Page 395 - leadership-experience-2008

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376 PART 4: THE LEADER AS A RELATIONSHIP BUILDER

IN THE LEAD Purcell gradually shifted more and more aspects of the business away from Mack
and to his trusted aides. Frustrated, Mack launched a campaign to have himself
named co-CEO, but the balance of power had already swung too far toward Purcell.
As terms of directors expired, Purcell was able to stack the board with new directors
who were loyal to him and would support his proposals for management changes
over those of Mack. When the dust settled at Morgan Stanley, Phillip Purcell had
65
gained complete control of the firm, with all core operations reporting directly to

him. John Mack was effectively forced out.
But by 2005, Purcell’s aggressive power moves had led to serious strife within
Morgan Stanley. As previous Morgan Stanley managers saw their responsibilities
taken away and perceived that Purcell’s favored executives were given special

privileges, they began leaving the firm in droves. A management shake-up in early
2005 led to the departure of three more high-level Morgan Stanley executives and
prompted public calls by shareholders and former executives for Purcell’s ouster.

The open antagonism combined with weak financial performance and a sagging
stock price caused the board and Purcell to reconsider. They made a joint decision
that Purcell would resign from the fi rm. John Mack was later brought back as chair-
66
man and CEO.
One problem for Philip Purcell was that he failed to build support among
shareholders, clients, and lower level employees. He was considered a remote man-
ager who interacted primarily with his top trusted executives and board members
and failed to include outsiders in his network. Some major clients said they were
never visited or even phoned by Purcell. When the tide began to turn, Purcell was

unable to deflect the open antagonism from former executives and
Action Memo
chagrined shareholders. Directors, managers, employees, and share-
holders hope Mack’s more inclusive style of leadership will resolve
As a leader, you can infl uence others by
the discord and set Morgan Stanley on a smoother course.
using rational persuasion, developing
Many top executives strive to build a cadre of loyal and sup-
allies, and expanding your expertise and
portive managers to help them achieve their goals for the organiza-
credibility. Remember that people respond
tion. For example, former New York Stock Exchange Chairman Dick
to friendliness and consideration, and they
Grasso placed his friends and allies in critical positions and pushed
typically feel obligated to return favors.
favored candidates for board posts. As another example, the U.S. gov-
ernment hand-picked the advisers and committee members who would
infl uence decisions made by the interim Iraqi government. 67
5. Ask for what you want. Another way to have influence is to make a direct
appeal by being clear about what you want and asking for it. If leaders
do not ask, they seldom receive. Political activity is effective only when
the leader’s vision, goals, and desired changes are made explicit so the
organization can respond. Leaders can use their courage to be assertive,
saying what they believe to persuade others. An explicit proposal may be
accepted simply because other people have no better alternatives. Also,
an explicit proposal for change or for a specific decision alternative will
often receive favorable treatment when other options are less well defined.
Effective political behavior requires sufficient forcefulness and risk-taking
to at least try to achieve desired outcomes. 68
6. Remember the principle of scarcity. This principle means that people
usually want more of what they can’t have. When things are less
available, they become more desirable. An interesting dissertation study
on the purchase decisions of wholesale beef buyers found that buyers
more than doubled their orders when they were told that because of
weather conditions there was likely to be a scarcity of foreign beef in