Does your organization need a shared statement of vision? Too many leaders I talk with feel they don’t have a choice in the matter. For better or worse (I think the latter), “leader” and “visionary” have become viewed as the same thing. And being visionary is equated with creating and communicating a vision statement.

In 2004, my colleague Max Bazerman and I published Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them. We defined "predictable surprises" as problems that
(1) at least some people are aware of;
(2) are getting worse over time; and
(3) eventually are likely to explode into a crisis, but are not prioritized by key decision-makers or have not elicited an effective response mobilized in enough time to prevent severe damage.

I’ve decided to end 2007 and usher in the new year with the first annual Predictably Surprised Awards, granted to the people who either should have seen it coming but didn’t (call them the “Predictably Surprised”) or saw it coming and demonstrated the sort of leadership we need more of (call them the “Courageous Cassandras”). I’m also going to go out on a limb with a few predictions of my own for 2008.

My first Predictably Surprised Award for 2007 goes to former Secretary of Defense Donald Rumsfeld for failing to figure out for more then three years that the best way to fight an insurgency in Iraq was with counter-insurgency tactics. As a recent front-page article in USA Today charts in depressing detail, Rumsfeld and his advisers were being told and told again that the administration’s clear-and-hold, train-the-Iraqis-and-get-out strategy wasn’t working. But, and this is a hallmark of the predictably surprised, they tried to define reality to be consistent with their beliefs and hopes, rather than the other way around.

The companion Courageous Cassadra Award goes to General David Petraeus, who stuck with his guns (if you will pardon the pun) to make counterinsurgency work, first in Anbar Province and now increasingly in Iraq as a whole.

My second Predictably Surprised Award is granted to Alan Greenspan for ignoring repeated warnings about the risk of sub-prime borrowing to the financial system. As The New York Times has documented in unequivocal terms, Greenspan was repeated warned by serious people that sub-prime lending posed a serious threat to the US financial system, and repeated did nothing about it. Here, it seems that blinkered belief in Ayn Randian ideology (ideological blindness is another common cause) may have played a role in tarnishing the Maestro’s legacy.

The companion Courageous Cassandra award is shared between Edward M. Gramlich, a recently-deceased Fed Governor who began sounding the alarm about lending practices more than seven years ago, and Sheila Blair, a senior Treasury official, who tried to push subprime lenders to adopt a code of “best practices” for their risky lending.

My third and final Predictably Surprised Award goes to George Bush for being one of the few people left on the planet who doesn’t think global warming is an existential problem. Lurching from arguing that there is no problem (denial is not just a river in Egypt) to asserting that nothing could be done to prevent it, Bush continues to fight a rear-guard delaying action when every serious climate scientist says we stand on the brink and there is still time to avoid disaster -- at a reasonable cost.

The companion Courageous Cassandra Award goes to (sorry, Al) members of the Intergovernmental Panel on Climate Change, which has done more than any individual or group to raise our collective awareness of the peril we face if we don’t take action, and soon to reduce greenhouse gas emissions.

And what about 2008, what predictable surprises lie lurking out there for us? My favorite candidates are repetitions of predictable surprises have already happened, call them predictable, predictable surprises:

• Another major Gulf-coast hurricane disaster, because little of what we have learned from Hurricane Katrina has been acted upon;
• Another financial systems crisis, because we let pernicious conflicts of interest take root in our financial system (my favorite current example is investment banks competing with their customers through proprietary trading and investing) and because we still have an allergy to appropriate government regulation;
• Another failure to deal adequately with global terrorism because we can’t act as a honest broker in pushing the Israelis and the Palestinians to reach an equitable agreement (Annapolis will fail) and we won’t devote the necessary resources to winning the war in Afghanistan; and
• Another failure for the U.S. to take a leadership role in dealing with the challenges of global warning.

Lots of other things will happen in 2008, predictable and not-so-predictable. But virtually all of it will be noise. It will be our collective willingness to step up or not step up to these sorts of big challenges that will be what matters.

Finally, lest I come across as a complete pessimist, I am cautiously optimistic that we will elect some leaders in 2008 that are actually willing to step up and do something about the gathering storm. If not, well, it’s really too awful to contemplate.

Note: This was written by Dan Ciampa and Michael Watkins. Dan is a leading advisor to CEOs and the author of Taking Advice: How Leaders Get Good Counsel and Use it Wisely.

Dear Mr. Pandit,

The decisions you will make during your first few months on the job will have a decisive impact on whether you ultimately succeed or fail. Your transition period is a time of opportunity, but also great vulnerability, in part because you are expected to change Citigroup in fundamental ways. Based on our research and experience working with CEOs in transition, we have developed the following set of guidelines for that will help you to create momentum during your transition.

As we visit Julia Martinez for the final time, thanks once again for the wonderful responses to the Julia Martinez scenario on making the shift from peer to boss. First we went over the challenges Julia faces. Then we concentrated on what Julia should do on her first day after the announcement of her promotion. Now, at last, we consider how she should prepare for her upcoming off-site.

The lure of the off-site meeting is strong for many leaders taking new roles. Like Julia Martinez in the promotion scenario we have been discussing, they have agendas they want to pursue and teams that they want to mobilize. “Just let me get the team in a quiet place with their attention undivided,” they say, “and we can move mountains.”

There is no question that off-site meetings are a potentially powerful vehicle with which to mobilize needed change. Done well, they focus attention, break through barriers, and build commitment, leaving teams energized, aligned, and ready to achieve great things.

But before launching reflexively into an off-site meeting, you, like Julia Martinez, would be well-advised to take a step back and think hard about (1) what you are trying to accomplish and (2) whether an off-site is the best way to accomplish it. Why? Because off-sites are no panacea and, without proper planning and facilitation, they can go badly wrong. In the worst cases, they cement divisive conflict, empower opposing coalitions, and undermine the leadership of the erstwhile off-siter.

The place to start is with the question of what you are trying to accomplish with an off-site meeting. There are at least six big reasons why you might want to take your team off-site:

* To gain a shared understanding of the business (diagnostic focus)
* To create a vision and strategy (strategy focus)
* To alter the way the team works together (team-process focus)
* To build or alter relationships in the team (relationship focus)
* To develop a plan and commit to achieving it (planning focus)
* To resolve significant conflicts (conflict-resolution focus)

One trap to avoid is trying to do too much in a single off-site. You can’t realistically accomplish more than two of the goals laid out above in a day or two. Decide what will your focus be beforehand.

A second trap is putting the cart before the horse. It’s easy to jump directly to trying to create a vision and strategy. But to have a successful strategy-focused off-site, it’s crucial that the right foundation of shared understanding (diagnostic focus) and work relationships (relationship focus) are in place.

You know what you want to do? Great. Now make sure an off-site is the best way to accomplish it. There are potential costs to off-sites that go beyond the requisite financial expenses. Chief among these is that you are committing yourself to accomplishing something significant, so you should be pretty confident that you will. Otherwise you risk pumping up expectations and then having the air leak out.

Opposing coalitions are a second reason why you might avoid off-sites. If there is a significant risk that bringing people together could crystallize latent opposition, then you would be well advised to proceed to build support through one-on-one and smaller group meetings until you're confident an off-site would succeed. This is akin to the way diplomats use shuttle diplomacy to lay the foundation for major summit meetings.

What are the implications for Julia Martinez? She wants to make a shift in her organization’s strategic direction but needs to convince her boss. She also wants to alter the way the team works to encourage more shared accountability. So it would be natural for her to focus the off-site on strategy and team process. It would also be a big mistake. She has not laid the groundwork with her boss for creating a new strategy, nor has she established sufficient authority in her new role to introduce democracy.

She should go ahead with the off-site. But the primary objectives should be diagnosis and relationship-building. She should work with her new team to do some rigorous diagnosis of changes in the business environment and come to a common view of the situation. That would provide her with insight and support that would help her to convince her boss of the need to shift the strategy. She definitely should not try to develop a vision and strategy or do any planning at this point. Her second major objective should be to re-engineer her relationships with her former peers, and establish herself, firmly but judiciously, in control. Once these foundations are in place she can turn her attention to strategy and process, perhaps by holding a subsequent off-site.

Assuming that you’ve concluded an off-site is the way to go, you can shift to three supporting questions:
* When and where should it be held?
* Which issues will be dealt with in what order?
* Who should act as facilitator for the session?

The “when” and “where” are of course dictated by schedules and availability. The schedule will flow directly from your agenda for the session.

Don’t neglect the “who should facilitate it” question. If you are a skilled facilitator of group process and if the team respects you -- and if the team is not enmeshed in a conflict -- then it may make sense for you to be both leader and facilitator for the session. If not, you would be well advised to bring in a skilled outsider. Keep in mind that involving a respected external facilitator both signals seriousness and can elevate your status.

Given that Julia Martinez is working to establish herself in her new role, she would be well advised to involve a skilled facilitator. The right person would help to buffer the emotional currents that are bound to be present in the room and also subtly assist her in establishing herself in her new leadership role.

Let's keep the conversation going. Do you agree with advice about why and whether to have off-sites? Do you agree with the implications for Julia Martinez?

Read all of Michael Watkins' "Leading Edge" posts.

MORE ON LEADERSHIP TRANSITIONS:
The First 90 Days: Critical Success Strategies for New Leaders at All Levels (Hardcover)
Off-Sites that Work (HBR Article)
Strategy Meetings that Work (HBR Article Collection)
The Leadership Transitions Collection

Thanks again for the wonderful responses to the Julia Martinez scenario on making the shift from peer to boss. Last week we went over the challenges Julia faces. Next week we'll consider how she should prepare for her upcoming off-site. Today we concentrate on what Julia should do on her first day after the announcement of her promotion.

There is a scene in Shakespeare’s Henry V that brilliantly captures the tensions that leaders like Julia Martinez face at the moment they are promoted to new roles. Henry has spent much of his youth hanging around with disreputable characters, in particular Falstaff and his cronies. Now his father has died and he is crowned King. In the coronation scene, he walks past Falstaff and essentially ignores him. This signifies the seismic shift Henry makes in the play from dissolute youth to one of the great Kings of England. His role, and hence his relationships, have to change dramatically.

This is not to say, of course, that Julia Martinez should in any way ignore her former-peers-now-direct-reports. Rather, it highlights the importance of rites of passage in symbolizing the shifts that newly promoted leaders make. And it has immediate implications for what Julia needs to do on Day One: first symbolism, then substance.

In an ideal world, the stage for Julia’s promotion would have been set by her boss, Robert Collins. He would have called the team together to announce his decision to promote Julia, and would have met privately with Andy to communicate the reasons why he made his decision. This would have laid the groundwork for Julia to transition smoothly into her new role.

Unfortunately, it didn’t unfold this way, so Julia has to write the script for and direct her own promotion scene. This should include calling together her team for a short meeting that constitutes a public acknowledgement by everyone that a shift has occurred. It should be short, because its function is mostly symbolic. She should carefully craft a short script around a few key messages: that she is looking forward to working with the team to chart a course forward for the organization, that she values their contributions, and that she is looking forward to meeting with each of them individually (if possible, she should already have begun the process of setting up those meetings).

The cafeteria scene mentioned at the end of the scenario is also rich with symbolic import. She comes to eat lunch on the day of the announcement of her promotion and is immediately confronted with a choice of whether to sit with her old peers or new peers. In the real situation, the person decided to go her office, which is definitely the wrong answer. The right answer depends in part on the culture of her organization and the implications for what the “right behavior” looks like in this situation. But it probably involves one of two options. Either she should (1) go first to her old peers/new team and say something about looking forward to meeting with them to chart a course forward and then go sit with her new peers or (2) she should stop by the table with her new peers to say that she is looking forward to working with them and will reach out to set up meetings with them individually, and then go to sit with her old peers/new team and begin to engage them in their views of the business situation.

Regardless, Julia must strive to handle the situation with grace. Ideally, her actions will look relaxed, and not convey a sense that anything really big is at stake. It is, but she doesn’t want to appear like she thinks it is.

Do you agree with this assessment about what Julia should do on her first day? If not, what do you think she should do differently?

Read all of Michael Watkins' Leading Edge posts.

MORE ON LEADERSHIP TRANSITIONS:
Becoming the Boss (HBR Article)
Living into Your New Promotion (HMU Article)
The Leadership Transitions Collection
Right from the Start: Taking Charge in a New Leadership Role (Paperback)

Thanks to readers for the wonderful responses to the Julia Martinez scenario. It’s clear that many leaders have faced similar challenges, and that there is a wealth of knowledge out there for dealing with them.

Because the scenario has a number of elements and because there is such richness to readers’ responses, I’ve decided to devote several posts to analyzing and discussing it. The remainder of this post will provide an overview of the full set of challenges that Julia faces. The next post will deal with what Julia should do on her first day after the announcement of her promotion. A third post will focus on what she should do to plan for and lead the off-site meeting. Beyond that, we could look at the challenges she faces in dealing with the boss and new peers in this situation.

The overall challenge for Julia Martinez, and every leader who gets promoted, is what I think of as “relationship re-engineering.” On the face of it, not much changes. The organization is the same, the culture and politics is the same, and the players are the same. Also, Julia has accumulated substantial “relationship equity” on which she can draw to get things done. She understands the business and the key levers that drive it. And she’s gotten the job because senior leadership believes she is the right person.

But what does and must change is all of the relationships that Julia has with others in the system: former peers, new peers, and her boss. As Kartik Jain notes in his response, “Work is not a problem because all the former peers of Julia are [professionals] and they know how to get things done successfully. [The] problem lies in the new…relationships between Julia and [the others].” This is why stepping up in your current organization can be fraught with peril. Because you think you know everyone and everyone thinks they know you, it’s easy to miss the fact that all your existing work relationships were shaped, in part, by the role that you previously played. The corollary is that now that you have taken a new role, those relationships must change: relationship re-engineering is therefore at the heart of meeting the promotion challenge.

What should Julia, and every leader in this kind of situation, do to make a successful transition? Reader "Guru" highlights the key priorities in his response saying, “she should… define realistic objectives, build trust with team members, clearly communicate the objectives, brainstorm, develop solid & flexible plans with a pragmatic approach, ask for feedback, define roles and authority for [her direct reports] and implement the plans made."

Beyond that, there are some basic principles for re-engineering relationships if you are promoted to lead former peers. Adhering to them would help Julia-and every leader in this situation-to make the requisite shifts:

1. Establish your authority deftly. To exert authority effectively in your new role, you have to walk a knife’s edge between under- and over-doing control. On one hand, there is the temptation to act as a sort of “super-peer”; leaders who get caught in this trap focus over-much on coaching, encouraging, and supporting their former peers, now direct reports. On the other hand, there is the risk that you will develop a Napoleon complex and begin issuing edicts. Seek to find the middle ground early on. Julia should consider putting her plans to create a new work culture on hold for a while. As Ajay Philip put it in his response, “The change in style of leadership will require being gradual and not rapid to make it successful.” Julia should use a “consult-and-decide” style for dealing key issues for the first few months, in part to establish her own authority, and in part because that’s what people are used to. She should listen carefully, consider carefully, and then make and communicate her calls. The “consult” piece of consult-and-decide shows she values thoughtful input. The “decide” piece conveys both that she is capable of decisiveness and knows that she are ultimately accountable for results. Once she has established a new rhythm with your team, she can engage in more consensus-building if and when it’s appropriate.

2. Focus on what’s good for the business. Some former peers, now direct reports, may worry that the new leader’s promotion heralds the installation of a new regime. Early on, they will be hyper-vigilant, straining to discern whether you will play favorites or seek to advance your political agendas at their expense. One antidote to this is a relentless, principled focus on doing what is right for the business. As Ramesh put it so aptly, “She must… be clear that welfare of others is the thing that matters most, and that any hidden agenda will only upset her colleagues.” Every decision Julia makes should therefore be framed in those terms -- so long as she is genuinely committed to it, and prepared to live with the consequences. The sooner her new direct reports see that she will be “hard on the issues and soft on the people,” the better. A second antidote is reliance on what Chan Kim and Renee Mauborgne have termed “fair process” for making key decisions. This means establishing and upholding work processes that are perceived as fair, perhaps by melding consult-and-decide decision-making with “put the interests of the business first” criteria for evaluating alternative courses of action.

3. Rethink what you delegate. As Peter Drucker highlighted in the early 1950’s, the ability to delegate lies at the heart of leadership. Delegation is, as Gautam notes in his response, a key challenge for Julia, “For increasing her acceptance, she [needs] to reassure people on two counts…she would … listen to all, and delegate to all.” Regardless of your level, the “how” of effective delegation remains pretty much the same: you build a team of competent people whom you trust, you establish goals and metrics through which you can measure progress, you translate them into specific responsibilities for your direct reports, and your reinforce them in some variation of a management-by-objectives (MBO) process. While the how remain the same, however, it’s easy to miss that what you delegate -- the basic units of analysis through which you engage with your direct reports -- typically shifts dramatically when you get promoted. If you are leading an organization of six people it makes sense to delegate specific tasks. At 60 people, your focus has to shift from tasks to projects and processes. At 600 people, you often need to delegate responsibility for specific functions. At 6,000 people, your direct reports may be responsible for diverse businesses, and so on. So it’s essential that Julia take a step back and figure out what she needs to delegate before turning to the how. This has big implications for what she should try to achieve at the off-site meeting.

4. Communicate, communicate, communicate. The good news about moving up is that you get a broader view of the business and more scope to shape it. The bad news is that you are further from the front lines and more likely to receive filtered information. It’s ironic, but inevitable, that your former peers will share information differently with you now that you are the boss. One recently-promoted leader spoke to the heart of this challenge saying, "People treat me differently in the way they funnel information. I see folks shield me from information that I ordinarily would have received." To avoid this, Julia should work to establish a climate of openness and a culture of “no surprises.” Making this work requires that she (1) not punish people for sharing bad news (while of course not condoning negligence or incompetence) and (2) not require them to have iron-clad answers when they bring problems to her (plans to deal with the issues yes, but specific answers no.) It also requires that she create alternative channels for figuring out what is going on at the front-lines of your organization - for example engaging in regular direct contact with customers and front-line employees and providing direct channels for raising serious legal or ethical concerns - without, of course, undermining the integrity of the chain of command. As the response from the Sport and Exercise Psychology class at CSU, Fresno, stresses, Julia “has to stick to what made her successful -- good communication skills.”

5. Re-enlist your (good) former peers. For every “winner” who gets promoted, there are likely to be one or more “losers” who wanted the job but didn’t get it. When promotion processes are managed well, the ultimate decisions come as disappointments, but not surprises. Regardless, however, newly-promoted leaders like Julia typically have to deal with the reality that some former peers may be deeply disappointed, even angry or nursing feelings of victimization. When direct reports are not “good,” that is not competent or unable to get over their disappointment and support the new leader, the key is to help them find other opportunities. When they are “good” and perhaps even essential to getting things done as in the case of Andy, the new leader has to find ways to re-enlist them. As L Subramanian put it, Julia must show “she respects what each of them has contributed to Alpha's stature today. She must make sure to recognize individual contributions elaborately.” In part, this means recognizing that disappointed former peers will experience a process akin to the Kubler-Ross stages of grieving (denial, anger, bargaining, depression, acceptance) and that it will take some time for them to work things through. It also means thinking hard about when and how to best engage with disappointed direct reports -- early or later on, directly or obliquely, empathetically or matter-of-factly. Above all it means recognizing that career prospects -- and an associated fear that they have been dead-ended -- are likely to rank on their lists of concerns. Andy’s belief that Julia is genuinely committed to helping him to develop and advance may therefore be one key driver of re-enlistment.

6. Re-think your advice and counsel network. My Right from the Start co-author Dan Ciampa (who also authored the recent Taking Advice) makes the important distinction between technical advice (How best should we design a market research study?) and political counsel (Who is likely to resist my change initiative, why, and what can I do about it?). Leaders always need a network of people who can provide advice and counsel, but the mix changes at you rise up through organizations. The more senior you are, the more likely it is that you need sophisticated and supportive political advisers in your network, both knowledgeable insiders in your organization and impartial outsiders. The implication is that the advice and counsel network that served Julia well before her promotion is unlikely to be what you need in her new role. So she may need to re-engineer her relationships with existing advisers and counselors to focus on new topics in different ways. She may also need to develop entirely new sources of advice and counsel and rely less on existing ones.

7. Recognize that relationships have to change. Finally, and perhaps most importantly, you must accept that one price of promotion is that personal relationships with former peers have to become less personal. In the process of working together and facing shared challenges, some former peers may have become friends. Now, as in the case of Julia and Amanda, you are overseeing their work. The unfortunate reality is that close personal relationships and effective supervisory relationships rarely are compatible. And it’s not just (or even often) the case that people will expect you to do them favors. It’s that you can’t afford to have your judgment about key issues clouded by personal feelings. Nor can you allow the perception to take hold that you play favorites (see the principle above about putting the interests of the business first). Julia could very well find herself sitting across the table from Amanda, needing to deliver hard-edged performance feedback, yet experiencing a desire to cushion the hurt. If she succumbs to the temptation to go easy, Julia would undermine the performance of her new organization and her own leadership. If she does what’s right for the business, she irreversibly alters the relationship and she will see it in Amanda’s eyes. There is a right answer, but that doesn’t make it easy. As a starting point, Julia should take the advice of Sport and Exercise Psychology class at CSU, Fresno and “Define what [Amanda’s] role is …[and send the message] ‘I will be fair in my evaluation of you within this organization’”

While unquestionably challenging, success in adopting these principles will help position Julia, and you if you are in this situation, for success in a leading former peers. Recognize, however, that moving into any new role is a journey and not a destination. Of course, getting off to a good start helps, but recognize too that you will have to grow into the role and that this will take some time.

Read all of Michael Watkins' Leading Edge posts.

MORE ON LEADERSHIP TRANSITIONS:
Becoming the Boss (HBR Article)
So You Want to Be CEO (HBR Article Collection)
The Leadership Transitions Collection
Right from the Start: Taking Charge in a New Leadership Role (Paperback)