Lehman Brothers Merchant Banking
Mutual understanding and agreement of both boundaries and consequences lead to truly superior execution of any vision or strategy.
Charles Ayres also views himself as a very hands-on manager. “I like to walk the ‘plant floor’ on a regular basis and interact at all levels,” he says. “I want the team to feel that I am around and care about each one of them.
“I have a very open-door policy and basically say shame on you if you have an issue and you don’t seek me out. I try to make our employees comfortable that, although I am not the complaint department and have no monopoly on good ideas, I do have time to listen to legitimate ways to improve things.
“I also give people room to develop and decide on what becomes their own style. I don’t want anyone to be a pale imitation of anyone else. Therefore, I give people room within the parameters of specific goals that need to be accomplished. This allows people to get from stated A to my expressed point B in their own way, where I am very tolerant to their own individual style.
“Although as stated above, I am flexible on style, I try to be very clear and regimented on structure, especially concerning who is playing what role. I don’t leave this to chance, and try to make sure that everyone is very clear about the role they are playing and what my expectations are. The more time I spend on this clarity up front, the more time I save later, with better outcomes.
“Believe it or not, all the teams I have built and worked with, where I was expected to play the lead, embraced the idea that I would be the
‘Benevolent Dictator’ when it came to caring for the culture of the group. Once the rules were clearly articulated and understood, team members took solace that I, not they, would have to enforce these rules— and that the rules would be the same for everyone.
“This is where trust and respect is crucial. If trust and respect exists for the leader, and the team believes that the leader-dictator (sounds dramatic purposefully) is inherently fair, then the team wants the leader to enforce, dictatorially, the established and agreed-upon rules. The team will continue to support and respect the leader until the leader no longer lives up to his dictatorial stature and is no longer evenhanded.
“In reviewing my most powerful leadership techniques, it is important-to note that I am defining leadership as getting a group or team to do what you want them to do. Whether they admit it or not, adults in the workforce, even at very senior levels, like and need clear boundaries.
“My leadership secret lies in the clear communication of these boundaries, backed up with consequences if the boundaries are breached. I have found that mutual understanding and agreement of both the boundaries and consequences up front lead to truly superior execution of any vision or strategy.
“By just having the conversation, it naturally establishes credibility, control, and care. It focuses the group on execution of the task at hand, eliminates noise and distractions without squelching creativity, gives people confidence that the rules are the same for everyone with no special treatment for any individual, and allows for a fair, quick, and clear move on the consequences if the boundaries are compromised.
“Setting boundaries and consequences becomes self-policing, so that it saves the leader and the team time, since everyone is clear on what to do and how to act. It does, however, require the leader to live up to the responsibility of making good on both the boundaries and consequences that have been established and agreed upon.
“I have used this technique twice very effectively in leadership positions I have held in the past four years. Once as Head of North American Merchant Banking for Deutsche Bank and once as Global Head of Merchant Banking for Lehman Brothers.
“In both cases, within the first week of my appointment to the new position, I sat down individually, for at least an hour with each member of the group I was to manage. After getting to know them, I told them I wanted to be clear on my expectation for them and my managerial structure and style.
“I told them that I believed in a partnership model for investing, which revolves around a consensus-building process where the group as a whole would become comfortable or not with a potential investment. I took them through the specifics of a deal decision process that would result in making or declining an investment that involved all of the partners.
“I then shared with them that from a cultural standpoint I would run the group as a benevolent dictatorship. I explained to them that to preserve the integrity of the deal decision process, I needed to create a safe environment in order to discuss potential transactions. This called for a culture that would allow for team members to feel that they could not only put the merits of a deal on the table, but also be comfortable discussing the warts of a transaction openly.
“To create this culture, I laid out the boundaries that would provide for and reinforce this supportive environment. I told them I would not tolerate anyone being mean-spirited, manipulative, divisive, or not a team player. This would be fairly determined by me and me alone, and the consequence was immediate termination. I told them that I would not let any one individual undermine what was best for the entire group, and that my responsibility was to the whole team.
“I then made sure that each individual clearly understood these boundaries and consequences and agreed to operate within them. If they could not or would not, I let them know that I would provide for a smooth transition over time, which would be preferable to agreeing to something they could not or would not be willing to live up to.
“In both of my experiences thus far, I have had great success with this model both in reducing turnover, making prudent investments, and building a sustainable organization. In addition, I have not had to move on the consequences and terminate anyone in either of these situations.
“Leaders are not only born leaders, but it helps! There is a certain genetic make-up that makes it easier to lead, including physical presence (not just size) and charisma. However, leadership skills can be learned, but must be stylistically consistent and comfortable to an individual to be accretive.
“The best way to become a leader is first and foremost to want to lead people. There are plenty of people who may think they want to lead but who really don’t!
“Assuming this is not the case, becoming a better leader is an apprenticeship business. Having a mentor and being around many leadership models is key.
“Drawing the best parts of many leadership models that seem to resonate and work for you is a good start. Be the guinea pig yourself to determine what is effective. Weave these behaviors into your own style and try them out.
“However, you need to have conviction in your own model to be effective and improve. People have a sense if you are unsure of yourself and will not be willing followers.
“People want to be led by someone strong; who they believe will take them to the place they want to go. Understand this early and you will immediately be better at it.”