Most leadership experts argue that the best way to manage change is to create alignment. However, a research by the Harvard Business Review indicates that, for large-scale change or innovation initiatives, a healthy dose of dissent is usually just as important. Within an acceptable range of competition and tension, science shows that dissent will fire up more of an individual’s brain, stimulating more pathways and engaging more creative centers. In short, more of what makes people unique, innovative, and passionate is available for use.
When Dick Fuld took over at Lehman Brothers in 1994 as its Chairman, he inherited a contentious culture. Traders and investment bankers would not share ideas and competed for business, putting their own interests above the firm’s in nearly every instance.
In Fuld’s own words, published in Knowledge@Wharton in 2007, “The early Lehman Brothers was a great example of how not to do it. It was all about me. My job. My people. Pay me.” But by the mid-1990s, the financial services industry had shifted toward an integrated sales model, and such blatant disregard for teamwork didn’t fly any longer. Fuld made unity and collaboration priorities at the firm, nudging them along with employee incentives. By the time of its collapse, in 2008, Lehman reportedly had one of the strongest cultures of teamwork and loyalty on Wall Street. As Fortune had noted in April 2006, “Fuld has incongruously turned Lehman into one of Wall Street’s most harmonious firms.”
The effort to eliminate discord at the firm had backfired. Lehman’s board of directors and management team became too agreeable and too loyal, content to follow even when they knew better. In 2007 and 2008, numerous signals indicated that the firm was heading into a crisis, but insiders who paid attention to them were afraid to point out the elephant in the room. It turned out that ‘loyalty meant loyalty to Fuld,’ according to accounts from former employees. That loyalty led Lehman executives to an almost willful blindness. Nobody wanted to disrupt the peace.
The problem is that a peaceful, harmonious workplace can be the worst possible thing for a business, according to consultancy eePulse, which conducts in-depth surveys that measure employee engagement. Complacency, in fact, is the single greatest predictor of poor company performance. The second greatest? An environment in which employees are overwhelmed. In the first case, employees are reluctant to rock the boat. In the second, the level of employee satisfaction is low and the amount of dysfunctional fighting is high. In both situations, low energy levels and fear of political fallout curb action that might address any looming crisis. At Lehman, many alumnus said that, raising difficult questions could kill one’s career.
Many successful companies are known for their stressful work environments. Microsoft, in its early days, had one of the most contentious, high-strung, and fast-paced corporate cultures in the United States. Bill Gates and Steve Ballmer were famous for yelling at people. Food distributor Sysco, an unusually successful company built on roll-ups and acquisitions, dismisses district managers who don’t meet annual productivity targets. Market leaders Goldman Sachs and McKinsey are notoriously competitive, hard-driving places to work.
According to the report, the time is ripe to own up to the truth that the right balance of alignment and competition is what pushes individuals and groups to do their best. Alignment is important, but the purpose of alignment is not harmonious agreement. It is to sustain an organization’s ability to fight for what really matters, and to pull everyone together again once the fight is resolved.
