Q&A With Chuck O'Dell: Making a Difference Among Chief Executives

For many business leaders, becoming chief executive of a $4.5 billion company might be the capstone of a career. For Chuck O'Dell, it has turned out to be just a stepping stone. After serving as CEO of Sodexho Marriott Services, Inc., one of the world's largest food and facilities management companies, O'Dell decided to make a career change and become an advisor to CEOs. For the past several years, O'Dell has served both on the board of directors and as a consultant to a number of small, entrepreneurial companies. This month, he joins WJM Associates as president and chief operating officer. In addition to providing strategic leadership, he will work alongside Chairman Bill Morin and Vice Chairman John Finnerty as an advisor to senior executives.

Q. What is the most difficult thing about being a chief executive?

CEOs have very few people with whom they can discuss issues and concerns openly, even to the point of revealing their uncertainty. That's very hard to do with members of your senior management team or board. Just about everyone in an organization has an agenda, intentional or unintentional. And even if they don't, they haven't been in your position, so any discussion about what they might do is pure theory.

It's also difficult to discuss possibilities before they become realities. For example, it's hard to talk to your head of operations about an operations issue when you're just trying to wrestle with it, before you've had a chance to develop a perspective on the matter. Uncertainty threatens people.

Q. So you're saying you can't let anybody think you're indecisive or weak.

That's correct. It's very hard to have that freedom to be real in the discussion, both on the part of the people who report to the CEO and on the part of the CEO. The CEO has the challenge of trying to deal with the board and with direct reports. There's no one in the organization the CEO can confide in and feel that "This person understands what I'm up against and what I'm trying to accomplish."

Q. What was the most significant issue you faced as CEO?

From a strategic standpoint, how to raise the skill level of 100,000 people. Managing human capital is the CEO's greatest responsibility -- and also the greatest challenge.

Q. We've seen many companies go through massive layoffs these past few years. What issues will CEOs have to address when the economy rebounds?

CEOs will need to rebuild trust within their organizations, which downsizing can damage significantly. Downsizing can be appropriate at certain times, but CEOs have to realize that it does not come without a cost. Then, as the organization begins to pull out of its trough and begin a growth cycle again, it is absolutely essential that the CEO rebuild that communication link with all levels of the organization. Only with trust and open communication can the CEO determine the needs of the company and begin to rebuild the peoples' and organization's skills.

Q. What are you looking forward to most in your new position?

I want to make a difference in the professional lives of executives who run companies of major divisions or major organizations in the United States. I've been the CEO of a major company. I've spent a lot of time over the past few years advising CEOs of smaller companies in how to run their businesses, how to deal with their human resource challenges and other strategic issues. I realized that the best way to make a difference in a lot of companies and to a lot of CEOs was to join a company like WJM Associates. I think it's a good fit for us both.

The aftershocks from the corporate scandals of the past two years continue to rumble throughout the nation's boardrooms.

Last July, President Bush signed into law the Sarbanes-Oxley Act, which established more stringent levels of corporate governance for public companies. A few days later, the New York Stock Exchange issued new rules affecting the composition and practices of the boards of directors that oversee its listed companies. And earlier this month, the Conference Board's Blue Ribbon Commission on Public Trust and Private Enterprise unveiled a set of recommendations to improve corporate governance.

"In the past six months, there had been a seismic shift in what it means to serve as a corporate director," says Jon J. Masters, leader of WJM Associates' corporate governance practice and chairman of Masters Governance Consulting LLC. "The new proposals place greater emphasis on issues like director independence, accountability and performance. Boards will not only have to measure up to the new standards, but also document their progress."

One step many organizations will have to take is to conduct an annual performance evaluation. "Evaluations provide an important opportunity for board development to facilitate the board's working together as a dynamic group, at the same time fostering collegiality," says Alan A. Rudnick, who served as counsel to the Conference Board's Blue Ribbon Commission on Public Trust and Private Enterprise.

A performance evaluation is best conducted by an independent third party. It usually consists of three phases:

• An evaluation of the full board, which includes its understanding of the company's strategic and operating plans; involvement in major business policies and decisions; oversight of financial resources; and other key measures;
• An evaluation of board committees, including their structure, leadership, effectiveness, and decision-making; and
• An evaluation of each individual director, focusing on such factors as independence, integrity, knowledge, experience, participation, preparation, and teamwork.

"Regulators and investors will be looking for these evaluations," says Masters. "Prudent boards will begin to explore them sooner rather than later."

Your vice president in charge of sales has been with your company for 15 years. While you have no quarrel with his track record, you've been aware for some time that his abrasive personality is alienating your sales force and causing you to lose good people. What do you do?

One solution is to bring in an executive coach to work with the individual on improving performance. But if you do, keep in mind that the boss's involvement might well spell the difference between success and failure. "Often the boss doesn't want to confront the individual about his or her behavior. He'd much rather turn the difficult employee over to an executive coach," says Diane Russ, a member of WJM Associates' coaching faculty and a principal with The Chrysalis Group. Yet it's critical that the boss play an active role in the coaching process to achieve the desired results. Here is how the boss can help:
 

• Before the assignment starts, the boss and coach should meet to discuss the subordinate's behavior, identify desired outcomes and agree upon the boss's role in the coaching process. Some bosses might be willing to offer the subordinate periodic feedback on his performance at meetings and other events; others may prefer just to meet with the subordinate and coach midway through the process.
• After that initial meeting, the boss should also attend the first meeting with the coach and subordinate. Here the boss describes the behavior that needs to change and the desired outcomes of the coaching process.
• After the coach and subordinate have developed a plan, they should meet with the boss to review it. "Sometimes the subordinate identifies three things to fix and the boss says, 'I've got a fourth,'" says Russ. "The subordinate's plan has to align with the boss's vision.”
• During the coaching process, the boss and coach should touch base informally several times and meet at leastonce to ensure that appropriate progress is being made.

At about six months, near the end of the coaching process, the boss and coach should meet to evaluate the effort, provide the coach with feedback on her performance, and discuss any systemic issues that might have contributed to the subordinate's behavior.

"A boss who is willing to participate in the coaching process can have a positive influence on the outcome," says Russ

Every January, about 2,000 of the smartest, most accomplished leaders from the worlds of government, business and academe meet for five days, usually in Davos, Switzerland, to discuss one of the burning issues of the day. I'm talking, of course, about the World Economic Forum. It offers a platform for leaders to address the most pressing global, regional and industry issues that cannot be adequately debated in industry-specific or region-specific settings. Last year, the meeting's theme was "Reevaluating Leadership and Governance"; the year before, it was "The Digital Divide." This year, the theme was something much more significant, and much more fragile: "Building Trust."

Trust is at the core of all ethical behavior. Simply defined, trust is the belief that other people around you have your interest at heart, and do not bid you ill will.

Several weeks before the World Economic Forum took place, Time magazine paid homage to the issue of trust when it selected Cynthia Cooper of Worldcom, Colleen Rowley of the FBI and Sherron Watkins of Enron as its "Persons of the Year." These three managers put their careers at stake by reporting behavior by their superiors who betrayed their trust.

Building trust will be the number-one challenge for organizations, governments and corporations in 2003. In the corporate world, if you don't have trust that there is an ethical management concerning a person's investments, then all is lost. Unfortunately, today we find ourselves in a void. Call it what you will, investments will be hard to find if corporate leaders do not rebuild quickly the faith that leaders will play fairly and ethically in the corporate ball game.

How can trust be rebuilt? Here are five suggestions:

• Be truthful in communication. Present numbers accurately and tell shareholders, customers and employees what's really going on.
• Provide products and services that do what your advertisements and sales people say they do.
• Give honest, straightforward feedback about employees' performance. The game of politics, although not eliminated, will certainly be diminished in an effort to let people know where they stand and what they must do to perform better.
• Believe in and practice statements of corporate mission statements and values. Don't just display them on the cafeteria wall. In reality, organizations will live their values day-by-day through observable management actions that speak louder than words.
• Finally, govern yourself before you have to be governed by the law. Develop your own rules to protect the public, employees and customers before the Securities and Exchange Commission or the Internal Revenue Service has to intervene.

Follow these steps, and we won't need to have conferences about "building trust" any more.