How to Save “The Shack”


RadioShack is on the ropes. What can be done to save it?

Over my career I’ve seen this scenario several times.  Xerox comes to mind.  In 2000, when Anne Mulcahy became Xerox’s CEO, the company was nearly bankrupt.  Her leadership helped save it.  In 2012, I spoke with Ms. Mulcahy in a series of interviews about how she led Xerox’s turnaround.  She described three behaviors that were similar to how A.G. Lafley led the turnaround of Procter and Gamble, how Howard Schultz and Howard Behar led the turnaround of Starbucks and, more recently, how Alan Mulally led the turnaround of Ford.

Our firm’s research over the past decade found these three behaviors in leaders who achieved long-term superior performance. The behaviors brought about an extraordinary degree of connection, community and unity so that people pull together rather than retreat to protect self-interest. Stated another way, these leadership behaviors create a team that pulls together and protects the culture from spiraling down into a dog-eat-dog environment.

1. Restore employee pride

The lack of employee pride and engagement can drive nails in the coffin of a company trying to make a comeback.  Leaders need to get out, connect with employees and restore company pride.  Forget the Power Point presentations.  Speak honestly and openly about how together you can restore your company’s glory.

Anne Mulcahy told employees the Xerox business model was unsustainable then went on to express confidence in the people of Xerox and their collective ability to renew Xerox and make it a company they would be proud for their children to work for.  Mulcahy spent her career at Xerox and had the credibility to communicate this message.

After being introduced to Ford employees Mulally was asked what type of car he drove.  He candidly replied that he drove “a Lexus…the finest car in the world.” Mulally went on to sincerely describe Henry Ford’s vision of “opening the highways for all mankind. ” He expressed how Ford is making the world a better place and serving others.  Mulally described Ford as giving people “freedom of mobility” so they can “access opportunities for growth.” In time, Mulally’s message united Ford’s people around a cause greater than themselves and restored employee pride.

2. Show employees their leaders care

Leaders who care about the people they lead, and who effectively communicate they care, will find employees align their behavior with the leader’s objectives and plans so that everyone is rowing in the same direction.  Caring about employees has to be genuine rather than contrived (it has to be “real sugar, not Saccharine,” as they say in the South).

Anne Mulcahy cared about the people she led. Although she couldn’t pay them more, she found creative ways to reward their loyalty and effort. For example, she gave employees the day off on their birthdays.  When she had to make tough decisions such as shutting down a business unit, she personally went to meet with employees. She told them she was sorry, that it had to be done to save the company, and that it wasn’t their fault.

One CEO client of ours had us implement an employee engagement survey to, among other things, give employees an opportunity to share what they thought of their leaders.  When the CEO discovered leaders who kissed up and kicked down, he gave them the boot, even if they were talented from a business competence standpoint.  The CEO’s actions communicated he wanted leaders to create cultures where people thrived and would not put up with leaders who were sucking the life out of the people they were responsible for leading.

3. Tap employee brilliance

Finally, leaders who are leading a turnaround need to tap employee brilliance.  Some of the best ideas come from people on the front lines.  During World War II it was a sergeant who came up with the idea for the Rhino Tank that helped liberate France.  At Starbucks it was a barista who came up with the idea for the Frappuccino.  At Intel, it was employees who shared their views with Andy Gove that persuaded him to refocus Intel on microprocessors.

One of the most effective actions Anne Mulcahy took to save Xerox was to hit the road and invest time meeting with employees and customers.  She shared her thoughts on how to save the company, she asked for their ideas and opinions, then she considered them and implemented the best ones.  This energized the Xerox workforce by making them feel heard and empowered.  And it identified some of the best ideas for execution.

Although these leadership behaviors seem like common sense, they are uncommon in practice.  If RadioShack’s leaders restore employee pride, show employees they care and tap employee brilliance, there is a higher probability they will reignite the RadioShack workforce, discover actions that will save the company and inspire execution marked by extraordinary energy and excellence. If they ignore these leadership behaviors, the Shack will most likely be shuttered for good.

Related Links:

Overcoming Leadership Myopia (with Starbucks’ Howard Behar)

The Competitive Advantage of Connection Cultures

7 Practices of Alan Mulally that Helped Ford Pass Competitors

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