'Prepare 3 envelopes' - Guest Blog by Kevin Griffen

Prepare 3 envelopes..

 There’s a classic story called ‘prepare three envelopes’ which purports to provide ‘advice’ on leadership transitions. This story was first shared with me over 15 years ago by Jens Olsen, client and friend, during our days with BHP. It seems that business has not learned from this folly and the story will make you both smile and wince, but ultimately, I hope you as leaders reflect and refrain from such poor behaviour.

A new executive is hired to take over a struggling business unit. During the handover meeting, the previous executive gives the newbie three numbered, coloured envelopes with the recommendation to open them when things go poorly.

After a couple of quarters, profits don’t improve, and the new executive starts to feel significant pressure from his boss. Remembering the three envelopes, he opens the first one and reads the message, “Blame your predecessor.” He dutifully explains to his boss the previous executive had left a bigger mess than expected and it will take a bit longer to fix things – but everything is under control. Satisfied with the explanation, the boss turns her attention elsewhere.

A few quarters later the business unit is still missing its financial projections. Having learned from the previous experience, the executive consults the second envelope which contains the message “Reorganize.” The executive makes a number of ‘critically-needed changes’ and ‘doubles efforts on core strengths.’ Financial results seemingly improve.

Less than two years after taking over the business unit, the executive finds himself in another crisis. Out of ideas, the executive goes to his office, closes the door, and opens the third envelope.

The message states, “Prepare Three Envelopes.”

Whilst the story is amusing in itself, it does belie a more sinister undercurrent and offers terrible advice. The fact that the story has been circulating for at least two decades shows a level of scepticism still exists around leadership and accountability.

Here is my two cents worth on each envelope:

1. Leadership is a privilege

The price you pay for that privilege is accountability. Never trash the previous leader or the inherited strategy. You accepted the role with some degree of understanding during your due diligence and by accepting, confirmed you have the experience and attributes to create success. Rather, embrace the new role, address each challenge and opportunity with zeal, passion and a commitment that inspires.

2. Moving the deck chairs on the Titanic

Reorganising for the sake of change, or air-cover, is never the right action. At best it’s a huge distraction to employees that creates uncertainty and destabilises the environment. At worse it’s disingenuous, and an abdication of responsibility that potentially negatively impacts performance and the customer experience.

Real change is not about re-arranging the deck chairs on the Titanic but rather addressing the core issues that impact performance. Transformational change requires significant investment in people, time and energy to be successful. Don’t make that call lightly….

3. Succession planning

This is a vital yet often overlooked responsibility of leaders AND organisations. More often than not change is sudden and impactful. To address this a leader needs to plan for his or her successor the day of joining. Perhaps easier said than done, but continuity plays a huge role in success. Accordingly, identify at least three internal candidates that can be developed into your role when the time comes. This will allow your organisation to have a really robust succession plan and the benchmark to assess the best route to take, internal or external, to lead the organisation into its next phase.

Remember to ask yourself this:

“if the role were easy, why would they need someone of my ability to do it?!”