through matching the three V-elements of communication: visual, vocal and verbal.
If a leader wants his message to be understood, he must not trigger fear. He must learn to be a perceptive listener and careful observer of verbal and other nuances to help him understand his employees' mindset and how they see him.
Listening builds respect and trust. Employees respond better to leaders who listen to them.
Envelope 3: Listen and inspire change
Understanding yourself and the impact you have on others help you listen better and inspire change. If a leader imposes his authority to coerce others, the the first impression others have of him - tyrannical - will be a lasting one.
People are willing to consider change if they are also allowed to share their views. Unfortunately, most leadership communication begins as a monologue or directive, telling people what to do or to follow the way things have always been practised.
If the leader appeals to his people using only logic, he misses the chance of connecting emotionally to inspire change. Instead, he should start a dialogue with his staff.
When employees feel they are being heard, they become enthusiastic and may even come up with new ideas to solve a problem, or be more receptive to change.
Pressure for results
Racing against time, new leaders have to show results within the first 100 days and significant improvement within two years. If he fails to do so, he will end up preparing three envelopes.
Leaders in transition sometimes fail because of problems with leading their people and not their incompetence.
Managing and leading in this situation requires a delicate balance. Effective listening provides leaders with the necessary skills to maintain this balance.