THE STRATEGIC LAWYER

::.law + strategy.::.law + governance.::.law + politics.::. ::.you get the jist.::

On Empire, Succession and Heenan Blaikie

Empire State Building, C.Y. Chow, Flickr, under a Creative Commons License

Empire State Building, C.Y. Chow, Flickr, under a Creative Commons License

In recent weeks, it has been difficult to avoid the cautionary tale of Heenan Blaikie, one of the biggest firms in Canada, with full, national reach, that has gone into a tailspin and is soon to be gone from the Canadian business world. There has been ink-a-plenty spilled, and many a column-inch dedicated to speculation, post-mortems and autopsies.

I have been following the coverage, as it circles around the central conundrum: was it avarice, infighting, an unsuccessful overreaching and stretching of resources, or all of the above that caused its demise? No doubt it was option (d), though I suspect that the story would vary widely, depending on who you asked, with respect to the precise concatenation of events that led to the downfall.

As for me, my closest connection to the firm is 1) a few classmates, with whom I had a nodding acquaintance, ended up there after law school and 2) a good friend of mine worked at the Vancouver office of the firm, a good ten years or so ago. Which is to say, I cannot comment on root causes, or provide an inside scoop. But what I do get from the coverage–a takeaway point that brings out an underlying tension and challenge faced, not just in law, but in politics, business, and in a wide array of institutions across the board–is the issue of succession.

The broad outline:

A strong, visionary leader with a clear idea of the direction to follow, and the confidence to implement the necessary initiatives and follow through on them (goals; strategy for implementation; deployment of tactics in support of that strategy). Often charismatic, but always persuasive, the empire builder is one who is able to sell that vision and his or her ability to bring it about, to a wide range of leading talents in a relevant field or sector, who join the company, the plan, the initiative. Such leaders, if they do well, have the acumen to take bold initiatives, but also the ability to call it when the initiative isn’t working (either reorient towards a modified goal, revise the strategy, or deploy a different set of tactics based on what was learned from a previous, unsuccessful deployment) as necessary. The most effective empire builders generally succeed by, on the one hand, having the vision, and on the other, being brilliant at selling it and inspiring loyalty. There is often a dark side as well–his or her followers will have a small (or large) kernel of fear because not buying into the vision also has consequences–but the most effective tactic for creative growth and burgeoning innovation and success is generally loyalty-inspiring vision and personality, with the element of fear as one of the more minimal ingredients in the mix.

So you have a rising company, firm, political party. You have a strong visionary at the helm, who is confident and firm (and, when necessary, ruthless) enough to ensure compliance with his or her vision of how things should be, rather than allowing that vision to become diffused because of dissent, and thereby diluting resources and losing focus. And you have the loyalty of a range of VP level executives who have often been recruited by the leader and his or her selling of the vision. Those VPs will have seen the leader’s modus operandi but will also have observed the successful track record and will therefore know that this person, this leader can pull it off. And so long as the vision and the acumen remains, everything chugs along like a steampunk meteor, rising high in the sky.

That kind of personality in a leader works extremely well. It discloses precisely the kind of strength, focus, and yes (alas) ruthlessness, that is needed to keep things moving. Problem is, the characteristics–decisiveness, focus on advancing his or her own vision, as well as the accompanying characteristics that include the belief that his or her vision is unerringly correct, that he or she has a core instinct that is exceptional, and an ability to suppress opposition–is often antithetical to the notion of grooming an equally successful successor.

Leadership is about having vision, being able to spot opportunity and take initiative. It’s about being able to calculate risks, and being willing to leverage resources to bet on some of those risks–but also being able to abandon an initiative that isn’t working early enough to realign resources while cutting one’s losses. The leader also needs to be able to persuade his or her executives, and board that his or hers is the right direction to take. Making that call and leveraging those resources can be difficult and takes nerves of steel. It also does not lend itself to diffusion, nor to rivalry, nor to the fostering of alternate points of view or directions, if the leader believes that his or her direction is the correct one to take. So though the leader might be open to different views, methods and approaches in the decision-making process, once the decision is made, independent thinking is no longer required, until the time comes for assessing the success of the initiative.

The notion of stepping back and letting someone else make those calls, take those risks and follow his or her own initiative while on the leader’s watch, is often an anathema to the leader’s fundamental personality traits, the traits that brought such success in the first place. Only space for one alpha in the pack, etc.

And yet, a successor will need all of the above skills in order to successfully take over. Yes, it’s a contradiction. And because of that, it’s rare that a company is able to foster a successor from within its ranks. Which isn’t to say that a given company won’t have immensely capable, competent and even visionary VPs who could possibly do it–indeed I have seen many who fit that bill.

It’s more that those competent, capable VPs who are doing brilliantly with their team, often don’t want that top spot because they have the acumen to see the toll it takes, while those who are often drawn to the 2nd generation leadership position (taking over the empire rather than building it) often do not have the traits that the first generation leader, who was behind the meteoric rise of the corporation, displays. If that 2gen leader comes from within the ranks, and has jockeyed for the position–rather than having it thrust upon him or her, as sometimes happens to the brilliant, competent, capable VP mentioned above–there are often loyalty issues, as well as issues with vision and clear-sightedness. We all know how opportunism and personal ambition can notoriously cloud the latter.

It’s even worse if the new leader is recruited from outside the company, however. When someone is brought in to head up a corporation, the risk is even higher that this decision is an opportunistic one, about personal ambition. Where the empire-builder leader often ends up conflating personal ambition with ambition for the company–such that the company’s rise is, justly, a signifier of the empire-builder’s personal success–the 2gen leader, whose task it is to hold the reins of power and guide the magnificent juggernaut to further success and heights–often doesn’t have that conflation of personal and corporate success.

This is the kind of challenge we see again, and again, reaching back through the centuries. Think Genghis Khan. Think BlackBerry. Think the Canadian Liberal party in recent years. Think…Heenan Blaikie? It certainly looks like that was, at least, one of the major issues. If they had been able to pull in a successor who had the same strength of vision and was able to command a comparable loyalty, with its attendant willingness, on the part of the partners to take the leap of faith in letting that individual call the shots, then who knows? The story might have ended differently. Instead, it’s a contender for being added to the list of empires that grew, and then fragmented, because no one successor could leverage the resources and loyalty of the original empire builder in holding the vast territory.

As for solutions that aren’t simply a matter of luck, and of having the right successor step up at the right place and the right time? All I can say is, I’m still working that one out.

February 15, 2014 Update:

This postmortem article, documenting another facet of the collapse, appeared in yesterday’s National Post. Its focus is on the sinister, amoral approach taken by several key individuals who were recruited to take charge of new directions in business development for the firm. Though it has shades of  many “monolithic law firm papering corrupt or morally bankrupt deals for dictators” movies you might have seen, it also speaks to that succession challenge faced by 2gen leaders who try to build their own legacy by going in new directions, and instead end up abandoning the core market, principles–and, by extension, reputation–that led to success in the first place.

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This entry was posted on February 12, 2014 by in Business, Privacy, Strategy.
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