Lesson #3: A Leadership Team is a Fractal

Regardless of the type of business, its sector, size, age, or profitability, the powerful impact of a leadership team on an organization is unmistakable. While their strategic decisions, analyses, planning and conscious efforts to lead obviously influence the enterprise, it’s the less intentional often inadvertent effects of the senior team’s personalities, foibles, strengths, idiosyncrasies norms and rivalries that can have even more significant consequences for the organization.

Which leads to Truth #3: ​

A leadership team is a fractal.

What’s a fractal?

In The Fractal Geometry of Nature (1982) Mandelbrot defines a fractal as “a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size copy of the whole.”

In God of Resilience (2011, an e-book available through Amazon.com) Max Ryan, a character in the book, describes a fractal as

… an image or an object that when magnified, looks like the original object – it’s called “self-similar” and repeats itself over and over to make a bigger pattern. There are lots of examples of fractals in nature, like a tree, a leaf, or a portion of the sky. If you look at the system of roots at the base of a tree, a large root splits into smaller roots, which split into smaller roots, and so on. At each splitting the size gets smaller but the root divides in roughly the same way into smaller parts. This same sort of self-similar splitting is seen in the veins and arteries in human beings. Or if you take a portion of the sky, you see nearer stars and galaxies, with more distant ones behind. If you zoom into that view, you see nearer stars and galaxies, with more distant ones, and on and on.

It is really more accurate to say that an organization is a fractal pattern, and the leadership team is the self-similar design that defines the rest of the organization. As the leadership team’s image repeats and magnifies, it creates an organization that is a larger, yet an amazingly similar representation of the team.

More specifically, if you look at the strengths and weaknesses of an executive team, it’s very similar to the strengths and weaknesses of the entire organization. Whatever the executive team of an organization focuses on, whatever it does well or does poorly, how it goes about doing what it does whatever values, drives or beliefs the dominant personalities possess, these are replicated and magnified throughout the organization and those become the strengths and weaknesses of the entire company.

Once I started writing this I found that I could go on and on and on with examples. So I opted for a more direct, more readable format. I provide some of the details associated with a few examples in the table below. I’ve tried to sketch a broad picture or both the senior team and the company at a particular point in time. Both columns are greatly simplified and obviously reduced to broad caricatures of people and companies, but I’ve tried to give enough information to support my contention, because each of these examples came to clarify the point that I find fascinating and irrefutable: the personalities, traits, characteristics capabilities, limits, and collective functioning of the leadership team directly translate into the strengths and weaknesses of the organization.

The implication should be clear. Don’t underestimate the impact of the personalities on the senior team or the influence of the group’s dynamics. How they act and interact determine the strengths and weaknesses of your company. You need a highly functioning well-integrated team at that level NOT for a cozy kumbaya feeling – but you must have it to work effectively. How do you do that? Work backwards – reverse engineer your senior team by looking at the strengths and weaknesses of the company. You’ll see the dynamics and personalities of that team in the overall fractal pattern of the company. If you don’t like what you see in the company fix your leadership team. You will not fix the organization until you fix the individuals and functioning of that group.

Why? Because of Rick’s Rules: Truth #3 says: The leadership team is a fractal

Delivery service: Senior Team Company’s SWOT
Highly tenured male pilots, with military experience, engineering backgrounds or both. Each strong-willed, assertive and confident to the point of narcissistic. More apt to tell than ask or listen. Methodical, persistent able to resolve existing problems but not likely to anticipate problems or find creative solutions. Demanding of self and others, committed, charismatic, and continue to succeed by hard work and force of will. Strengths: profits in existing services, well-engineered processes, clockwork logistics, self-sufficient operations, tremendous reputation in community. Extremely reliable service.Weaknesses: decreasing growth rate/shrinking market share (in increasingly price competitive market), not coordinated with / benefiting from rest of organization, not addressing the changing competitive environment or seeking to identify / anticipate customers’ needs, no long-term plan other than seeking better engineering solutions. Starting to have adversarial relationship with union.
International Beverage: Senior Team Company’s SWOT
Young CEO facing task of re-defining the organization with an older experienced senior team that had rarely met together. Why are we meeting together? Why do we need to coordinate? Why spend time getting to know the team? Strengths: Separate successful enterprises. Solid supply chains (entirely owned) from raw products to distributors. Overall great reputation with loyal distributors. Growth business in all economiesWeaknesses: Low (and decreasing) margins. Most revenues from established products in existing markets. Separate empires: redundancies – few shared resources. No new products, aging customers. Entrenched processes, no recent improvements.
Local Utility: Senior Team Company’s SWOT
Very nice, long-term CEO: akin to a benevolent father who demanded politeness, manners and niceness. Waiting to retire, though not wanting to. Even youngest of senior team members highly tenured with the company. Politeness over candor – disagreements avoided. Strengths: Long term successful enterprise known for decent service and rates, secure employment. Low turnover. Model of effective relations with unions.Weaknesses: Focused not on growth, investment, replacement or expansion into new areas but on repair, maintenance of existing aging infra-structure. Status quo revered: No turnover in mid to senior level management positions. Loyalty, tenure more important than ideas, change. Extremely high t/o in younger professional ranks: experts frustrated. No open talk about the absence of a succession plan, but competition for Dad’s attention (and position) through quiet maintenance of silos – which came only by controlling/directing existing collective resources towards maintenance (no problems from) “my area”.
Kids Magazine Company’s SWOT
At least two generations and multi-sibling family in the child book publishing business. (think Addams family). Unclear (matrix?) family relations, mixed family roles and company authority (e.g, aunt reporting to nephew). Exclusive, untrusting “us/them” feel, all came up through the family business with little/no outside influence or experience. Strengths:Name recognition. Years of loyal good will. Familiar product.Weaknesses: Company couldn’t decide its future. Closed to change or new ideas. Intense competition from other media and edu-tainment options. By default, survival—if achieved–would come through existing print product since no other media would be entertained. Demanded only information delivery – not facilitation at meetings. They evolved from endless strategy to structure discussions as they could not make progress on strategic issues. Then shunned outside help since structure “was a family matter”.

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