Prepare 3 letters

On day one in the new job, a CEO finds 3 letters written by their predecessor on their desk.

The first letter is clearly marked “Letter 1 – read this first!”. 

The CEO opens the first letter…

Dear sir or madam” the letter read, “Many congratulations on your appointment. I wish you all the best. I had a great time as CEO but when things got a bit bumpy I found the letters written by my predecessor a huge help. So, if you indulge me I have also written you three letters.

If you find the business is in trouble, please open the second letter (clearly marked “Letter 2″). It will tell you what to do, best wishes, etc etc”

Not long into the job, business started to deteriorate. Months went by and results were not improving.

So the CEO opened letter 2. 

It read: “Sorry to hear things are not going well at the moment. My advice is clear and simple – do what you think is right. Reorganise. Remove some people, hire new ones. Do what you instinctively feel in your gut, and more often than not this will see you through. Oh, and to buy you a little time, blame all your current ills on me. Tell the Board and staff that you will need some time to turn things around. This should work. Oh, and if things ever get bad again or don’t get better soon, open Letter 3.”

The CEO took the advice contained in Letter 2. Some changes that the CEO felt had to be made were done, and the current problems were laid at the former CEO’s door. The Board allowed some time for a turnaround, and slowly but surely things did improve. Everyone, including the CEO was mightily relieved and content.

Sadly though, a year or so later the business once again slid into financial trouble. No matter what our CEO or the team did, things went from bad to worse. Pressure mounted.

Then, the CEO remembered Letter 3. Letter 2 had worked last time, so with great anticipation, the third letter was opened.

It was much shorter than the other two.

Prepare 3 letters,” it solemnly intoned. 


I’d like to draw two main points from this story. 

1. Leader as Hero

Our need to ascribe brilliance to a business leader (Jobs, Branson, Gates, …) due to the results delivered under their stewardship may provide a hero for others to emulate and neatly wrap in a bow the cause for the success. 

However, in an excellent TED talk from Bill Gross, the greatest single reason for business success was found to be timing. Not leadership, or the team, or the product or the business model or marketing or the execution. Just the happenstance of entering a market not too early, and not too late.

Surely those leaders that succeed (even if it was just to time it perfectly) deserve some credit though? Well yes, by definition, to the victor the spoils… kudos, material wealth, prestige and a lot more besides are given to leaders of a successful business. But be careful to lay all the success at the door of the leader.

In the same way a leader may not be able to prevent a collapse in their industry or market, and that’s hardly their fault, they should not be praised too highly if things go the other way. 

2. Blame the Leader

If a football team has a bad run of results, the manager comes under pressure. Eventually, the manager is sacked (few get to retire gracefully) and another one is put in their place. Often, the results improve. Why? Sometimes the change in leader shocks the team into better performances, or it could be completely coincidental (the better results may have been around the corner anyway). Is it because the new leader is a better motivator of the players, or has better plans? What if the results get worse under the new person – do you sack them as well? Or some players?

Getting rid of the leader is one sure way for the Board to say “Look, we acted.” The last person takes the blame, a fresh new approach will take us to the promised land. (Cue 3 letters!)

However, I see the same football managers (who have been sacked countless times previously) get recycled around the leagues like toilet water in Queensland. Are they suddenly better managers? If another team thought they were the answer, why did they not prove it with their former teams? Will it inevitably turn sour at the new club? At least part of this merry go round is a complete waste of time, angst and money.

Of course it happens in politics as much as in business and sport. We tire of our government or Prime Minister and blame all current ills on them. A reasonably well equipped opposition leader (or, more likely, another Minister in the same government) can be presented as positive, shiny and new with a plan to make things better. In time, the public (or party room) is duly won over and the new person “climbs the greasy pole” (as Disraeli once termed it). After a while we get bored of them as their shiny newness pales into dull familiarity. And so it goes … another new Prime Minister, football coach or CEO.

If all this sounds a bit cynical, then possibly it is. 

Of course there are good leaders and bad ones. (Goodness me, are there some bad ones! Sometimes I wonder how some businesses survive, but then again, that just proves my point about the leader not being the be all and end all.) You probably know a few. You may be working for or with one.

Sometimes good leaders are working under incredible pressure. Any CEO in a small not for profit or charity or mining company would be doing it really tough at the moment – have they become bad leaders overnight just because the business environment has turned bad or the iron ore price has tumbled? Others might be steering a plum organisation that is soaring due to a commodity price upturn or industrial popularity (think tech business in 2015) not of their making.

I believe a few things about leadership:

1. You can learn to be a better leader. Absolutely. There are books, courses and videos on the art and science of leadership. There are examples to look up to. There is also nothing like many decades’ experience of actually doing it. 

2. Timing is (almost) everything. You can turn circumstance to your advantage (which is what leadership is much about). Be careful to time your run. Know when to stop loss. 

3. Stay close to your staff, and especially your clients. They’ll tell you the most important stuff. The best leaders know this, instinctively.

4. The “3 letters” story above is an old joke, but there’s some truth in it. A leader, a CEO, a politician or a sports manager can only do so much. They can set the tone, direct the strategy, lead the ship and be a figurehead, but often the storms that happen can be all too consuming, and no matter what the leader does, things will out. Playing “Pass the Leader” may make the ultimate decision-maker look decisive, but what skills walk out the door when that happens, and what skills walk in with the next encumbent? Then again, a fresh new start can often be good for all concerned, right?


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