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CEOs on How to Handle a Jim Jeffords Situation

Dear Mr. President,

It's too late now, but maybe you should have oiled that squeaky wheel. With the darn thing fallen off, you're going to have some trouble steering. Sure, your $1.35 trillion tax cut is in the bag. But what'll you do now that Vermont Senator Jim Jeffords has walked out on the Republican Party, putting the Senate in the hands of your archrivals? Given your past management experience, you oughta know: CEOs have to keep their top lieutenants happy to keep the company rolling forward. If you're Douglas Daft at Coca-Cola, for instance, you can't have one of your key people defect to the enemy's camp over at PepsiCo.

O.K., maybe Jeffords was a lost cause by the time you got into the loop. And his views on the environment, education, and social issues might have been out of step with the rest of your team's thinking. But George, you should have paid closer attention to him. Any CEO will tell you that listening to execs makes the underlings feel like they matter -- and it scores major brownie points with them. A compromise on special-education funding -- a subject high on Jeffords's agenda -- might have been worked out in a way that would have kept him happy.

Remember this, too: Nothing cements a relationship like recognition. Next time the teacher of the year hails from a small state like Vermont, it would be best to invite the state's esteemed senator to the photo-op. Who can say for sure that a little more diplomacy wouldn't have kept Jeffords from bolting faster than that East Coast Amtrak innovation, the Acela Express?

Your teachers at Harvard Business School probably told you that any leader has to build a loyal staff. And bravo! You've managed to put together a team of highly trusted deputies. But any management professor will also tell you that execs with different opinions aren't necessarily disloyal. In fact, to be responsive to their various constituencies, companies should have CEOs who respect a diversity of opinions. Heck, you yourself have maintained that you're a uniter, not a divider. Remember the theme of your party's shindig in Philadelphia last year? The party of inclusion.

Mr. President, BusinessWeek Online has asked a few corporate CEOs how they would have avoided this pickle. Here's what they told us.

Edward Mu?oz, chief executive of Ticona, the technical polymers business of German chemical company Celanese:

Not knowing all of what [the Republican Party and Bush] did and didn't do, my suspicion is that there never was a serous eyeball-to-eyeball sitdown between Jeffords and the President. You can offer all the trimmings, but at the end of the day what's absolutely necessary is a one-on-one, "I need you" talk. Call it ego. If [Bush] didn't sit down and say, "I need you, your country needs you, your party needs you" then there was no chance.

We're all guilty of not communicating enough with some of our top people. I've been guilty of it. Some of my previous bosses were guilty of it in dealing with me. [Senior executives] may feel like they're swimming up river, so to speak, but in many cases, [the problem] has to do with communication. If [CEOs] do communicate, they might find out that their strategy is wrong, that it should be tweaked. Or the executives might find out that they didn't quite understand the reasons for the strategy -- and get on board.

[Even] if you have a sitdown, it may be that because of cultural differences, you can't change the person's mind. While you absolutely need input from everyone to lead, you can not lead by 100% consensus. In that case, you just have to understand that the inevitable is separation. The key is to separate with respect and an agreement to disagree.

You have to end it with "I'm sorry I couldn't change your mind. It doesn't change the fact that I think that you're terribly important and that this is a loss for us." You stay with that message of "I respect you, and you were a valued member." What I've read is that there was a lot of "Well, good riddance to [Jeffords]."

When I've not been successful in keeping good people, I've bent over backwards to throw them a good going-away party and send a clear message to the organization that we're sorry this happened. By doing that, you stack the deck so that it doesn't happen with the next-best guy. If you can't keep the person from walking out, the next best thing is to show the organization that you don't burn bridges. I don't think that's happened in the current situation.

Skip Battle, chief executive of Ask Jeeves and former managing partner at Accenture (formerly Andersen Consulting):

Jeffords' equivalent in a company is to be welcomed, not avoided. At Andersen [now Accenture], we used to call them "wild ducks." If you don't have senior people with different points of view, you're probably not going to be successful. I don't know how you adapt and change if everybody is on the same sheet of music. It sounds like there was no room for Jeffords to feel like his dissent was creating a better answer. The way you reward people with different viewpoints is to make sure they know they're helping the company get the better answer. Jeffords' contribution was seen as dysfunctional instead of functional.

Bush made two big mistakes. His first is that every company needs to create a vision that allows people to see beyond their own personal interests for a greater good. The best example of this in America is Martin Luther King, who was able to have an enormous umbrella, under which anyone who believed in the dignity of man could fit. You didn't have to be black to follow King. You just had to believe that we should judge people by their character and not the color of their skin.

The umbrella at a place like Ask Jeeves is to delight our customers and more than satisfy our advertisers. A whole bunch of people with different values [can] get under that umbrella. There hasn't been an [umbrella] in the Republican Party in the last six months. If you can't make the moderates -- who, in the Republican Party, are the wild ducks -- feel that their difference is valuable as opposed to deviant, you've got a serious problem.

Bush's second mistake is that you never, never, never, never embarrass your people. Think about leaving Jeffords out of the White House ceremony for the teacher. I'll bet that Jeffords has visited the school where that teacher came from. I bet Jeffords knows a dozen people who know that teacher. There's real personal contact. You bring that teacher to the White House, and you don't have Jim Jeffords there? That's so disrespectful. It's a violation of decent values as well as of good business practice.

[Still,] if there's a senior lieutentant who has made a big contribution but doesn't believe in the direction that the company is headed, then it's time to part ways. That [degree of disagreement] goes way beyond the notion of loyal opposition to the way the business is expanding abroad or careful concern about how we at Ask Jeeves blend the value of the customer experience with monetizing the site. You want spirited debate in those [situations, but] when you come out of the room you all need to be on the same side.

Bush is going to be doing a lot more heavy lifting until November '02. My guess is that he and [senior adviser] Karl Rove have commiserated about this and said, "Oooh, we could have played this differently."

Marion O. Sandler, co-chief executive of Golden West Financial Corp., a savings-and-loan holding company:

If the person were key, you would do everything you could -- within reason -- to reconcile the situation. What I read is that one of the big problems [between Jeffords and the GOP] was not so much a disagreement but how it was handled. It was confrontational. It was not, "how do we get to a win-win situation." They were apparently punishing this guy to bring him in line. It was more a disciplinary, flex-your-muscle situation, rather than a collegial situation, where you try to find a solution that is mutually acceptable.

[A manager faced with such a situation] should find out what's on that person's mind. It just seems so obvious. You find out what's bothering them, what it is that would make them happy, and then see if you are able to do that. As I understand it, Jeffords was acting in a way that the Administration didn't like, and as a consequence, they were punishing him, humiliating him. I don't know what they expected to accomplish by that.

Bush is a brand new CEO. He's making waves. His style is different. Some people find it very difficult to accept. That requires a great deal of finesse on the part of the CEO -- to make changes and have them be accepted.

[Bush] could have made nice-nice. Been sympathetic. Seen if there was anyway that he could satisfy [Jeffords]. The first thing [Bush] needed to do is evaluate the situation: Is this guy kidding? How serious is it? What are his needs? Can I meet his needs? Do I want to meet his needs? Do I care? You really have to come up with a strategy. If the person is key, it's very important to get all your ducks in a row and see if you can resolve the situation.

Roger Siboni, chief executive of software company E.piphany:

If a key executive is at odds with the company's strategy, [they] should leave the company. Having the wrong person in a company is totally disruptive to the organization. I think it's very important for every organization to develop and live by a core set of values that help shape the actions, decisions, and culture. If the U.S. Senate was my company and a key lieutenant didn't believe in or live up to the defined set of core values, I wouldn't have tried to keep him from defecting.

Every CEO wants to surround him or herself with the best and brightest people in their fields who complement and support his/her own talents. What I've learned is that communication is critical to keeping these folks engaged in the company. You must listen well and create a means of two-way communication. A decision such as leaving the Republician Party or leaving a company is not made overnight. Usually a series of events contribute to such a decision, so it's important to be in tune with your team.

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