Need speed?

When I studied strategy at the University of Virginia’s business school, we studied two cases where the leaders acted at different speeds.  Crown Cork & Seal faced a threat to its very existence from red ink, bloated overhead, and commodity products.  At L.L. Bean, in contrast, a new CEO came into a family owned business with generations of success behind its hunting and fishing catalog business.  The CEO at Crown, Cork and Seal conducted a brutal turnaround, firing hundreds, slashing non-competitive products, and closing down surplus manufacturing.  LL Bean went through fundamental shifts as well, with a new brand and product lines that broadened Bean’s traditional customer base; but change came slowly, respecting Bean’s previous successes.

At my alma mater in June, a leadership drama unfolded over speed:  fast or slow?  In a stunning series of events, the head

of UVA’s board, Helen Dragas, gathered supporters and notified UVA’s popular president, Teresa Sullivan, that she had the votes to remove her.  Sullivan resigned, and in the ensuing two weeks, a public conflict between the board and the rest of the university transfixed the state.  According to press reports, Dragas, a hard-charging construction firm owner, was dissatisfied with Sullivan’s pace in reacting to UVA’s challenges.  Based on Sullivan’s May strategy memo, the two leaders agreed on what ailed the university.  But Dragas felt Sullivan wasn’t willing to make fast, hard choices, and she rallied UVA’s board, delaying direct confrontation with Sullivan until she was ready to fire her.

In the ensuing fracas, Dragas apologized for a removal that created “pain, anger, and confusion” while painting a compelling case for change, including sharp analysis of the competitive environment for elite academics.  As protests mounted, several of Dragas’ allies resigned.  On June 26, UVA’s board reinstated Sullivan; a few days later, the Governor reappointed Dragas to her board position.  Sullivan was generous to Dragas, and the women entered the meeting saying publicly that they were determined to work together.  At this point Dragas must be chastened, but it’s still unclear whether UVA has opted to go fast or slow through its challenges.

Crown Cork and Seal’s CEO could move faster because its existential crisis was obvious to everyone:  the company was fat, slow, and hemorrhaging losses.  In retrospect, it’s easy to conclude that with its consistently high national rankings, UVA was more like L.L. Bean.  But in her strategy memo, even Sullivan recognized UVA’s reputation was greater than its academic reality.  Examples abound of successful organizations plummeting to failure; most recently, Research in Motion has gone in five years from being the undisputed leader in smartphones to near bankruptcy, thanks to Apple and its iPhone.

Dragas’ failure at UVA was not her diagnosis of the crisis, but her reluctance to trust Sullivan enough to disagree with her directly.  In a world where failure happens fast, staying silent wasn’t an option.  But to gain Sullivan’s support, Dragas needed to risk direct dialogue, and to settle for incremental change that might happen slower than she would like.  Even then, there was no guarantee of success.  University governance does not allow for rapid surgery that might be possible or even required in a private firm.

The hug captured by a student journalist after Sullivan’s reinstatement brings hope that these two strong women will become the effective co-leaders that UVA needs.  As an alumnus, I hope they’ll build trust by talking regularly and openly about how fast they need to open UVA’s throttle for change.

Photos by P. Kevin Morley (Times-Dispatch) and Veronica Manuel (The Cavalier Daily).


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