Prior Posts:
Leadership Intro
Correction from the last post. These interviews I’m referencing are not from HBS – they’re from Wharton.
I’m starting this series with an interview with Art Weinbach, the current CEO of Automatic Data Processing. Based in Roseland, N.J., ADP has more than 42,000 employees and 550,000 clients in the United States, Canada and Europe. Over half its revenue — more than $8 billion in fiscal 2005 — comes from data processing services to employers, where it says it pays one in six private sector workers in the U.S. Other divisions service brokerage houses, automobile dealers and insurance company claims offices. Earnings per share grew 15% in fiscal 2005.
Weinbach traces his success to a formula based on luck — which includes surviving your mistakes — taking risks, hiring the right people and delegating as much authority to them as possible. For example, most decisions in a company are “90-10” or “80-20” decisions, he said. “And those should be made by other people. Save yourself for the 60-40 or 50-50 decisions,” where there is a real risk of being wrong. “It forces me into great things and it forces me into hiring great people. ((“Career Advice from ADP’s Arthur Weinbach” Knowledge@Wharton. Retrieved from http://knowledge.wharton.upenn.edu on January 27, 2006.))
As a consultant I’ve always wondered about this. I’ll walk into situations where I think the decisions are easy. We talk about analysis paralysis, but it’s true that too many people are frightened to “pull the trigger” even in obvious situations. The desire to escalate decisions, and thus accountability is too easy. The result of this is that leaders are consumed with unnecessarily spending time on tasks and the subordinates don’t become leaders themselves. (In my situation I’ll admit it’s different because I’m not generally empowered to make decisions).
Among Weinbach’s views on other topics:
- Delegating authority: He likes to get to the point in a job where he has nothing to do because this means he has mastered enough to delegate and can “then go out and do something else.”
- Hiring and firing: “I’m proud of my ability to hire great people.” On the firing end, “I always have waited too long.”
- Client Service: Too many companies, he said, are content simply to be rated better in this area than their competitors. What they really should be doing is not just remaining number one but raising the bar — setting their own higher goals for reduced complaints and increased client retention.
- Motivation: “People don’t take the hill because they’re scared. They take the hill because they have confidence in you.”
- Offshoring and Outsourcing: “It’s something you have to do to compete globally today. You have to solve the larger problem.”
- Corporate scandals: “Any CEO who doesn’t react to the sentences being given out is nuts. Any CEO who doesn’t worry about Sarbanes-Oxley is nuts.” ((Ibid))
I though Weinbach’s admission that it takes too long to fire people interesting. I wonder if this is not a trait of leaders. I think managers will tend to look at situations and dispose of under performing people quickly. However, leaders generally tend to have overly optimistic pictures of both people and their (the leader’s) ability to mold the employee.
I loved his piece about motivation. All too often I’ve been subjected to rather terrible management, and the only reason I was able to take “the hill” was due to leadership I found in other parts of the organization. Sometimes I find that I’m not working for a particular company, but for an inspirational person within that organization. Tag on the part about him being the CEO of one of the largest pure HR companies in the world, and you have a great model for leadership.
