Are You an Innie or an Outie? Counter-Factual Leadership Strategy and the American/USAIR Merger

Iffy Leadership

Ever heard of something called counter-factual history? It refers to what might have been had certain events occurred - or didn’t. As in, what would have happened if Germany had won World War 2? Or Winston Churchill had died after being hit by that car in New York in 1931?

So now we are going to talk about counter-factual leadership. As in, what would happen if you adopted a different leadership style? Or what wouldn’t happen? What leadership style would be necessary to achieve a new type of target, or how to lead in certain, new circumstances?

Sometimes leaders try out a different approach or make a decision which appears to be out of their comfort zone. The reasons could be that they are flying a kite, telegraphing a punch or throwing a feint, all good and useful leadership tactics sometimes.

But there are some occasions when a leader is doing more than this. They are actually trying out a different leadership style to see what would happen if they adopted it. It’s like a reality show, or a live simulation.

Some recent examples are:

• ·         President Obama threatens to bomb Syria, and then goes in a different direction
• ·         Fed Chairman Ben Bernanke says he will taper and then doesn’t
• ·         Iran says it will hold negotiations with the US at the UN meeting, and then doesn’t

Some people could regard these changes as flip-flops reflecting indecisiveness, negotiating tactics or even deliberate deception. But in my view, they are reflections of counter-factual leadership technique. They are attempts at a live simulation of what would happen if the leader made a certain decision or changed their leadership style in some way. One of the advantages is that you can then see and gauge the response to your new style before actually taking what is probably going to be an irreversible step.

I believe that these types of action are legitimate and often-misunderstood counter-factual leadership approaches. Often this technique is assumed on the fly or in a complex fast-moving environment where there is no clear answer on how they should approach a problem based on their current leadership style.

Usually the leaders themselves are not aware of what they are doing and its import since they are doing it unconsciously, When they do launch with their counter-factual leadership or decision style, in their own mind it’s a concept, not necessarily a reality or a definite move. Like the concept cars you see at auto shows; they might well go into production, but then again, they might not.

Are Companies Different?

In the private sector it’s often more difficult to adopt a counter-factual leadership approach. Your clients aren’t going to be too impressed if you announce a new product and then don’t launch it because you don’t like the reaction.

But in the private sector there are other ways of trying out a counter-factual approach. For example, getting transferred to a completely different area in your company, or to a position which requires a totally different leadership style to the one you naturally possess.

Here’s a thought. What if, instead of an M&A transaction being a result of the need to cut costs or add new revenues, it’s actually a counter-factual leadership initiative? That is, the real motive is not financial but behavioral, driven by the deep leadership needs of the CEO or management team? That the motive is to adopt another leadership style they think is badly needed to make their company successful? So that the transaction is being driven not by financial but behavioral needs?

Of course, I am not claiming that this is the case in most or even all M&A transactions or that it would be the only motive where it does exist. The real truth is probably far more complex; that there is a need for financial or market synergies, but also an unconscious awareness that the behaviors of the other side could be crucial to our future success. That both behavioral and financial motives are important. But one thing you have to defend if you don’t believe in the counter-factual behavioral approach is why companies still do M&A transitions when most fail?

High-Fliers are In or Out

In that tenor, let’s look at the mooted merger of American Airlines and USAIR. Doug Parker is an extroverted, entrepreneurial, sometimes showy, excellent communicator, team-oriented and growth minded. Tom Horton of American is in many ways the opposite; introverted, detailed, analytical, distant.  But both are ex-CFOs.

Stripped to its barest behavioral essentials, Horton is an innie and Parker is an outie. Is it too much to think that Doug Parker is looking for his opposite to remedy the vulnerabilities that come from his own leadership style? Even if the merger doesn’t go ahead (as the Feds want), USAIR and no doubt Doug Parker are getting some lessons in counter-factual leadership based on the Horton model which will come in handy even if the transaction doesn’t proceed.

Well let’s look at some other examples: Gerald Levin and Steve Case of AOL/Time Warner fame; innie and outie. John Reed and Sandy Weill of Citibank/Travelers fame: innie and outie too. You get the idea.

I have only taken one example of counter-factual leadership. There are many other types of opposites. But the idea is that a private sector organization can sublimate the difficulties of launching counter-factual moves which appear to be flip-flops just by launching an M&A transaction.

Who Will be the Out-and-Out Winner?

So what about American/USAIR? First, I am not saying that either Parker or Horton knows at a conscious level if they are working on a counter-factual leadership initiative. For Parker, the initiator, it’s almost certainly way below the waterline.

Let’s say the transaction does go ahead. What I have observed is that usually in these cases the outie wins. There are some deep reasons for this. Also note that this does not mean that the transaction will be successful just because the outie comes out on top. If anything it tends to make it fairly good odds to be a failure later on.

Did you notice that Sandy Weill recently ‘fessed and said that the Citibank/Travelers transaction was a big mistake and should never have been done? This from the guy – a big outie - who was the chief architect and executioner of the deal, as well as of John Reed.

And even if the American/USAIR transaction does go ahead, it doesn’t mean that the counter-factual leadership aim of actually using the opposite leadership style will be achieved. Chances are it won’t once the outie or whoever wins. That’s because it’s so hard to become fluent in a leadership style which isn’t natural to you. So if American/USAIR does go ahead, don’t expect Doug Parker to become Tom Horton, even if at an unconscious level, that’s what he might have professed to want.

When You are Born, Its Always the First Time

For every CEO there’s a first time. All too often it’s also the last. A new leader usually gets on-the-job training, usually no more. So the aim is usually to get to be an effective leader based on the person’s natural leadership style, whatever that might be. We usually assume that a leader has one good natural leadership style and if she can perfect it that is an appropriate target and that person will then succeed as a leader.

But there’s usually no presumption that a leader will have to perfect more than one style. That a good leader might need several different leadership styles – often totally different and even possibly mutually at odds - to cope with different types of environments and situations. That’s a different and much tougher situation. It’s hard enough to become a good leader with one style, let alone several.

It’s like speaking a foreign language. Maybe you can speak one well, but that’s it. To speak several very well is a different kettle of fish. Although my European friends constantly amaze me with their multilingual capabilities, we as Americans are usually not in the same planet, linguistically speaking. We usually speak one language, English, and after that we are basically tapped out.

So the issue is this: can a leader become multi-leadership-lingual? What does it take to achieve this? Where do you start? And what is the leadership model which shows you the different leadership types categorized by impact and optimal environment so that you can try out a counter-factual leadership style?

And, furthermore, what does it require from the putative leader? In particular what requirements does it impose on the mental agility of the leader? How many leadership language-styles are optimal? When does one need to switch between them and under what conditions? How can a person simulate and practice those different leadership styles, while still remaining in their job and retaining credibility with their followers and stakeholders?

I believe that the discipline of counter-factual leadership has actually been around for as long as humans have needed leaders. But only a few leaders ever achieve multi-leadership-linguality. Furthermore, counter-factual leadership approaches are often misinterpreted as something else, such as negotiating tactics rather than exploration and simulation of a new leadership style and space.

But I think we need to rediscover and formalize this discipline. Leadership problems aren’t getting any easier and if we don’t solve the problem it might doom our planet even more decisively than dysfunctional processes such as pollution or climate change. Promoting counter-factual leadership approaches is a way for the leadership literati to add their own two-penny worth to solving global problems.

BTW you can see Perth’s attempt at a multi-lingual leadership model in its Leadership Cockpit® here. Also here. There are 16 types and the cockpit shows you how to switch between them.

Maybe you start by figuring out from it whether or not you are an innie or an outie J